Citadel EFT, a credit card processing firm, announced March 4 that it is exploring ways to allow state-licensed marijuana businesses to accept electronic payments from their customers.

The Oceanside, Calif., company said that it plans to offer an alternative outside the banking world for pot merchants to process customer payments. Its system, which is not yet built, will not require the use of credit cards, debit cards or automated clearing house transfers, according to Citadel EFT.

"We are joining this market with a real solution for the burgeoning legal marijuana industry," the firm's president, Gary DeRoos, said in a news release, "with a solution that offers trusted compliance along with compliance of state laws with full transparency to the authorities."

DeRoos did not immediately return a call seeking further comment.

Because marijuana is still illegal under federal law, marijuana businesses in the 20 states that allow the drug's sale for medicinal or recreational purposes often have a hard time finding financial institutions that are willing to be their partners.

Consequently, marijuana merchants often act as cash-only businesses. This has sparked fear that the shops will be targets for robberies, as well as concern that the businesses could be used to launder money. The cash-only operations can also be an inconvenience to the shops' customers, who may need to visit an ATM to make a purchase.

Over the last several months, authorities in Washington have taken a series of steps aimed at reducing the risk of federal charges, as long as marijuana businesses prevent the drug from crossing state lines, keep the drug out of children's hands, and take other precautions.

The most recent step by federal officials involved the role of the banking industry. In mid-February, the Financial Crimes Enforcement Network, a federal agency that seeks to prevent money laundering, issued guidance designed to allay the concerns of banks about doing business with pot merchants.

So far, no banks have publicly announced plans to provide banking services to marijuana businesses. But some observers expect that a number of small banks and credit unions will eventually decide they're comfortable enough with the risks involved.

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