Several states have legalized marijuana, but legal sellers in these states grapple with lack of access to financial services. PayQwick, a federally registered money services business and a licensed money transmitter in Washington state, tackled this prickly issue by tailoring elements of its Compliance program to align with state laws on legal marijuana relative to financial services.
According to a recent Wall Street Journal article, PayQwick has moved assertively to analyze and accommodate regulatory requirements in order to help bridge the gap between institutions’ compliance requirements and the banking needs of growers, sellers, and those in related industries. Washington’s state law I-502 provides for the legal use of recreational marijuana, and PayQwick uses this law as its foundation for related BSA/AML Compliance, its KYC/CDD program, its transaction monitoring, SARs reporting, and so on.
PayQwick chief executive Ken Berke told the Journal that his company’s AML Compliance and stringent due-diligence efforts give banks confidence that they can service legal marijuana-related businesses while maintaining compliance with state law.
Additionally, PayQwick cash cards and money transmitting provide business customers a way to avoid handling the large amounts of cash common to the sale of legal marijuana. And the cash was not just a problem for growers and sellers but also for service providers to these businesses—services like electricians, landlords, lawyers, and so on.
According to Berke, PayQwick worked its way through a vigorous Compliance-laden licensing process in Washington state, and it requires stringent due diligence for each of its own customers in the legalized-marijuana industry. For example, PayQwick does a complete onsite due-diligence visit of each potential customer, and it conducts ongoing onsite visits at least every quarter as part of its ongoing due-diligence efforts. This focus on stringent, tailored, and ongoing due diligence builds trust with other financial institutions and with the state, according to PayQwick.
PayQwick on its website features its “payment solutions for the cannabis industry” with banners targeted not only at businesses but also at recreational users. Will other MSBs and financial institutions follow suit in order to access this burgeoning market?
AML Partners provides end-to-end BSA/AML Compliance solutions to financial institutions of every kind–including tailored solutions for money services businesses. To learn more about the SURETY® Suite for AML Compliance, contact us today. We specialize in software solutions that are customizable in-house and that support fine-grained tailoring to each institution’s unique Risk-Based Approach.