Visa Cracks Down On Cannabis Payment Solutions | Cashless ATMs At Cannabis Dispenseries | B2B Vault: The Payment Technology Podcast | Episode 131

Hey, what's up everybody? It's Justin live from B2B Vault, the payment technology podcast sponsored by Nationwide Payment Systems, hosted by this guy Allen Kopelman, and we'll be providing you educational information about small business, fintech, payment processing, and the technology businesses are using in the world today. And in today's podcast, we'll be talking about, uh, ATMs and the cannabis industry and how the new regulations have basically forced them to go back to cash only. Um, no more ATMs inside of the business. No, it's not, not the ATM, the cashless ATM to where you use it You know, there's a way where you can— it's kind of sketch, but you people were getting— company dispensaries were getting it done, um, and the government said no way, Jose, it's enough of that. Uh, they pulled— Visa did that.

Yeah, Visa. Visa's threatening— well, they're not threatening, they're fining any machines that they find, um, a fine of up to $50,000 per piece of equipment.

Yeah, that's crazy.

So cashless ATMs are referred to as— also referred to as point-of-banking machines, sometimes called a script machine. And basically they were a credit card machine programmed to act like an ATM except they did not dispense cash, it just dispensed a piece of paper. And it had to do it in, you know, $5, $10, $20 increments. And some of the operators started getting more sophisticated because with an ATM you can see on the network like, oh, somebody opened the vault, somebody put money in the machine, what the bill count is. And some of the more savvy or slicker operators started upping their programming game to include that.

Nice. And Visa— not nice, but I get it.

And over the last probably 12 to 18 months, maybe a little bit longer, Visa kind of got to— started putting the kibosh on it and shutting down various companies that were doing it. And even as, you know, like, we are an ATM operator, we never ventured into that. In fact, we got a letter from the company we work with and it says they want to remind partners that no script terminals, sometimes referred to as cashless ATMs, or point of banking devices operating as ATMs are prohibited by network rules. And they go into, you know, what, what's in our agreement with them. And then they go on to say if the terminals are found operating on their platform, network fines, and all associated fees will be assessed. Visa's recently assessed fines that were $50,000 per event per device and have potential to be greater. Any assessed fees or fines are passed to the market partner, which would be us. So we don't do this, and your agreement would be, um, terminated. And if you had a sub-operator and they were doing that, you can get in trouble for them too. And they refused to be involved in the cashless ATM, uh, business because they believe that it's a deterrent to ATM operators who are operating legitimately, you know, in the United States. And they are actively working to identify any cashless ATMs, and they will take action Immediately. They sent out warnings before, but this one's pretty stern. And also it appeared in, uh, Bloomberg and Bloomberg Law.

I mean, it's dropped every— I don't— I mean, if you get any type of Google alert, I don't know. I mean, I got— I've been getting hit with this. Yeah, the past 3 days.

Yeah, the past 3 days.

I mean, what, last Friday actually, I think?

Yeah, it started and there was a big— there was outages announced on several websites and companies were saying they're working on it, but who knows what's going on with that. And also, you know, they quoted in Bloomberg that I guess either this year or in the last couple of years, over $7 billion in transactions have been processed using these cashless ATMs.

So what's your thought on it? Is this just stupid?

Well, I think that it's stupid on the part of the government, that the government should just regulate because, you know, there's other billion dollars— $7 billion.

$7 billion. Yeah, of non-taxed money, right?

And that only represented 25% of the cannabis transactions.

And I'm going to say that $7 billion is low. It's super low, right? Like, they, they have no idea, right? So they're just putting a number on it, right?

So, you know, but the largest processors of ATMs, the banks— MetaBank, Columbus Data Service, Payment clients are all turning off machines as they found— as, as they find them. You know, there's also a bunch of these like P2P payment methods where people can like sort of Zelle money to the dispensary or take money out of your bank account and put it on another app, and then that app pays the dispensary. Those are just workarounds that are waiting to get right— waiting to get canceled. Because there's other ones. There was one where it was you could buy these gift cards and then buy cannabis after you bought a gift card. That, that's been shut down a few times.

