This article explains how velocity limits work for Pay by Bank and how these fraud-prevention measures help protect your dispensary, your customers, and Dutchie.
What are velocity limits?
In Pay by Bank, velocity refers to fraud-prevention checks that evaluate the speed, frequency, and amount of transactions within defined time periods.
Velocity checks are designed to:
- Detect potentially fraudulent behavior
- Stop bad actors before financial harm occurs
- Protect customers, dispensaries, and Dutchie
These safeguards are not intended to frustrate legitimate customers. However, due to how fraud protections are structured, well-intentioned customers may occasionally trigger a velocity limit.
Note: When this happens, reassure customers that these protections exist to keep their accounts and funds secure.
Types of velocity limits
Velocity limits are evaluated across three primary categories:
- Bank account velocity limits
- Consumer velocity limits
- Location velocity limits
Each category evaluates different risk signals to provide layered fraud protection.
Bank account velocity limits
Bank account velocity limits are based on usage patterns, transaction trends, and balance data from linked Pay by Bank accounts.
If a bank account is linked to more than one Pay by Bank profile, activity across all linked users is included when evaluating limits.
What bank account limits help prevent
These limits are designed to protect customers if a bad actor gains access to online banking credentials. They may restrict:
- Unexpected spending behavior (for example, transactions significantly outside the account’s normal range)
- Large purchase amounts compared to recent balance checks
- High numbers of transactions or attempts within a defined period (ex: hourly, daily, or weekly)
Example: If a customer typically spends $45–$75 per visit and suddenly attempts a $700 purchase, the transaction may trigger a bank account spending amount velocity limit.
Bank account velocity limits also watch for rapid, repeated high-dollar transactions to help reduce potential financial losses for the customer, your store, and Dutchie.
Consumer velocity limits
Consumer velocity limits are based on the customer’s overall Pay by Bank risk profile, including:
- Length of time using Pay by Bank
- Transaction history, including returned or declined transactions
- Spending patterns and purchasing habits
- Length of time the linked bank account has been active
These limits evaluate the customer as a whole, meaning:
- Changing a bank account or email does not bypass protections
- Risk is assessed across the customer’s full Pay by Bank history
What customers may experience
Customers may encounter velocity limits due to:
- Spending above an assigned threshold
- Too many transactions or transaction attempts within a set timeframe (ex: hourly, daily, or weekly)
Consumer velocity limits cannot be manually adjusted. They automatically adapt over time based on usage. Customers with longer histories and consistent, successful payments typically experience fewer velocity-related declines.
Location velocity limits
Location velocity limits apply to a specific retail location.
These limits are initially based on:
- Expected Pay by Bank transaction volume
- Average order totals
- Sales projections provided during application
Dutchie regularly audits location limits to ensure they align with current volume and industry spending trends.
Why location velocity limits exist
Location limits:
- Help prevent losses to your store and Dutchie
- Provide an additional layer of protection for customers
- Act as a final safeguard if other fraud protections are bypassed
Velocity limit declines at checkout
Velocity-related decline messages differ between the POS (budtender view) and the customer’s mobile device due to privacy and security requirements associated with ACH payments.
What does a velocity decline look like at the POS?
Budtenders typically see the following message:
Customer has exceeded transaction limit. Please have customer contact Dutchie Support.
This messaging is intentionally broad to:
- Protect sensitive customer information
- Direct customers to Dutchie Support for secure account review
- Add friction for bad actors attempting fraudulent activity
Providing limited detail at the POS helps prevent fraudsters from learning how velocity limits are structured or triggered.
What does a velocity decline look like for the customer?
Customers receive different messaging on their mobile device because:
- Velocity details are sensitive and customer-specific
- Budtenders should not have access to private banking information
- Customers may need guidance from Dutchie Support based on the specific limit triggered
Customers can learn more by reviewing the customer-facing help center article: Why was my transaction declined or my account blocked? in our customer-facing help center.