Page 27 - GS220902

CoverStory
In some cases the consumer receives a piece of script,
which gets presented to the dispensary at checkout; in
other iterations they simply approve an amount that ap-
pears on the device's screen.
In every case, the transaction amount is rounded up to the
nearest dollar to present the appearance of an ATM with-
drawal, which is how the transaction is described on the
customer's monthly statement. The difference between the
total purchase and the rounded-up amount is returned to
the consumer as change. Typically, there are no merchant
fees, but customers pay convenience fees comparable to
ATM fees.
Akerna, a Denver-based enterprise software company
focused on the cannabis sector, estimated that half of all
dispensaries across the country use cashless ATMs. "In an
industry where we have to work doubly hard to prove our
legitimacy, the actions around cashless ATMs by others in
this industry jeopardize the entire industry's efforts and
businesses," said Akerna CEO Jessica Billingsley.
Late in 2021, Visa warned acquirers against "miscoding"
POS purchases as ATM cash withdrawals. "Visa is aware of
a scheme where POS devices marketed as 'Cashless ATMs'
are being deployed at merchant outlets and are operating
in violation of the Visa Core Rules and Visa Product and
Service Rules and Plus Core Rules and Plus Product and
Service Rules," Visa said in a memo.
"Additionally," Visa continued, "any obfuscation of infor-
mation from transactions to further this scheme also vio-
lates these requirements. This includes misidentification
of a merchant outlet (as these are POS purchase transac-
tions) or using altered or fictitious location information."
Such misuse of cashless ATMs "will be subject to non-
compliance assessments and/or penalties," as well as "fur-
ther compliance enforcement," Visa added.
The memo doesn't detail assessments and penalties. How-
ever, Kasim Carbide, a Chicago-based lawyer, puts the
monetary cost at $2,500 a day. In a 2021 post to the Chi-
cago Bar Association blog, Carbide wrote that "processing
a credit card payment for cannabis would be not only a
violation of Network Rules, but it would be a violation of
federal law as well."
Some payment services providers that offer cashless ATMs
to dispensaries suggested the memo only applies to debit
card payments processed through Visa's Plus network.
Cashless ATM transactions processed through regional
ATM/POS networks, like Shazam and NYCE, shouldn't be
affected. Eide said his understanding is that as long as a
card contains a Mastercard or Visa logo (which is the case
for most ATM cards) dispensary purchases are prohibited
transactions.
Patti Murphy is senior editor at the Green Sheet and co-host of the
Merchant Sales Podcast. Follow her on Twitter @GS_PayMaven
Association Shows:
EPCOR
EPCOR Payments Conference – Fall 2022
Highlights: This event offers a look at the current
payments landscape, zeroing in on recent and
upcoming advancements in the payments space.
This regionally priced conference brings decision
makers and industry experts together, complete
with multiple tracks of informative sessions,
peer-to-peer networking, solution-packed exhibit
hall and more.
Attendees will have the opportunity to garner
insights from payments industry leaders and
learn about the issues that most impact their or-
ganizations. Also, Watch News You Can Use and
conference.epcor.org will provide additional in-
formation as the agenda continues to take shape.
When: Oct. 3 – 5, 2022
Where: Sheraton Overland Park Hotel
Overland Park, Kan.
Registration: www.epcor.org/iCore/Events/
Event_Display.aspx?EventKey=622OVP&Website-
Key=9d9d4328-1d45-4318-a094-58b5ea9e93d6
Ascential Inc.
Money20/20 USA
Highlights: Money20/20 offers more than a
leading view on the global financial industry. As
a premier fintech content, sales and networking
platform, it prides itself on being the go-to source
for in-depth analysis and insight.
The event endeavors to create, curate and stock-
pile the most astute and inspiring content from
luminaries across the industry and beyond. The
show aims to catalyze change through the colli-
sion of people and ideas, powering new strate-
gies and partnerships that transform mindsets.
“We don’t just observe and react,” organizers
stated. “We shape the future.”
When: Oct. 23 – 26, 2022
Where: The Venetian | The Palazzo and
Sands Expo, Las Vegas
Registration: us.money2020.com/attend
27