And, you know, this whole banking thing with cannabis is just so stupid and confusing, bro. Like, yesterday I was reading an article about a bank that's just now starting to take funds, you know, for cannabis, for dispensaries, for medical Marijuana dispensaries only. Yeah, I just don't understand it. Like, how can one company put their money in the bank and other ones can't?

And well, I was explaining that in another podcast. It comes down to compliance, and the banks have to want to do the compliance, and the businesses need to be compliant. Most of them—

I would say that the feds can't come in there and take their money.

Well, we don't know. They got to pass laws for taxes.

Well, we do know, right? I mean Yeah, the feds can still come in there, shut down a bank account, and take every penny, right? Yes, but it doesn't matter that it's in a—

if like FDIC insured, it doesn't matter if that's in there. Well, they could take it and say they owe taxes. But the whole thing is, is like, I follow the financial committees in the House and the Senate, and then I follow the Judicial Committee in the Senate because that's where Dick Durbin is. He butts his nose into anything to do with payments. You know, he's constantly butting his nose in. But, uh, at the same time, when you look at what they're discussing in these committees, it's pretty— I would just say it's pretty mundane, little weird stuff. Like, you know, that doesn't— I don't want to say that those items don't need to be addressed because somebody—

but you gotta make it— you have to make an example of something.

Okay, I'll give an example. So they're saying they need to, they need to figure out a way to get housing loans for the LBGT whatever community.

How does it have to do with cannabis?

No, no, I'm just saying like these are the things they're discussing in the Financial Committee. Like they're not addressing the bigger picture items like cannabis, which could, which could help the help slow down the— could help the economy, right? Yeah, right. That could help the economy and help reduce the deficit and also an increase in tax revenue and the budget, create more jobs and maybe slow down this recession. Right. Like, they're not looking at stuff like that. The other thing is last night also an article broke I think I sent it to you about this bank called Evolve Bank, and they were involved in a bunch of fintech companies providing banking as a service. Some of it was related to crypto and FTX, and the, uh, you know, and this bank is in, I don't know, hot water, some hot— it's a big hot mess. And, you know, so, but they're, you know, you don't see these financial committee, like, they're over there, you know, the financial committee in the Senate, Elizabeth Warren is screaming about Zelle, right? Okay, what's wrong with Zelle? No, no, where there's that fraud and all that, right? So that's a few million dollar problem, right? A few million dollars, right?

No, because people don't know how to read.

No, no, but I'm just—

isn't that a public education problem?

Yes, but I'm just saying, like, they're complaining about Zelle, right? And having a hearing about Zelle and how to get housing for different groups of people. Right. Instead of go tackling like the big stuff, they're tackling these little—

Oh, you mean like we're worried about people who actually already have a home, right, where they're going to live, as to oppose the millions of homeless people that are out there?

We're not dealing with— No, not that. But I'm saying what I'm saying is—

When you say they're trying to figure out where some— No, no.

How are those people going to get a home, a better home? Rate on their home loan instead of dealing with bigger problems.

Like, because they're discriminated against at the banks is what you're saying?

Well, they're claiming that. I don't know if they are or not. No, no, but I'm just saying, like, there's much bigger—

what I'm trying to say is that all these much bigger fish to fry, right?

They have all these special interest, okay, pet project things, right? And there's bigger fish to fry. Like, hey, Let's do something about crypto reform. Let's do something about these fintech companies. Let's do something about these neobanks that are running wild and people are losing millions and billions of dollars, right? And the crypto, people lost billions of dollars. They're not even discussing this stuff, this stuff that matters. That just—

to just secretly whack in all of the crypto CEOs for CEOs died and mysteriously died in the past week.

