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Mastercard ban on cannabis debit-card purchases rocks industry

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Mastercard’s new hardline demand that banks and payment processors immediately halt cannabis transactions involving its debit card has upended the marijuana industry and put more licensed operators at financial risk, industry insiders told MJBizDaily.

The latest development, first reported by Bloomberg, is expected to affect adult-use and medical marijuana retailers the most as well as their customers.

Those consumers will likely revert back to the days of cash-only transactions – a throwback in an era when digital wallets are used to buy everything from groceries to gas.

It’s also a stark reminder that these types of business setbacks will persist without federal cannabis reform and as long as marijuana remains illegal under U.S. law, executives told MJBizDaily.

Earlier this year, cannabis operators were forced to scramble and find a new payroll provider after receiving a memo from Paychex advising that the company would no longer process direct deposits or offer other services for marijuana-related businesses.

Mastercard issued its cease-and-desist orders earlier this week to participating banks, Bloomberg reported.

“In accordance with our policies, we instructed the financial institutions that offer payment services to cannabis merchants and connect them to Mastercard to terminate the activity,” a company spokesperson told the news agency.

It’s widely believed the vast majority of marijuana debit transactions at U.S. marijuana stores are routed either through First Federal Bank of Florida or Dart Bank in Michigan.

Executives from the two banks did not immediately respond to MJBizDaily inquiries.

As a result of the Mastercard order, cannabis businesses said consumers will likely see more ATMs at stores.

Retailers and their supply chain will also have to deal with a lot more cash, which brings its own set of challenges and risks.

Marijuana companies are particularly vulnerable to break-ins and robberies given the highly cash nature of the business.

“We are taking a situation and making it harder for cannabis businesses to facilitate legal operations,” said Dawne Morris, co-founder of California-based Proteus 420, which makes point-of-sale (POS) and inventory software for cannabis companies.

“What this means is moving into heavier cash processes again, which increases theft, and potential for more (illicit) market operators to move back into a space prior to legalization.”

Dutchie pivots

Financial service providers in the cannabis space will have to find new solutions as well.

Technology platform Dutchie, which provides POS hardware and e-commerce solutions for marijuana retailers across the country, alerted customers on Monday via email it’s rolling out a new payment processing service utilizing Bitcoin and a digital wallet to “deposit, transact and receive funds,” according to an updated user agreement sent to customers.

“This alternative solution is intended to allow you to continue processing without any disruption,” the company told its marijuana retail partners in an email notification.

Bryan Barash, Dutchie’s vice president of external affairs, said the company is helping address an unfair playing field when it comes to financial services.

“We continue to strongly advocate for change to outdated and unfair federal cannabis policies while monitoring and reacting to the latest updates that impact day-to-day operations,” he told MJBizDaily via email.

Under the new service, Dutchie’s retail customers will essentially purchase Bitcoins from Dutchie partner Mobile Currency LLC equal to the amount of the corresponding dispensary transaction.

Those Bitcoins, according to the user agreement, will then be used to purchase cannabis products, in essence replacing debit-card transaction.

Bitcoin’s volatility and virtual currency status could spook some marijuana retailers and affect sales volume, according to cannabis banking expert Tyler Beuerlein.

“It’s certainly not ideal,” said Beuerlein, chief strategic business development officer for Colorado-based Safe Harbor Financial, which provides banking and lending services for cannabis companies and ancillary businesses.

“We’ve got a multibillion-dollar industry that’s still struggling to find its payment identity.”

Calls for federal reform emboldened

Mastercard’s abrupt decision to stomp out marijuana debit-card purchases has renewed industry pleas for lawmakers on Capitol Hill to address banking and other financial needs for one of the country’s faster-growing industries, despite widespread struggles to secure capital, increase retail access and compete against thriving underground markets.

“Mastercard stepping in to thwart the use of debit cards in cannabis via a pin debit system is another painful reminder of the lack of federal recognition of legal cannabis,” said Morgan Paxhia, a co-founder and managing director of San Francisco-based cannabis hedge fund Poseidon Investment Management.

“Legal cannabis deserves to be treated like every other business in this country. And 10 years later, we have no support from the federal government and Mastercard retrenching.”

Wendy Bronfein, co-founder of vertically integrated Maryland operator Curio Wellness, said the industry needs partners for banking, tax relief and safe and secure payments.

“Ultimately, the only way financial institutions are going to be comfortable working with us is by getting the OK from the federal government,” she said.

Passage of the SAFE Banking Act – which would allow banks to serve marijuana companies without fear of a federal crackdown – would harmonize state and federal law as well as provide guidance to financial institutions on engaging the industry, according to Brady Cobb, CEO of Sunburn Cannabis, which operates several medical marijuana stores in Florida.

“Hopefully this is a wake-up call that action is needed,” he said.

