Marijuana dispensaries now have the option to provide cash-free transactions, thanks to a new payment system from Dutchie. The cannabis e-commerce platform just launched Dutchie Pay, a digital payment option that lets online shoppers buy cannabis products using ACH bank transfers.
“Cash creates too many safety risks and is inefficient,” Dutchie co-founder and chief product officer, Zach Lipson, said in a press release. “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.”
With Cash Comes Crime
Federal laws regarding drugs and money laundering block most financial institutions from providing banking services to cannabis companies. Even in states where it is legal to operate a marijuana business, the ability to use credit and debit card transactions has often been blocked since the federal government still considers marijuana a Schedule I illegal drug. These regulations have caused cannabis business owners to operate almost exclusively in cash transactions.
About 90% of transactions in a cannabis dispensary use cash, according to a study from Aite Group. The cash-only business model puts dispensaries in a precarious position, as they are at an increased risk of crimes like theft and robbery. In March, there was more than one fatal shooting at dispensaries in Washington, including the death of a dispensary employee.
Safe Banking Act Still Sitting in Senate
While federal cannabis legalization doesn’t look likely to happen this year, Democrats are trying to pass the Secure and Fair Enforcement (SAFE) Banking Act, which would make it possible for banks to serve cannabis companies. The U.S. House of Representatives passed the act seven times already, but has not gained much momentum in the Senate, despite efforts from Washington Sen. Patty Murray.
“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 told the Associated Press.
With elections coming up, there is a good chance that Republicans will take back the majority control of the U.S. Senate, and possibly the House. So, if cannabis legislation is going to have a good chance of moving forward, now is the time for politicians to act.
Digital Payments Let Consumers Order Cannabis Online
Aside from the increased risk of crime, cash-only transactions also make it more complicated to run a business, as consumers can become frustrated with cash-only transactions. Dutchie Pay allows U.S. customers to connect their bank accounts for ACH transfers so they can pay directly at checkout.
Since alpha and beta testing began during the first half of 2022, Dutchie customers have already started reaping the benefits of the new digital payment system. Order values have increased by 30%, and 82% of customers made repeat purchases after signing up. Since customers don’t have to pay sign up fees or ATM fees, there are fewer obstacles in the way of making an online purchase.