The Visa-Cannabis Conundrum: FINCANN Statement on Recent Visa News


In response to the December 2021 news that Visa has issued a warning against cannabis businesses utilizing cashless ATMs, Fincann CEO Nathaniel Gurien released the following statement:

The major card networks, including Visa, Mastercard, American Express, and Discover, are opposed to supporting the cannabis industry due to much of the same prejudice and misunderstanding that discourages the banking industry. As a result, I’ve seen and partnered with many often inspired attempts seeking to circumvent this resistance to cannabis credit card processing and cannabis banking.

With more banks opening up to cannabis over the past couple of years, it’s been a little easier to develop and implement partial or interim permissible and sustainable solutions, but very tricky to keep them within tightly circumscribed banking-only guardrails and avoid treading at least somewhat into payment channels controlled or influenced by the major card networks. Likewise, while compliant and transparent banking has become more accessible to many, it’s been an industry cliché for a decade that getting thrown out of one’s bank several times a year is just another cost of doing business and speedbump in the road toward bringing our industry slowly into the mainstream. Of course, the reason most lose their bank accounts is that they committed federal bank fraud and de-facto money laundering by hiding the true nature of their business from the bank and putting the bank at serious risk in the process. And the cashless ATM is one of the most prominent examples of such fraud.

The cashless ATM or Point of Banking solution clever and attractive to dispensaries that want to accept cards. However, it is a fraudulent solution that deceives one or more stakeholders in the payment process. The software pretends to be dispensing ATM cash, when in fact it is hiding direct cannabis transactions without the reporting, compliance guardrails, and transparency required by the U.S. Dept. of Treasury to permit sustainable cannabis banking under current federal prohibition. There are thousands of licensees and many more thousands of ancillary businesses that have had such fraudulent checking and/or merchant accounts, and many thousands still linger today. And there are thousands of licensed retailers today using the cashless ATM solution. It’s understandable, then, how Visa’s recent announcement warning against these transactions has sent a chill throughout the industry that could halt everyday transactions as we know them. Read the warning letter from Visa here.

Federal law enforcement has begun prosecuting this range of activity in 2021, and has already obtained convictions. There are more convictions to come in 2022. What keeps me up at night is that if one or moe eager assistant U.S. attorneys with their eye on advancement sinks their teeth into this issue, it has the catastrophic potential to derail our industry’s mainstream momentum and inflict great damage. All this might have been able to be swept under the rug if we got an end to Prohibition on the federal level this year, but with that window now best projected to remain open for another year or three, there’ll be plenty of time for Mr. Folding Chair to jump in the saddle. This latest official internal memo from Visa represents a slowly-tightening noose and specifically references severe consequences for any stakeholders within Visa’s direct or indirect control.

If your cannabis business is currently utilizing a cashless ATM system, the best thing you can do is begin the process of transitioning to a compliant system today. Our fully compliant merchant processing system, launched in March 2021, is a first-of-its-kind compliant merchant processing system. Dispensaries and delivery services are eligible for this service. Read how the Fincann cannabis merchant processing program works, and begin your application on the Fincann website. Alternatively, contact Fincann to discuss your options with myself or another Fincann representative.