But that's, that's a little spooky.

That's—

where's, uh, that guy Sam Bankman-Fried hiding in the Bahamas?

Well, no, he's somewhere in custody.

Oh, he's— they arrested him?

I don't know if they arrested him, but I'm pretty sure he's under like surveillance. And well, he's in the Bahamas.

Yeah, but he's in the Bahamas, he's not in the U.S., but he can be extradited Yeah, they need to go get him already.

Well, maybe he's safer down there because, well, the other guy was like in Barbados, they found him dead on a beach. Like, I don't know, bro, like it's kind of— it's some very sketchy things.

That is sketchy. No, but I'm just saying, like, the Financial Committee, you know, John Rose is on there, Maxine Waters, you got Elizabeth Warren, you know, they need to start tackling the bigger picture things.

I'm, I'm— this is just funny. Me, but I think that it's the cartel. Like, the cartels, yeah, are killing these— they invested so heavily in crypto, right? And now they can't get their money back.

That's a big problem.

And so I think maybe they're killing people. That's what I think. I think the cartel—

they might be going after Sam. I'm surprised Tom Brady's not ready. He's getting sued too. I saw there's a class action lawsuit against all the celebrity influencers that were involved with FTX.

Well, yeah, because look how many— that, that commercial was on Super Bowl, right? Imagine how many people ran to their phone, downloaded the app, and purchased whatever it is because of Tom Brady.

Yeah, right.

That's what I'm saying. Out of their entire life savings, right? Although those lawsuits are coming.

No, there's one already going on that said they're suing all the influencers. It's a class action lawsuit.

They're gonna win.

Well, Tom Brady's got money to get too. He's rich. I don't know about the rest of the people on there. His wife's got money too. It's probably why they got a divorce.

His wife's had money before him, right? Yeah, she's from his parents, right?

No, no, she was rich. She was a supermodel. Oh, that's right, that's right. Yeah, she's a supermodel, so she was making— she already had money. Yeah, right. So there's all these like workarounds that have been going on with the cannabis thing, PIN, and there's people advertising like a PIN debit solution. That's not legal. Anything involving Visa, they're going to come in, they're going to start fining these cannabis dispensaries, they're going to fine the people who are running these, uh, running all these machines and everything. They're just gonna fine it. They're just going to start fining everybody. And, you know, Visa can, you know, they, they'll get, you know, they're gonna get, they're gonna do something because they gotta do something.

But so this is—

needs to do something.

You know, my thought process on this is that this is why the, the black market and the market is doing so well. Um, you know, they're talking about trying to end crime and do all this other stuff, but instead of like really fixing a simple problem, right, it's, you know, I mean, the voting has been there. Everyone wants legal cannabis. Everyone wants to either have it, uh, to be accessible recreational, right? Yeah, recreational or medical. 21 and up. I mean, at this point, I don't know what's the— like, the— I mean, besides the fact that there's hundreds of thousands of people in prison for marijuana.

Well, they didn't even address that.

They're not going to, right?

No, they're not going to.

I just don't— I don't know, man. It's just crazy. Hello everyone, we'd like to take this time to thank our sponsors Nationwide Payment Systems and NPS Printer. We'd also like to shout out the listeners and everyone that subscribed to our YouTube channel. Thank you for tuning in. If you'd like to reach Allen or myself, head over to B2BVault.info where you'll find two forms, one to contact us and another if you're interested in becoming a sponsor. If you'd like to sign up for a merchant account, click the Apply Now button located at the top of the page of B2BVault.info where you'll answer a few questions and you'll be on your way to processing payments in no time. The podcast is available on Spotify, iTunes, Pandora, and other popular streaming networks. Thanks again for listening.

No, so now that the article in Bloomberg said, and a couple of other articles, you know, dispensaries are opting to go back to cash, only cash. Now, ATMs itself, like you know, an actual ATM machine. This is a small model.

