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Waters added that the global marketplace of buyers
and sellers of bitcoin establish the value of bitcoin, not
governments or individual businesses. "While it would
be good for the currency to still be accepted by a large
player like Alibaba, these moves don't really hinder
the adoption curve on a global scale as more and more
smaller companies begin looking at it as an alternative,"
he said.
However, bitcoin's viability might come into jeopardy if
a large payment brand in the United States, like Paypal
Inc., Google Inc. or First Data Corp., rejected it, Waters
stated.
Colorado pot
legalization highlights
payments quandary
espite enactment of Colorado's recreational
marijuana use law on Jan. 1, 2014, payment
processors of pot dispensaries in Colorado,
D and one other state, are in violation of fed-
eral law, because marijuana use remains illegal under
federal law. However, since the Obama administration
is looking the other way, merchant service providers
apparently do not have to worry about the risks of fines
and prosecution.
Payment attorney Paul Rianda believes the federal
risks for ISOs that process payments in the high-risk
but lucrative vertical market of marijuana dispensaries
is negligible. "It seems like the risks for ISOs, barring
them getting sued by the federal government, would be
minimal," he said.
Rianda noted ISOs take on no more risk for pot
dispensaries than they do for other high-risk merchant
categories. Those risks can be negated by the benefits
of processing for pot clubs and related organizations.
"From the processing perspective, they are able to
charge a premium for processing for these merchants,"
Rianda said. "So they get additional compensation.
"If one of them was shut down, it wouldn't really result
in any chargebacks. People buy the stuff and they walk
away with it. They don't get on memberships. They
are not paying a monthly fee. They are not paying for
something that's not going to be delivered."
A cautionary tale
Despite the federal government's current stance
regarding cannabis sales in states where the service
has been legalized, a little skepticism is still warranted
because of what happened to Oaksterdam University.
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Waters added that the global marketplace of buyers
and sellers of bitcoin establish the value of bitcoin, not
governments or individual businesses. "While it would
be good for the currency to still be accepted by a large
player like Alibaba, these moves don't really hinder
the adoption curve on a global scale as more and more
smaller companies begin looking at it as an alternative,"
he said.
However, bitcoin's viability might come into jeopardy if
a large payment brand in the United States, like Paypal
Inc., Google Inc. or First Data Corp., rejected it, Waters
stated.
Colorado pot
legalization highlights
payments quandary
espite enactment of Colorado's recreational
marijuana use law on Jan. 1, 2014, payment
processors of pot dispensaries in Colorado,
D and one other state, are in violation of fed-
eral law, because marijuana use remains illegal under
federal law. However, since the Obama administration
is looking the other way, merchant service providers
apparently do not have to worry about the risks of fines
and prosecution.
Payment attorney Paul Rianda believes the federal
risks for ISOs that process payments in the high-risk
but lucrative vertical market of marijuana dispensaries
is negligible. "It seems like the risks for ISOs, barring
them getting sued by the federal government, would be
minimal," he said.
Rianda noted ISOs take on no more risk for pot
dispensaries than they do for other high-risk merchant
categories. Those risks can be negated by the benefits
of processing for pot clubs and related organizations.
"From the processing perspective, they are able to
charge a premium for processing for these merchants,"
Rianda said. "So they get additional compensation.
"If one of them was shut down, it wouldn't really result
in any chargebacks. People buy the stuff and they walk
away with it. They don't get on memberships. They
are not paying a monthly fee. They are not paying for
something that's not going to be delivered."
A cautionary tale
Despite the federal government's current stance
regarding cannabis sales in states where the service
has been legalized, a little skepticism is still warranted
because of what happened to Oaksterdam University.
14
14
