Even though 24 states, plus the District of Columbia, have legalized adult-use marijuana sales, dispensaries still have a difficult time establishing banking relationships. For example, card networks have raised concerns that cashless ATM transactions are simply disguised illegal cannabis transactions.
At the end of 2021, Visa issued a warning to banks that the cashless ATM scheme being deployed at merchant outlets may operate in violation of the Visa rules and threatened enforcement actions, as stated in an article written by Julia L. Dempewolf and Ximeng Tang.
Between the issue of cashless ATMs and major credit card networks not allowing cannabis transactions, dispensaries are constantly trying to find ways around letting customers be able to pay with virtual wallets.
Challenges with ATM Solutions
Cannabis payments solutions have been in the news recently, with increasing enforcement of several key restrictions regarding credit card usage, in particular.
“There are compliance and convenience challenges cannabis operators encounter when trying to provide ATM solutions for their customers and patients,” says Kevin Hart, Founder and CEO of Green Check. “From a compliance perspective, a financial institution needs to understand the operator’s relationship with their ATM provider, the vendor due diligence, the terms of the engagement, etc. That can be an added level of administrative lift.”
Additionally, “operators are faced with the fact that often an ATM located in a dispensary has a higher service fee than other locations, making it inconvenient for their customers,” according to Hart.
While the added administrative component doesn’t impact consumers directly, the excessive fees for ATM withdrawal certainly impacts their wallet — and there is little a cannabis operator can do to mitigate that. But now, with a new partnership underway, things may get a little easier for cannabis businesses.
Reliable Integrated ATM Solutions
Green Check (GC), a fintech provider of financial services solutions and industry insights in cannabis, recently partnered with Payment Alliance International (PAI), Powered by Brinks, to deliver better ATM solutions to the cannabis industry. This new partnership empowers PAI to reach more operators via Green Check’s network of cannabis-friendly financial institutions, according to a news release.
“Green Check’s partnership with PAI will enable broader access to a trusted, reliable ATM portfolio provider whose products provide additional value to cannabis operators including proactive ATM management empowering operators to monitor cash, forecasting, outages and more,” says Hart. “Not to mention the safety of the operations, staff and consumers that comes with working with a trusted provider such as PAI, Powered by Brinks.”
Changing a Cash-Intensive Industry
Green Check’s data shows that over 70% of transactions across the company’s network of cannabis operators are cash transactions. Hart notes that cannabis businesses have steadily made advances in being recognized equally as every other business, and this partnership will help to keep the industry moving forward.
“This is another big step forward in what still remains a cash-intensive environment,” Hart says. “Additionally, more and more providers of banking and related financial services will see this as a proof-point that they can service the industry.”
