Paying for Pot With PlasticPosted January 7, 2014 in Offbeat
As of January 1st, Colorado became the first US state to decriminalize the recreational use of marijuana. Pot tokers have flocked to marijuana retailers, shelling out upwards of $70 for an eighth ounce. Many consumers are using plastic to complete their transactions, which according to the WSJ, is causing some confusion for card processors VISA and MasterCard.
The WSJ reports that the official rules of Visa and MasterCard prohibit the use of debit and credit cards for marijuana purchases, but the card companies are turning a blind eye to their own rules. Since the US federal government said it won’t challenge state laws, some people think the card companies are following the fed’s lead and allowing the purchases to continue. A snip-it from the article reads:
Visa said in a statement that it follows federal law and tries to prevent the network from being used unlawfully. But it added that “given the federal government’s position and recognizing this is an evolving legal matter with different standards applicable in different states, our local merchant acquirers are best suited to make any determination about potential illegality.”
However, banks and big processors often refuse to work with shops to accept plastic. Since these card companies are often based in other states, they must follow federal law when operating across state lines. Legal counsel to Colorado Gov. John Hickenlooper said state officials expect guidance from the Fed giving banks a “yellow light” to work with marijuana businesses, possibly in the first quarter of 2014.
Card processors such as Visa and MasterCard are in the transaction business – they get paid for every swipe. While these companies must obey county, state, and federal laws, it’s really not surprising some marijuana transactions are taking place with their cards. After all, the state estimates sales could reach $600 for the year. Visa and MasterCard already gets a slice when cards are used for gum, gas, and groceries – it’s a no brainier that they’ll also want their slice of the ganja pie.
Photo credit Coleen Danger via Flickr