This isn't some incidental detail - it's the entire reason why the banking and credit card industry doesn't want to interact with cannabis right now.
Guess who regulates the banking industry and has authority over interstate commerce? The federal government. This particular example has nothing to do with credit card companies making a statement against cannabis, and everything to do with them not wanting to break the law.
FYI - Banks do work with cannabis in states where it's legal. Those banks just can't be national banks - they have to be state ones that are regulated by the state. In other words, Chase/BoA/etc. can't touch it because they operate at the federal level and are highly regulated.
https://www.riskscout.com/post/the-state-of-cannabis-banking
As far as I can tell, the stuff the banks won’t touch is either legally risky (weed) or financially risky.
https://www.forbes.com/sites/afontevecchia/2012/07/16/hsbc-h...
(PayPal also cannot be used for cigarettes or porn, so they have a policy of avoiding what they see as high risk items, including items regularly handled by other card professors)
On the flip side Amazon will sell all kinds of firearm related accessories, just not the firearm itself or ammunition, presumably because they're not actually a FFL and can't handle the legal requirements.
My last employer was just as happy to bid on jobs building grow ops as they were solar farms, all while maintaining the insurance mandated drug testing policy.
The market for legal marijuana projected to be $100B by 2030. If the banks want a piece of that pie, then they will change the rules and "fix" the problem.
But credit cards are on scope of an entirely different order of magnitude compared to a local bank checking account. Visa and Mastercard are global authorities on cashflow. And this is exactly why they're accidentally becoming regulators, they transcend the US weirdly fragmented banking system.
Banks and CC companies by usual standards are staying out of things more than average. If it’s not a risk to their liberty or wallets the financial sector is happy to stand back and watch all sorts of awful things.
In my opinion it's not the role of the card issuers to make this determination or to implement unilaterally the restrictions. This is a matter of law and should be handled in court.
You can't solve that problem, but I believe you could mitigate it by making prostitution legal. Funny thing is that prostitution is legal at the federal level, it's just that all the states except Nevada have laws against it. So it's kind of the opposite of cannabis, and if the credit card companies wanted to be consistent in following federal law they would allow it.
This is vague. What are you saying? Please cite sources for whatever position you’re presenting (I’m not trying to be argumentative; truly can’t tell).
For those that has yet to learn about the Googles, then they should know that sex work is legal in the Nethelands: https://www.government.nl/topics/prostitution, yet human trafficking for prostitution is still a very real problem there: https://www.dutchnews.nl/news/2017/10/some-6000-people-a-yea...
In a very real sense, government required compliance effectively forces banks into a gatekeeper position. And while some BSA enforcers do act in their interest the same any group does ( cops, politicians, IC, doctors ) by extending their reach and influence, others are wary of expanding it beyond current regime ( which is already pretty onerous ).
It does help that banks tend to get very sensitive about some things as they do rely on deposits to survive. In one of the banks I used to work for, teller BSA training included a mention to be sensitive about customers and questions along with a story of a teller, who prodded a little beyond what the customer deemed acceptable and who then proceeded to close the account with 'none of your god damn business'.
What I am saying is that things are only the way they are, because we allow it that way. Cash is still a viable, albeit annoying choice.
And banks have been complacent until now, but the cost of complacency seems to be going up.
All that said, ABA better gets it shit together. Between high compliance burden on banks combined with low to non-existent compliance on fintech startups can quickly amount to real trouble for the banking system in US.
At first I thought you were going to give an argument for removing financial gatekeeping, which I think is an inappropriate point to apply leverage towards moral ends. But -- and this is the heart of the problem everywhere -- you end up picking and choosing between vices. This maintains the processor's position as the morality enforcer, which is the entire issue: it's just one more thing that power-driven agents can strive to influence.
Well done on missing my point entirely, possibly intentionally. I'm fine with whatever happening between consenting adults. Unfortunately, there's a link between sex work and human trafficking that cannot be ignored [1]:
> Countries with legalized prostitution are associated with higher human trafficking inflows than countries where prostitution is prohibited.
and
> Criminalization of prostitution in Sweden resulted in the shrinking of the prostitution market and the decline of human trafficking inflows.
Sex trafficking impacts people who aren't consenting (including minors).
So what are the negative externalities of cannabis consumption? Long term cannabis abuse can be a problem but pales in comparison to, say, alcohol abuse. Basically, there's no world that makes sense for alcohol to be legal and cannabis not to be.
Also, cannabis legalization has arguably hurt the illegal drug trade [2].
[1]: https://orgs.law.harvard.edu/lids/2014/06/12/does-legalized-...
[2]: https://time.com/3801889/us-legalization-marijuana-trade/
Nothing you said here illustrates that. You made yourself clear, and clearly you are for cannabis, but only theoretically for sex work between consenting adults, because you see negative effects from sex work that you think make it worth suppressing sex work between consenting adults.
Other people see externalities from cannabis use (although you argue as if you've never heard anyone mention any.) Other people see the fact that companies and banks can't support sex workers as something that causes sex work to be unmonitored and underground.
Neither of those last things are the point I'm making. The point I'm making and that the person you replied to was making is that you're having the debate. You don't have a problem in using the ability to receive payments or bank to prevent or encourage behavior, your problem is that you personally are not the regulator.
Is that how we should be deciding who gets to charge a credit card?
This is like the ring from LOTR: throw it out altogether, because there is no way to use its power responsibly.