He's a wizard. He just turned it into a small—

I just turned that into a big ATM into a small one. And, uh, but you could put an actual ATM in, but there's rules. So the rules go by this— these are the rules from our bank, right?

I mean, you put an ATM inside of your physical ATM.

So the rules are the machine— the machine has to be privately owned and not the— and cannot be owned by the dispensary. And the terminal operator, who would be like my company, and the source of funds cannot be associated with the owner of the dispensary. Now they can make part of the surcharge. And terminals that are placed in dispensaries may not accept deposits, and terminals may only be placed in dispensaries in states where dispensaries are you know, permitted by government requirements. So that's pretty easy to do and easy to get done. Um, we can set up an ATM anywhere in the U.S., and we can get a lo— we get a local— we belong to a big network, right? So we have a big network of guys who work for the same ATM company that I work for. So there's guys everywhere. So we have a couple of dispensaries in Colorado, and we have a private guy out there, has his own like little private armored car business, and he put the ATMs in and he puts the money in the machine. And then at the end of the month, we send a check to the guy who owns the dispensary for the month, for the commission, nice, his commission. And then he fills up his gas tank or whatever and makes plenty of money.

I bet it makes plenty of money.

It makes money. They go through a lot of— they go through a lot of cash in the dispensary. But I think that, you know, the— I think Congress needs to address the banking reforms and the Safe Banking Act and stop tiptoeing around all this stuff. And also, you know, I— when I read like how things work in Congress, like now they're, you know, they're all concerned, oh, who won the House, who won the Senate, you know, that used to not matter. And I wanted to— and I started to do some research on it. So because I remember as a kid learning about government that to pass a law they needed a two-thirds vote, right? And then they went to this majority vote at some point where the majority—

the majority rules, right?

The majority rules. And I think that they gotta X that out, go back to the two-thirds vote, because then it doesn't matter how many Republicans and how many Democrats there are., right, for the most part, because no one's going to get a two-thirds majority, right, in the voting. And that way it forces them to work together, you know what I mean? Yeah, it forces them. And I think that, you know, whenever that was changed, that was just bad, and that needs to go back. I think two-thirds—

I think a lot of things need to change. Yeah, well, I think there's so much change that needs to happen.

Well, one thing needs to change is that, you know, Visa needs to put pressure on the government, the government to legalize cannabis payments so this can all get cleaned up. Because, you know, the Congress needs to get off their butt and address, you know, things that can help the, help the economy.

And why aren't like the business owners I, I don't know.

They do that.

I feel like I would see more. I don't see a lot of like news regarding like cannabis businesses forming, you know, this huge coalition.

They haven't said— they have two— the cannabis has two or three associations.

Well, of course they have tons. I'm— what I'm saying is, sir, right, is that you don't see them in the news. Like, they're not like protesting. They're not—

it's a small group of people. That's the problem.

But it's not a small group of people.

It is, because the— like in Florida you have, and a lot of states have it where it's seed to sale. So that means like that, like here we have TruLeaf is one of them, right? So TruLeaf has to grow the cannabis, harvest it, get it in their store, and sell it. How many? So, but that's one company.

So listen, so like in California there's probably what 500 dispensaries.

Oh yeah, there, there's more independent owners of dispensaries, but you don't see the state of California—

I'm just saying in general, right? You don't see business owners like out there. Like when there was something that needed to be changed when I was younger, yeah, you would see people outside with their signs inside, in front of the White House or whatever. Until it changed.

Yeah, in front of City Hall, right?

Wherever they were, right? Their state capital, or they would go to DC, whatever it was. And, you know, they would get it done. And then now it's just like, it, from outside looking in, it seems like we are all depending on social media to get our point across so much. That we are losing, you know, like real life. Um, to be honest with you, well, we talk about that, like this metaverse.

Yeah, is that going to be— I don't think it's good. A bunch of people are going to sit around with goggles on and not leave their house.

