By Geri KoeppelAugust 11, 2023
Mastercard’s decision to halt the use of its debit cards to buy cannabis is causing some dispensaries in metro Phoenix to scramble.
Marijuana is still a Schedule 1 drug at the federal level — considered an illegal substance with the likes of heroin and peyote — which has caused chaos for the industry in accepting anything but cash for payments, even in states such as Arizona where it’s legal.
Some payment processors, such as Dutchie, found a way to set up systems allowing customers to use debit cards with a personal identification number. You make a purchase with your debit card and the money goes directly to the cannabis company. Seems straightforward, right?
Well, not exactly.
As with many things concerning the cannabis industry, it’s not that simple. In late July, Mastercard put the brakes on U.S. financial institutions using its debit cards for marijuana, even when customers are buying weed in states where it’s legal. The company expressed concerns about remaining in compliance with federal banking laws, never mind that recreational weed is legal in 22 states and medical marijuana in 38.
Other forms of electronic payment, like “cashless ATMs” at dispensaries, have also been halted. Cashless ATMs allowed customers to purchase cannabis at dispensaries with their bank cards by reporting the payments as ATM withdrawals instead of purchases