From my understanding, based on that 2018 rule, the executives at CC processors are personally liable if they process money for sex work. Like "you are an accomplice to human trafficking" guilty.
I mean, drug trafficking is deeply tied to human trafficking, as well, and your post concerns cannabis legalization, which is one way to combat that problem.
When your parent or partner finds out you paid for an OnlyFans membership, you lie and tell them you lost your card. This happens incredibly often, and payments companies don't want to touch this.
Sex trade is different because of stigma and culture and prohibition. Stigma and culture have to change through education, activism, and time, but prohibition can be dealt with immediately. Create a robust framework of protections for sex work, protecting the rights of workers, and incorporate the industry into the existing legal system.
Getting rid of trafficking, pimps, and lack of recourse for workers and consumers negates far greater harms than any moral social corruption predicted by pearl clutchers.
The same applies to almost everything which society tries to cope with through prohibition. Black markets spawn second class dealers in vice, money and trade off book to the detriment of everyone except kingpins and corrupt agents of government and law enforcement. The vulnerable and desperate get locked into feedback loops of abuse and exploitation.
Legalizing all drugs and sex work almost completely eliminates the niches that perpetuate black markets. Forcing banks and legal jurisdictions to treat trade in vice equally to any other economic activity gives society the opportunity to treat drug abuse as a health issue. It enables sex workers to receive justice for abuse. It virtually eliminates the primary sources of income for cartels and kingpins. It forces culture to adapt, eventually allowing activists the opportunity to destigmatize responsible activities of adults in private.
We have laws that protect consumers and service providers, that give resource for violence and theft and fraud. It shouldn't matter what substance or sex act or hot dog brand was involved if a citizen is injured.
Adults have no business telling other adults what they can consume, or do in private. The business of government is behavior in public and in maintaining the rights of citizens in private.
We have ample and overwhelming evidence that prohibition always creates more harm than good, across thousands of years of history. It never works and always creates opportunities for abuse and horror. We also know that legalized vice results in more responsible use and less frequent consumption and fewer harms across the board.
It should be a no brainer. We should have responsible drug use education. We should have public sex work education.
Financial institutions crafting pseudo-moral gatekeeping policy from the whims of executives, pr departments, and Twitter outrage is a disgusting offense against society.
Every dispensary I've visited here in the northeast accepts cash and debit cards, I assume they don't accept credit due to higher processing fees and higher risk of chargebacks rather than processors being problematic (otherwise they would not accept debit since they get ran through the same system anyway).
Some dispensaries can take debit card transactions, and they have to do so through "high risk" processors... companies like Square will not work with them because of federal law.
This. And while it's obviously not the same thing at all, since cannabis is a schedule 1[0] substance, the US government could treat processing credit card transactions for cannabis companies the same as they treated HSBC[1] or worse.
As such, until cannabis is moved off of schedule 1, Congress acts to make cannabis legal at the federal level, and/or the US Department of Justice makes it clear that providing banking services to cannabis companies will not be prosecuted under money laundering laws, US banks won't jump into the pool.
[0] https://www.dea.gov/drug-information/drug-scheduling
[1] https://www.investopedia.com/stock-analysis/2013/investing-n...
This was a great boon for banks a few decades ago, as it functionally gave them a huge ATM network for free.
The debit card system understands this sort of transaction, and doesn't charge the normal x% processing fee on the cash withdrawal portion of the transaction.
In other words, retailers can create transactions that are effectively ATM withdrawals - without an ATM.
This turns it into an ATM withdrawal apparently.
If I just need $80 or so (I think the limit is $100), it's faster to go to the local Walmart and buy a candy bar or something and get back $80 cash than to go the closest ATM owned by my bank to avoid the double dipping fees.
The ATM has to be actually refilled with cash, so they charge you for it.
The only charges I encounter are from using my bank's card at another bank's ATM.
You can in the UK. Dispensaries here do accept credit cards.
(Yes, I also hate it, but I do concede that America is physically big.)
The dispensaries I've been to in LA will generally take credit cards now. They round it up to multiples of 5 and give you change in cash, and I think under-the-hood they're doing a cash advance or something?
This doesn't detract from your point; if anything, it reinforces it. Just an interesting factual point.
Those are debit cards; the transaction is a cashback (that's why they give change in cash).
There is not a single state where cannabis is legal, there are only states that have decided they won't enforce federal law.
The feds don't really enforce it either. Is there a state the feds have sanctioned over legalization? They even collect federal tax dollars on the businesses selling these "illegal" products. Unless a law is actually enforced, it's just words on paper.
But it goes beyond credit card companies too. It applies to the whole banking system.
It will soon be the case where the majority of Americans live in states where recreational cannabis is legal (it was ~1 in 3 last year but NY, NJ and others will push it over). Yet you can't use a credit card to buy cannabis pretty much anywhere AFAIK.
Worse, dispensaries have to operate on an all-cash basis because they simply can't get bank accounts.
Granted, the legality of cannabis is a grey area since states allow it but the Federal government still maintains it as illegal.
I personally don't like the financial system being gatekept for legal activity this way.
Whether or not they could is a legal question. It seems though they're happy to appease politicians and "values" voters by virtue signaling on these issues, however.
As for sex work, in particular, this one is tricky. While I fully support body autonomy and in an ideal world, sex-for-money and the like should be legal, it's not that simple in reality. Why? Because the sex industry is deeply tied to human trafficking. I have no idea how to solve that problem.