Rescheduling Won’t Solve the Cannabis Payment Problem: Why Dispensaries Need Reliable Cash Access

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Customers are accustomed to paying with cards nearly everywhere they shop, yet marijuana remains illegal under federal law. As a result, dispensaries continue to face restrictions on the payment methods they can offer.

A new U.S. Government Accountability Office report found that Visa and Mastercard are not expected to change their cannabis payment policies until marijuana is federally legalized. That means rescheduling won’t give dispensaries access to the card payments customers use almost everywhere else.

The bottom line for dispensaries: Regardless of which electronic payment options you offer, a on-site ATM provides customers with reliable access to cash when they need it.

Why Rescheduling Won’t Fix Cannabis Card Payments

The report, Banking Services: Cannabis Businesses Face Access Challenges, looks at banking relationships, payment processing and what rescheduling could mean for dispensaries.

Rescheduling marijuana to Schedule III would change its classification under the federal Controlled Substances Act, but would not federally legalize cannabis. As the GAO explains, “the possession, manufacture, and distribution of cannabis remains illegal under federal law.”

That distinction matters for payments. Because marijuana remains illegal under federal law, Visa and Mastercard prohibit their credit and debit cards from being used to purchase cannabis. Because marijuana remains illegal under federal law, Visa and Mastercard prohibit their credit and debit cards from being used to purchase cannabis.

So, while rescheduling may bring important changes for the cannabis industry, it won’t eliminate the payment challenges dispensaries face.

That has led dispensaries to adopt a variety of alternative payment solutions.

If the transaction is routed through the ATM network and made to look like a cash withdrawal instead of a traditional point-of-sale payment, it is functioning as a cashless ATM − regardless of whether it is marketed as debit, integrated payments, cashless payments, point-of-sale payments or point-of-banking.

Cashless ATM transactions are typically rounded up to an ATM-like amount. For example, a $58 purchase might be processed as a $60 withdrawal, with $2 returned to the customer in cash.

Visa and Mastercard have warned that cashless ATM transactions used to facilitate cannabis purchases violate their network rules. As a result, this type of processing can be shut down with little or no warning.

For a busy dispensary, especially on a Friday or Saturday, that can quickly lead to frustrated customers, longer lines and lost sales.

Why Does a Dispensary Need a Real ATM On-Site?

Whether your dispensary accepts cash only or offers a cashless ATM POS system or another electronic payment option such as PIN debit, an on-site ATM provides customers with a reliable way to access cash. 

And because the ATM transaction is completely separate from the cannabis sale, it isn't dependent on processing the cannabis purchase through a card network.

For dispensaries, an on-site ATM provides several important benefits:

·        Payment choice: Customers can access cash on-site when they prefer to pay that way.

·        Backup when POS processing is unavailable: Customers have another way to complete their purchase.

·        Fewer lost sales: Customers don’t have to leave the dispensary to find an ATM.

·        Additional revenue: ATM withdrawals can generate surcharge revenue for the business.

Best of all, you don’t have to choose between an on-site ATM and the other payment technologies you offer.

Reliable Cash Access for D.C., Maryland & Virginia Dispensaries

As cannabis payment options continue to evolve, reliable access to cash remains an essential part of a dispensary’s payment strategy. Rescheduling may bring important changes to the industry, and new payment technologies will continue to emerge. But it won’t eliminate the payment challenges dispensaries face today.

For dispensaries in Washington, D.C., Maryland and Northern Virginia, an on-site ATM provides reliable cash access, more payment choice and a dependable backup when electronic payment options are unavailable.

PCG ATM offers flexible options based on how involved you want to be in managing your ATM.

·        Free, Full-Service ATM Placement: PCG ATM provides the ATM at no cost and handles everything − installation, cash loading, monitoring, maintenance and service.

·        Own & Operate Your ATM: Purchase an ATM and earn the surcharge revenue. You provide the cash from a separate bank account for ATM loading and handle basic first-line maintenance, such as changing receipt paper and clearing occasional jams. PCG ATM provides processing and ongoing support.

Either way, your dispensary gets a real ATM on-site with convenient, reliable cash access for your customers.

Looking for a reliable ATM for your dispensary? Contact PCG ATM to find the ATM program that works best for your business. [link to contact us form]