It’s A Deal: Networks To Defer To Banks On Pot Purchases

Hoping to steer clear of controversy stemming from the use of credit cards to make legalized marijuana purchases in Colorado, MasterCard and Visa say they will defer to merchant banks on whether to approve such purchases.

Issuers, while acknowledging that existing policies are in place to prevent illegal transactions, will allow purchases to go through their systems as long as a marijuana seller’s bank defines it as a legal transaction, The Denver Post reported on Jan. 8.

“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 (banks) are best suited to make any determination about potential illegality,” Visa said in a statement.

In 2012, Visa and MasterCard announced a ban on such approvals, citing federal law and recent law-enforcement actions.

To learn more about the issuers’ decision to defer to merchant banks on the legality of marijuana purchases, read the full story by clicking here.