Source: https://mjbizdaily.com/mastercard-ban-on-cannabis-debit-card-purchases-rocks-industry/

Business

EU Pressure Builds on Google as Regulators Face Calls for Massive Fine Over Search Practices

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A growing coalition of European industry groups is intensifying pressure on regulators to take decisive action against Google over allegations of unfair search practices that could reshape competition rules across the region’s digital economy.

Investigation Under Digital Markets Act Gains Momentum

The case is being examined by the European Commission under the European Union’s landmark Digital Markets Act (DMA), introduced to curb the dominance of major technology platforms and ensure fair competition.

Launched in March 2024, the investigation focuses on whether Google has been prioritising its own services in search results, potentially disadvantaging rival businesses that rely on online visibility to reach customers.

Industry Groups Demand Swift Action

Several prominent European organizations have jointly urged regulators to conclude the probe without further delay. They argue that prolonged investigations allow alleged anti-competitive practices to continue, putting European companies—especially startups—at a disadvantage.

Signatories include the European Publishers Council, the European Magazine Media Association, the European Tech Alliance, and EU Travel Tech.

In a joint statement, these groups warned that delays in enforcement are affecting innovation, profitability, and growth prospects for regional businesses competing in digital markets.

Google Denies Allegations

Google has rejected claims of bias, stating that its search algorithms are designed to deliver the most relevant and useful results to users. The company has also proposed adjustments to address regulatory concerns.

However, critics argue that these changes are insufficient and fail to address the core issue of market dominance.

Potential Billion-Euro Penalties

If found in violation of the DMA, Google could face significant financial penalties. Under EU rules, fines can reach a substantial percentage of a company’s global turnover, potentially amounting to billions of euros.

Regulators may also impose corrective measures requiring changes to business practices, which could have long-term implications for how digital platforms operate in Europe.

Wider Implications for Big Tech

The case highlights ongoing tensions between European regulators and major U.S. technology firms. In recent years, the EU has taken a more aggressive stance in enforcing competition laws, aiming to create a level playing field for local businesses.

A final ruling against Google could set a major precedent, influencing future enforcement actions and shaping the regulatory landscape for global tech companies operating within Europe.

As scrutiny intensifies, the outcome of the investigation is expected to play a critical role in defining the future of digital competition across the European Union.

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Amazon Faces Potential Criminal Trial in Italy Over €1.2 Billion Tax Evasion Allegations

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Milan: U.S. tech giant Amazon is facing the prospect of a major legal showdown in Italy, after prosecutors in Milan formally requested a court to move forward with criminal proceedings over alleged tax evasion totaling approximately ₹12,500 crore (€1.2 billion).

The case targets Amazon’s European division along with four senior executives, marking one of the most significant tax-related investigations involving a global e-commerce platform in Europe.

Trial Push Despite Multi-Million Euro Settlement

The move comes even after Amazon reached a financial settlement with Italian tax authorities in December, agreeing to pay around ₹5,500 crore (€527 million), including interest, to resolve part of the dispute.

Typically, such settlements lead to the closure of criminal investigations. However, Milan prosecutors have opted to proceed, signaling a tougher stance on alleged corporate tax violations.

A preliminary hearing is expected in the coming months, where a judge will decide whether to formally indict the company and its executives or dismiss the case.

Allegations of VAT Evasion Through Marketplace Sellers

At the center of the investigation are claims that Amazon’s platform enabled non-European Union sellers to avoid paying value-added tax (VAT) on goods sold to Italian consumers between 2019 and 2021.

Prosecutors allege that the company’s marketplace structure allowed thousands of foreign vendors—many reportedly based in China—to operate without fully disclosing their identities or tax obligations. This, authorities argue, led to substantial VAT losses for the Italian government.

Under Italian law, online platforms facilitating sales can be held partially liable if third-party sellers fail to comply with tax requirements, a key point in the prosecution’s case.

Italian Government Named as Affected Party

In their filing, prosecutors identified Italy’s Economy Ministry as the injured party, citing significant financial damage resulting from the alleged tax evasion.

Legal experts say the outcome of the case could have wide-ranging implications across the European Union, where VAT systems are harmonized and similar compliance rules apply to digital marketplaces.

Multiple Investigations Add to Pressure

The VAT probe is just one of several legal challenges facing Amazon in Italy. The European Public Prosecutor’s Office is reportedly examining additional tax-related issues covering more recent years.

Meanwhile, Milan authorities are pursuing separate investigations into alleged customs fraud linked to imports from China and whether Amazon maintained an undeclared “permanent establishment” in Italy—potentially exposing it to higher tax liabilities.

In a separate regulatory action, Italy’s data protection authority recently ordered an Amazon unit to stop using personal data from over 1,800 employees at a warehouse near Rome.