Yeah, no, I mean, for— I mean, I love video games, so I think it's really amazing and awesome, and the technology is super dope. But as far as like the kids walking around and all day inside of the metaverse. No, I'm not a fan of that. I, I would like for them to go outside into the universe. Uh, but yeah, man, it's just, it's crazy to think about like all the things that we have to, you know.

Well, if you have a can— you know, if you have a cannabis dispensary, you definitely will.

Yeah, beyond the fact that they don't need them anymore. That's what the people were saying. That's what the—

they laid off a lot of engineers that Facebook slash Meta.

Facebook and Meta is in trouble because it's not the NFTs and the Meta is not moving. Metaverse isn't moving as fast as they wanted it to, right?

That's what I mean. So that all engineers, they laid off. Stripe laid off like a bunch of—

like I said in this, like when I was listening to it, they said that all these major companies, they mentioned Meta, Facebook, uh, Google, uh, I mean, Alphabet. They mentioned Twitter, of course. They mentioned, you know, and also the main thing around all these layoffs and why it was such a big thing was because of all the work-at-home jobs, right? Yeah. And they're just not— they don't need them anymore, right? And so because the company, the business was, was growing at this rapid rate and then it stopped. And also, uh, and all the AI, artificial intelligence, has taken over for, for for customer service. So like, if you— you don't call anyone anymore, you just—

it's just press buttons, chatbots, go look up your— yeah, go look up your— in the knowledge base, and so on and so forth. But a lot of these— also, a lot of companies started, um, asking people to come back to the office. People didn't want to go back to the office. And, you know, a lot of—

I don't know, I think I, I was just talking about their average—

and their advertising revenues are down too. Like Facebook advertising and Instagram.

Is it?

I don't know. Yep, that's what I read. They're advertising recession. People aren't spending money on those ads like they were before. So it's a, you know, it's a little bit of a thing. And then we also talked about the Evolve Bank had the whole collapse too with all the banking as a service, and, uh, which was involved in a few crypto They were connected to a few of the crypto companies, apparently, you know. And then, and then we saw the other stuff where fintech companies are in trouble over funding PPP. And, you know, these are the things Congress needs to address. They need to address the cannabis issue, the fintech issue, the crypto issue. They need to address these larger, these larger issues instead of worrying about 'Oh, Justin got $800 from Cash App, and make sure, uh, Cash App, you send Justin a 1099-K, you know, so he pays his taxes on the $800 he got.' That what they need to be worrying about is these millions and billions of dollars that people got ripped off on.

It's a fact.

So, you know, so let's just go over, you know, we talked to— we, you know, the main point of the podcast was about this, you know, all in the news for the last 3, 4 days is this whole collapse of the cannabis cashless ATMs, otherwise referred to as script or point-of-banking machines. And that's out, and, and the cannabis dispensaries are scrambling around, go— most of them going back to taking cash. And you can put an ATM in your cannabis business It just has to be done in a compliant manner. We have a way to do that. We can help your cannabis business if you want to have an actual ATM in there, follow the rules so that it's compliant with, um, Visa's rules, the Safe Banking Act rules, and all the whatever state and federal laws, right? So that's today's podcast. We'll do our best. Hopefully we edit it a little bit— could be a little choppy cutting from choppy one to the other. But, you know, follow the podcast on LinkedIn, Twitter, Facebook, TikTok, Instagram.

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Whatever, man.

We'll get Justin a Santa beard. We'll have Santa Beard Day. So everybody, thank you. Carpe diem. Peace out. Have a great day and hope you enjoyed the podcast. As always, if you want to get in touch with us, go to the website b2bvault.info. You can hit Apply Now for a merchant account, or you can go to the contact forms, fill that out, set it, we'll contact you back, get a meeting with me and Justin, one or both. And, uh, or you can text the word book on your phone to 954-827-9818. Peace out, carpe diem, seize the day, let's do it.