The payment processing giant Visa issued a warning this month against the practice of cannabis dispensaries using so-called “Cashless ATMs” to circumvent restrictions on cannabis payments. First reported by Marijuana Moment, Visa said in a December 2 memo that the company is “aware of a scheme where [point-of-sale] devices marketed as ‘Cashless ATMs’ are being deployed at merchant outlets,” in violation of Visa Rules.
“Cashless ATMs are POS devices driven by payment applications that mimic standalone ATMs. However, no cash disbursements are made to cardholders. Instead, the devices are used for purchase transactions, which are miscoded as ATM cash disbursements. Purchase amounts are often rounded up to create the appearance of a cash disbursement.” — Visa memo excerpt
Frequent dispensary shoppers may recognize the maneuver which, for customers, essentially replicates the process of paying with a debit or credit card.
While the memo fails to specifically mention state-legal cannabis companies, Visa said that “Cashless ATMs are primarily marketed to merchant types that are unable to obtain payment services — whether due to the Visa Rules … or legal or regulatory prohibitions.”
The ability to process debit and credit card payments is especially enticing for cannabis dispensaries because — due to