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Toronto-based Merrco Payments Inc., which specializes in cannabis-payments processing, is partnering with buy now, pay later provider Gratify Payments Inc. to enable cannabis merchants in Canada to offer BNPL loans as a payment option. Offering the installment payments is expected to help Canadian cannabis merchants upsell customers on accessories and generate higher tickets, the company says.
“BNPL allows cannabis retailers to tap into a new revenue stream by helping consumers choose to pay in installments, thus increasing retailers’ basket sizes by way of uncovering new sales opportunities such as ancillary cannabis products which typically carry a higher sticker price,” Nuno Salgado, head of marketing and partnerships for Merrco, says by email.
The deal is also a reflection of Canadian consumers’ desire to have the same payment options from cannabis merchants as those they see at other merchants. Repayment terms and the floor limit for the BNPL purchases will be determined jointly by the merchant and Merrco, Salgado adds.
BNPL is an increasingly popular payment option in Canada. According to Gratify’s Web site, 24% of consumers that use BNPL to make a purchase buy more expensive items, and non-cannabis merchants offering the payment option see a 61% increase in consumer spending. In addition, 28% of consumers say they are more likely to choose a merchant that offers BNPL.
“We asked our retailer portfolio if this new payment method would be an attractive solution to add to their checkout options, and the vast majority answered affirmatively as they saw this as a new opportunity to offer similar consumer-financing solutions already deployed and available in other retail settings,” Salgado says.
Cannabis merchants will be able to offer Merrco’s BNPL option in-store and online. Merrco and Gratify will manage the installment plans directly with the consumer. Merrco has about 1,850 cannabis merchants in its network, which represents an approximate 55% share of that merchant segment in Canada, Salgado says. About 1,200 of Merrco’s cannabis merchants are located in the province of Ontario.
In related news, digital payments provider AeroPay, which specializes in payments processing for cannabis merchants, is partnering with HighHello, a monthly subscription club that delivers cannabis products, such as flower and edibles, each month to subscribers based on their preferences. HighHello will use Chicago-based Aeropay’s bank-to-bank transfer solution to enable payments. The service can be offered by merchants in-store and online. HighHello subscribers pay $100 per month for a membership and have the option to purchase an edibles-only subscription for $75 per month.
“With Aeropay, we’re giving our customers a safe and seamless way to check out, further enhancing the HighHello experience, which is centered around discovery, fun, and education,” HighHello co-founder and head of operations Zalman Makher says in a prepared statement.
