Cannabis e-commerce platform Dutchie announced on Wednesday that the company has launched a new digital payment system for marijuana dispensaries, giving the retailers and their customers an option to conduct transactions without cash. The new payment system, dubbed Dutchie Pay, allows consumers to purchase their favorite cannabis products online for delivery using a closed-loop automatic clearing house (ACH) bank transfer.
“Cash creates too many safety risks and is inefficient. Our industry cannot meet its full potential without modern payment solutions available at scale,” Dutchie chief product officer and co-founder Zach Lipson said in a statement from the company. “Dutchie exists to create safe and easy access to cannabis. Dutchie Pay advances our mission by integrating a simple and secure product that makes cannabis purchases safer, easier, and more accessible for dispensaries and consumers alike.”
Pot Shops Are Awash In Cash
Federal drug and money laundering laws make it difficult for financial institutions to offer common banking services including credit and bank card transaction processing to cannabis businesses, even those operating legally under state law. As a result, many dispensaries, particularly those owned by independent entrepreneurs, are forced to operate their businesses almost entirely in cash. Awash in cash, the business environment puts dispensaries, their employees and their customers at an increased risk of serious crimes including theft, burglaries and violent robberies. In March, a rash of robberies at cannabis retailers and other businesses in the Tacoma, Washington area resulted in the killing of a dispensary employee.
Provisions of a federal bill that would allow financial institutions to provide banking services to cannabis industry, the Secure and Fair Enforcement (SAFE) Banking Act, have been passed by the U.S. House of Representatives seven times, most recently as part of a defense authorization bill last week. But the legislation has failed to gain traction in the Senate, so it has yet to become law. After the spate of violent robberies in Tacoma earlier this year, Washington Sen. Patty Murray, the third-ranking Democrat in the U.S. Senate, said that current federal policy puts people in harm’s way.
“It makes absolutely no sense that legal businesses are being forced to operate entirely in cash, and it’s dangerous — and sometimes even fatal — for employees behind the register,” Murray said in a statement to the Associated Press.
Digital Payments For Online Cannabis Orders
Dutchie Pay fully integrates with Dutchie’s e-commerce and point-of-sale products, providing businesses with a single-vendor advantage to help streamline operations. Dispensaries no longer need to rely on multiple software providers, allowing retailers to significantly reduce human error, maximize sales, serve more customers and generate more revenue. The new digital payment system is available now to Dutchie customers across the United States.
For consumers, Dutchie Pay is a one-click digital payment option for ordering cannabis products online and for delivery via a direct ACH bank transfer. Dutchie notes that consumers often expect cashless, frictionless payment options free of ATM and additional service fees. With Dutchie Pay, consumers can quickly connect their bank account and pay for their cannabis purchases directly at checkout.
Oregon-based Dutchie launched the new Dutchie Pay digital payment system in alpha and beta testing during the first two quarters of 2022. The company said that the system has provided several key benefits to its customers, including a 30% increase in average order value and a decrease in the rate of abandoned online shopping carts of 32%. Consumers saw a 15% drop in cash management costs and made a second purchase after signing up 82% of the time, suggesting the digital payment system can also help drive repeat sales.
“Our customers increasingly want to buy cannabis products without using cash and without paying ATM or other fees. Dutchie Pay has improved their overall shopping experience while resulting in higher basket sizes and customer loyalty,” said Joshua Kahn, owner of licensed cannabis retailer Takoma Wellness Center. “With Dutchie Pay, I have a one-stop, one-click solution that is fully integrated with ecommerce and point of sale that provides a seamless shopping experience for my customers, a safer work environment for my team, and accelerated growth for my business.”