British American Tobacco and Reynold’s Deal Will Change E-cig Market Forever

Nov 09, 2015

British American Tobacco Ltd (BAT) recently announced a vapor-technology sharing and licensing agreement with Reynolds American Inc., an essential step towards its expansion into Reynolds.  The companies are expected to close the deal by Dec. 31, with the proposed sharing running through the end of 2022. Over the past decade, health advocacy and anti-smoking campaigns has generated a strong cigarette alternative market. Studies project that e-cig sales will outpace the sale of combustible cigarettes soon. This has prompted big tobacco companies to invest in e-cigs and other technologies to combat plummeting sales. The deal between BAT and Reynolds is most likely the beginning of more technology and licensing deals in the tobacco industry.

Electronic cigarettes are made of plastic or glass cigarette-like tubes which hold a liquid cartridge and battery. Flavored juices made of propylene glycol are placed inside the cartridge along with a variety of other chemicals. The battery heats up the liquid and generates a vapor from the flavored juice. The juices can hold tobacco-based nicotine, synthetic nicotine, or be nicotine free. Flavors can range from cotton candy to cappuccino.

The impending agreement will give BAT access to Vuse, the leading U.S. electronic cigarette made by R.J. Reynolds Vapor Co. Reynolds is predicted to leverage BAT’s international sales force., so that BAT can be the global distributor of Vuse, which would save Reynolds the time and expense of global distribution. Securities analysts believe the agreement will speed up global e-cig innovation and distribution as a whole. Reynolds executives predict that combined vaporizers ($2 billion) and e-cig ($1.5 billion) sales will exceed $3.5 billion in 2015, and eclipse traditional cigarette sales by 2025.

BAT also plans to buy the CHIC Group of Poland, an e-liquids production company that makes e-cigarette brands Provog, Cottien, Aromativ, Volish, P1, and LiQueen. BAT’s proposed agreement sets a precedent for future collaboration and mutual licensing agreements of vapor product technologies. Collaboration could include joint research and development, and manufacturing of vapor products. Technology-sharing could transform the tobacco industry, and allow the creation of more innovative, high-quality vapor products.

As large tobacco enters the e-cig market, e-cig businesses must obtain flexible, comprehensive payment processing to compete. eMerchantBroker.com is a leading high-risk account processor that offers a wide variety of payment processing options for e-cig merchants. Our full suite of electronic payment options is unmatched and will generate profits for your e-cig merchant accounts. Start your application today.

Let us help you get a high risk merchant account today!

Get Started

Award winning.

  • 2012
  • 2013
  • 2014
  • 2015
  • 2016

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.

Live Chat