Don’t let people buy pot with debit cards, Mastercard tells banks
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Mastercard has told U.S. banks to stop allowing marijuana purchases with its debit cards, highlighting the legal and financial gray area the industry exists within even as more states legalize the drug. Wp Get the full experience. Choose your plan ArrowRight Large banks and credit card companies have generally restricted cannabis purchases because marijuana is illegal under federal law, leaving few payment options for buyers in places where it is legal. Thirty-eight states, two territories and D.C. allow medical use for some conditions, and 23 states, two territories and the D.C. have legalized recreational use.
Mastercard said in an emailed statement Thursday that “the federal government considers cannabis sales illegal, so these purchases are not allowed on our systems.”
But some buyers, and dispensaries, had found a loophole in PIN transactions with debit cards.
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“As we were made aware of this matter, we quickly investigated it,” the company said. “In accordance with our policies, we instructed the financial institutions that offer payments services to cannabis merchants and connects them to Mastercard to terminate the activity.”
Josh Glasstetter, spokesperson for the U.S. Cannabis Council, said the industry’s estimated $30 billion in revenue this year would be “overwhelmingly” generated through cash transactions, which he says put workers and communities at greater risk.
Supporters of efforts to allow cashless transactions at dispensaries say forcing the businesses to operate only with cash invites would-be thieves. “It makes absolutely no sense that legal businesses are being forced to operate entirely in cash, and it’s dangerous — and sometimes even fatal — for employees behind the register,” Sen. Patty Murray (D-Wash.) said in a statement to the Associated Press last year amid a surge in dispensary robberies in her state.
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“State-legal cannabis businesses are locked out of most banking and financial services,” Glasstetter said in a text message. “[The] announcement by Mastercard is a powerful reminder of the need for action by Congress.”
In 2019, California State Treasurer Fiona Ma told a House subcommittee looking at the SAFE Banking Act that cannabis dispensaries have dropped off duffel bags and suitcases full of cash to pay their taxes.
The act would protect banks and their employees from punishment for providing services to cannabis businesses that are legal on a state level.
“We have the power in this committee to prevent murders and armed robberies, and we must use it,” Rep. Denny Heck (D-Wash.) said at the time.
The bill is still being debated. The Senate Banking Committee held its first hearing on the bill in May.
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Glasstetter said the bill’s passage would “open up new payment methods and vital sources of financing.”
But some lawmakers have concerns. Sen. Tim Scott, (R-S.C.) said in a May hearing on the bill that authorities were concerned it could “create loopholes in our money-laundering laws, making it harder to catch criminals.”
In a survey conducted in October, the Pew Research Center found that 88 percent of Americans support the legalization of marijuana for medical use and 59 percent support legalization for recreational use. Support was lower among Republicans and people age 75 or older. Support for legalization has increased dramatically over the past two decades.
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Source: The Washington Post
