Booming E-cigarette Industry Brings on the Need for E-cigarette Merchant Accounts

Apr 15, 2014

E-cigarette sales are rapidly climbing. According to an article by Gabrielle Karol of Fox Business, “Wells Fargo Securities analyst Bonnie Herzog says as long as regulations don’t slow down the industry, e-cig usage could soon surpass that of conventional cigarettes.” With more and more people questioning just how bad conventional cigarettes are for you, more and more are trying out e-cigs.

In an article by Melanie Balakit, Capital News Service, a story unfolds concerning Annapolis businessman, David Purdy. He started smoking at the age of 15 and, for years, tried to kick his addiction to traditional cigarettes. Finally, at the age of 47, he tried e-cigarettes. “Within a month, I started feeling the health benefits of it,” Purdy said. “I started tasting food again much better, started breathing much better. … I could feel my body responding to not smoking anymore.” After finally conquering his smoking habit, Purdy opened his own e-cigarette store. Purdy is just one of many examples of this successful and growing industry.

The e-cigarette industry is booming, but the industry is also considered a high-risk merchant processing business. This means obtaining a merchant account can be difficult, but you will need one. It is true that traditional cigarettes have more health hazards, but e-cigarettes still bring concerns. First, there are laws that prohibit e-cigarettes from being sold to minors. Secondly, deceptive marketing practices are an issue. Third, high chargeback ratios add to the high-risk profile. And, finally, the FDA has not made a final ruling on e-cigarettes. All of these factors make it difficult to receive an e-cigarette merchant account.

Another issue facing the industry is the looming tax topic. Many are concerned that taxes will be implemented that is so out of control that only the wealthy will be able to afford e-cigarettes. In Balakit’s article, she quotes Wells Fargo Securities analyst Bonnie Kerzog’s thoughts on this, “If e-cig innovation is stifled, in our view this could dramatically slow down conversion from combustible cigs, which would ultimately result in net negative public health impact; clearly, this would be in direct opposition of the agency’s goal.”

Some are worried that there is a lack of control over e-cigarettes because the actual amount of nicotine on the labels could be inaccurate. On the other hand, e-cigarette users insist that e-cigs were the only method that allowed them to quit smoking.

As more and more “vapor lounges” appear to support the use of e-cigarettes because more and more places are banning them, most users say they understand and respect others by being cautious where they use this product. Only time will tell whether e-cigarettes are really better health-wise than traditional cigarettes.


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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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