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we don't sell cashless atms

Visa warns retailers against using
"Cashless ATMs"


Visa recently sent a VISA Memo to acquirers that it prohibits a scheme known as "cashless ATMs" whereby point-of-sale purchases are miscoded as ATM cash disbursements and submitted into the Visa Plus network.

Such devices, commonly deployed at cannabis dispensaries, violate the Visa Core Rules and Visa Product and Service Rules and Plus Core Rules and Plus Product and Service Rules. The transactions are miscoded as ATM cash disbursements but do not disburse cash to cardholders. Purchase amounts are rounded up to create the appearance of a cash disbursement, then submitted to Visa's Plus network, which is reserved exclusively for ATM cash disbursements.

Combing through Visa’s rules, author Kasim Carbide, a corporate and banking compliance lawyer, noted that such violations of company rules “may result in a disciplinary action against the Merchant, as well as a potential fine of $200,000 or $2,500 per day (which can be retroactively apply [sic] to and from the first day of noncompliance), and termination of the Merchant’s account.”

Acquirers will be subject to non-compliance penalties when they, or third party agents, are found in non-compliance with the Visa rules, according to the memo. While the Visa memo does not mention cannabis, the scheme is used by some cannabis retailers as a way to allow customers to use debit or credit cards to buy cannabis, according to a Marijuana Moment report.

The customer places their ATM card into a POS device, the funds are transferred to the retailer, and the customer gets the cannabis. The scheme skirts the ban on using Visa and the federal banking system to pay for cannabis, according to a MarketWatch report.

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