NEW YORK, July 27 (Reuters Breakingviews) – Mastercard (MA.N) is ditching dispensaries. The $376 billion payments network wants its financial partners in transactions for cannabis to crack down on using its debit cards, Bloomberg reported on July 26. The budding industry is running out of convenient options for customers to pay for its products. But as with other dubious activities, workarounds will emerge.
By definition, payments networks such as Mastercard and Visa (V.N) are middlemen, facilitating the movement of money between parties. In the weed business, that means they take the money from the buyer’s bank account and ship it into the dispensary’s. But because weed has not been legalized by the federal government, facilitating certain transactions is a no-no.
Mastercard and Visa are no stranger to controversial industries. Both companies banned payments for user-generated content on Pornhub parent MindGeek several years ago. But Visa still allows users to pay for content generated by professional actors in the adult entertainment industry.
For weed, there could be craftier workarounds. In Washington, D.C., some cannabis shops peddle quasi-worthless knickknacks such as stickers to customers while “gifting” small amounts of pot. That in theory opens up more payments systems. Ultimately, Mastercard’s move might just inspire cannabis fans to find new, creative ways to get their fix. (By Anita Ramaswamy)
(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)
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