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Cashless ATMs: Illegal for Dispensaries. Genie Card to the Rescue.

Dec 30, 2021 | Merchants, News

Cashless ATMs have become a popular option for merchants who are unable to obtain payment services. These POS systems are used to mimic a standard, standalone ATM transaction, however, no cash disbursements are made to cardholders. Instead, the merchants round up a purchase transaction to appear like a typical cash disbursement. Over 1,000 dispensaries across the U.S currently use this method to provide their customers with a cashless payment option. Even though cannabis is legal in 15 states, the major credit card networks – Visa, MasterCard, American Express, Discover and JCB – have made it clear they will not support cannabis transactions, legal or not.

Utilizing this system for a cannabis business is playing with fire. Most dispensaries charge their customers a fee for processing the payment, a violation of the Durbin Amendment. Deceiving a bank or network into supporting card transactions for a federally illegal substance constitutes fraud and money laundering.

A recent bank fraud guilty plea from the cannabis industry pertaining to cashless ATMs have made this practice a target for law enforcement. What used to be a slap-on-the-wrist punishment is now likely to be federally prosecuted as criminal behavior.

This recent judgment and future targeted prosecutions risk the credibility of the cannabis industry, thus perpetuating the cycle of financial institutions not feeling comfortable working with the industry.

The Good News

There are legal, compliant and transparent processing options for all sectors of the cannabis industry, across all 50 states.

With Genie FastPay, customers can pay for their purchase using just their cell phone number. It’s a self-contained, closed-loop system where you get paid immediately. That means it’s safe, secure and easy to use.

There is no need for those in the cannabis industry to continue down the risky path of cashless ATMs when an easy, compliant option exists.

Protect your business and get started with the Genie Card today.