No Cash, No Cannabis
Cashless ATMs used for purchases at dispensaries are being shut down across the country
Cannabis dispensaries in the U.S. are being forced to return to cash after a variety of payment processors turned off ‘cashless ATMs.’
Both Visa and Mastercard have sent out letters to acquiring banks, processors and merchants regarding their stance on the use of ‘cashless ATMs.
In the December 2021 memo from Visa, the payments giant warned dispensaries and payment processors that misuse of ‘cashless ATMs’ to circumvent US banking regulations violated network rules, could lead to hefty fines and shutting down of this popular workaround that allowed cannabis retailers to accept debit cards.
Cashless ATMs are POS devices driven by payment applications that mimic standalone ATMs. However, no cash disbursements are made to cardholders, the memo explains. Instead, the devices are used to make purchases, which are miscoded as ATM transactions and are often rounded up to create the appearance of a cash withdrawal.
Cashless ATMs Being Shut Down
Last week payment processors took note and began shutting down ‘cashless ATMs’ throughout the country. According to a notice from NCR owned payment processor Columbus Data Services, if these terminals are found operating as ATMs fines of up to $50,000 per event, per device, or greater will be assessed.
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