Mastercard and Visa have a duopoly over the payment processing market and when a company like Mastercard decides people aren’t allowed to buy something, despite it being legal, it can have a major impact on society and shows just how much control the company has.
In a contentious move seen as countering the progress in marijuana legalization, Mastercard, the multinational financial corporation, has issued a directive to cease all cannabis-related transactions on its debit cards.
Despite more states legalizing marijuana for medicinal and recreational use, it remains outlawed at the federal level. This incongruity keeps many banks at arm’s length from servicing cannabis companies, Reuters reported.
Mastercard’s spokesperson made the company’s standpoint crystal clear, stating: “The federal government deems cannabis sales illegal, thus these transactions are prohibited on our systems.” The announcement was promptly followed by imperative instructions to financial institutions, payment service providers, and cannabis merchants affiliated with Mastercard to terminate all linked activities.
This comes amid ongoing discussions in Congress over the SAFE Banking Act, a piece of legislation that could considerably facilitate the cannabis industry’s access to banking services. However, Republican Senator John Cornyn expressed skepticism about the Act’s passage, labeling Majority Leader Chuck Schumer’s plans as “wishful thinking.”
Seen in a broader context, Mastercard’s contentious decision trims the wings of a burgeoning industry, raising questions about the dynamics between private corporations, legislative advancements, and the principles of democracy that value transparent dialogue and free speech.
