Mastercard Orders Banks to Block Cannabis Debit Transactions

Key Takeaway

Mastercard sent cease-and-desist letters to banks and payment processors, demanding they stop allowing marijuana purchases through the Mastercard debit card network. The move forced cannabis dispensaries to scramble for alternative payment solutions as the practice of processing cannabis purchases as generic retail debit transactions had been widespread. Many dispensaries had relied on what was known as 'cashless ATM' workarounds that ran purchases through the debit network. Mastercard's enforcement followed similar earlier actions by Visa. For cannabis operators, the crackdown reinforced that banking and payment normalization depend entirely on federal policy change or SAFER Banking legislation, and forced continued reliance on cash operations.