Amazon Denies Allegations

Amazon has consistently denied wrongdoing and indicated it will strongly contest the allegations in court if the case proceeds. The company has also warned that prolonged legal uncertainty could impact investor confidence and Italy’s appeal as a destination for international business.

Broader Impact on Europe’s Digital Economy

If the case moves to trial, it could become a landmark moment for the regulation of global e-commerce platforms in Europe. Governments across the region are increasingly scrutinizing how digital marketplaces handle tax compliance, especially in cross-border transactions.

With online retail continuing to expand, regulators are under mounting pressure to ensure that multinational platforms and third-party sellers adhere to the same tax rules as traditional businesses.

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IndiGo Crisis Exposes Risks of Monopoly: What If Telecom or E-commerce Collapses Next?

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Airports across India witnessed scenes of distress and confusion as thousands of passengers were stranded due to IndiGo’s massive flight disruptions. Families with medical emergencies, funerals, and personal crises were left helpless as the airline cancelled hundreds of flights without adequate communication or support.

Passengers described desperate situations — a mother pleading for sanitary pads for her daughter, a woman unable to transport her husband’s coffin, and others stranded while trying to reach family funerals or hospitals. “It was like a lockdown at the airport,” one passenger said, describing the panic that unfolded as IndiGo’s mismanagement crippled operations nationwide.

Root Cause: IndiGo’s Market Monopoly

The turmoil, industry experts argue, stems from IndiGo’s monopolistic control over India’s domestic aviation market. The airline operates nearly 2,100 flights daily and holds around 60% market share — meaning every second plane flying within India belongs to IndiGo.

This dominance has given the company unparalleled influence. When IndiGo falters, the entire aviation system suffers. Passengers are left with few alternatives, as other airlines lack capacity to absorb stranded travellers. The result: skyrocketing ticket prices, chaos at terminals, and total dependence on a single private operator.

Aviation pioneer Captain G.R. Gopinath, founder of Air Deccan, criticised the government’s inaction, noting that on some routes, IndiGo’s economy fares surged to ₹1 lakh. He compared the situation to a hostage crisis, writing that the airline “held the system ransom” and forced regulators to defer new safety rules meant to protect pilots and passengers.

Government Intervention and Regulatory Weakness

The crisis erupted after IndiGo failed to comply with the Flight Duty Time Limitations (FDTL) — rules introduced by the DGCA in January 2024 requiring adequate rest for pilots. Despite having nearly two years to adapt, IndiGo blamed the rule for operational disruptions, citing a shortage of pilots.

Under mounting public pressure, the government stepped in, temporarily relaxing FDTL norms and capping airfare hikes. Officials claimed the move was to protect passengers, but analysts say it exposed the state’s vulnerability to corporate monopolies. “The government had no option but to yield,” said one aviation policy expert, pointing out that ignoring safety regulations for short-term relief could have long-term consequences.

The crisis also rekindled memories of the June 2025 Air India crash near London, which claimed over 240 lives. Experts warn that compromising pilot rest and safety standards to maintain flight schedules could risk another tragedy.

If Telecom Giants Fail: A National Paralysis

The article raises a troubling question — what if a similar crisis struck the telecom sector, where Jio and Airtel together control nearly 80% of subscribers and serve over 780 million users?

If both networks failed simultaneously, the repercussions would be catastrophic. Internet shutdowns would halt UPI transactions, online banking, OTP verifications, video calls, OTT streaming, and emergency communications. Critical services such as airports, hospitals, stock exchanges, and small businesses — many of which rely on WhatsApp and digital payments — would come to a standstill.

In essence, a telecom breakdown could paralyse India’s digital economy, exposing the nation’s dependence on a duopoly.

E-commerce Monopoly: Another Fragile Ecosystem

The same risk looms over the e-commerce sector, where Amazon and Flipkart dominate nearly 80% of the market. A disruption similar to IndiGo’s could cripple daily life — halting delivery of groceries, medicines, and essential goods, freezing refunds and customer support, and leaving small sellers without platforms to trade.

Local retailers, freed from competition, might exploit shortages by inflating prices. Such a scenario underscores the perils of market centralisation in sectors critical to everyday living.

A Wake-Up Call for Regulators

The IndiGo crisis, analysts say, is a warning shot for policymakers and regulators. A single company’s operational failure exposed systemic weaknesses in India’s infrastructure and consumer protection mechanisms.

As the aviation regulator DGCA investigates and IndiGo works to restore normalcy, the broader lesson remains clear: unchecked monopoly power in any essential service — whether air travel, telecom, or e-commerce — poses a direct threat to economic stability and citizen welfare.

Without stronger competition laws, redundancy frameworks, and regulatory oversight, India risks repeating this crisis across multiple sectors — each time with millions of citizens paying the price.

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