Cannabis Payments Processor Seeks $500m in Damages as It Closes Doors
Georgia-based cannabis payments processor FP Omni Technologies is seeking $500m in damages as it announces that it is winding down operations.
According to a press release published late last month, the decision to wind down operations follows a protracted legal dispute with TSYS Acquiring Solutions, a subsidiary of Global Payments Inc, over alleged breaches ‘contract, fraud, negligent misrepresentation, and breach of implied duties of good faith and fair dealing’.
The dispute stems from a comprehensive long-term agreement entered into in 2019, in which FP Omni claims that TSYS falsely represented its ownership and exclusive control over the payment gateway crucial for processing transactions.
The company contends that TSYS assured full authority to provide payment processing services without requiring consent from any other entity.
However, in 2021, both Visa and Mastercard made the decision to ban all cannabis-related transactions, revealing that they ultimately held control over the transactions.
Subsequently, on February 28, 2022, FP Omni filed a lawsuit in the Superior Court of Gwinnett County, Georgia, against TSYS.
According to its press release: “FP Omni’s wind-down arises out of its inability to continue with the payment processing services promised to FP Omni by TSYS Acquiring Solutions.”
TSYS has dismissed the lawsuit as baseless, asserting that FP Omni was well aware of the risks associated with cannabis payments. The company states that the lawsuit is an attempt to ignore the reality of the payments ecosystem.
“FP Omni not only intends to recover the full value of its lost business – the latest valuation of the company exceeded $500 million dollars – but also to pursue evidence that will shed further light on the actions of TSYS and others in shutting down a legal, competitive cannabis payment processing business.”
