E-Cigarette And Vape Merchant Account Solutions

May 20, 2022

As more people are becoming health-conscious and learning about the dangers of smoking tobacco, alternatives are being brought to the market to address this need. 

Although e-cigarettes have been in the market for a little over ten years, there is still much debate about the health risks involved. Given the possible health problems associated with vape and e-cigarette use, the FDA passed a law back in 2009 to regulate the manufacturing, distribution, and marketing of these products.

Are E-Cigarettes And Vape Products High-Risk?

Both e-cigarettes and vape products fall under the category of high-risk. Why? There are many reasons. Although e-cigarettes and vaping products do not actually contain tobacco, several state, and municipal governments have passed legislation in order to impose taxes on them. 

These products are also prohibited from being sold to minors. Many municipal and state governments prohibit the use of vaping products in selected public areas. There are also higher incidences of chargebacks, fraud, and other legal ramifications associated with this type of business. It is these, and many of the reasons mentioned above that traditional payment providers simply do not want to do business with these types of merchants. 

Why Is A High-Risk Merchant Account Necessary?

Since these products are considered high-risk, most traditional payment providers will not provide merchants with a merchant account. Since laws and regulations tend to vary and are always changing, traditional processors would simply rather not take any risk. 

Additionally, since these products are high-risk, they need to partner up with a high-risk merchant account provider so that they will have access to anti-fraud and chargeback mitigation tools. 

What is equally important about partnering up with a high-risk merchant account provider is that they are more likely to be up-to-date with all of the regulations and legislation associated with this industry. 

What To Look For In A Vape And E-Cigarette Merchant Account?

With the vape and e-cigarette industry exploding worldwide, there are more merchant account providers than ever that are ready to serve you. However, not every provider that claims to have all the solutions you need will be a good fit for your business.

Before choosing a provider, do ensure that they at least offer the following features as part of their service:

  • Fair and competitive rates and fees
  • Acceptance of multiple currencies and deposits
  • Compatible with major gateways and shopping carts
  • Integration with more than 100 shopping carts
  • Chargeback mitigation tools and guidance
  • eCheck processing
  • Fraud detection and prevention tools

How To Apply For A High-Risk Vape And E-Cigarette Merchant Account?

Although applying for a high-risk vape and e-cigarette account is pretty straightforward, you do have to furnish some important documentation in order to be approved for a merchant account.

Depending on the provider you choose, they might ask that you provide the following:

1. Proof of your financial history: A robust track record will give underwriters a better glimpse of your financial health. Having a financial history that is not riddled with debt and missed payments will better position you to get your merchant account approved. 

At the end of the day, your processor wants to ensure that, not only can you process credit and debit card payments safely and dependably, but by doing so, your business has a higher potential for growth.

2.  Be transparent about chargebacks: Honesty can really make a difference when applying for a high-risk merchant account. This is especially true in the vape and e-cigarette industry. For all “customer-initiated” chargebacks, provide a thorough explanation. Also, provide proof of processing a consistent rate of online transactions.

3.  Provide your Merchant Category Code (MCC): When applying for a merchant account, especially for the vaping industry, ensure that you indicate your merchant category code. The MCC codes identify the type of business you run, the products that you sell, and the potential risk they pose for customer-initiated chargebacks. 

4.  Abide by FDA rules and regulations: The selling of vapes and e-cigarettes is a highly regulated industry and therefore must comply with all the rules and regulations as set forth by the FDA. 

One of the rules issued back in December 2019, was that it is illegal for a retail business to sell any tobacco products (this included e-cigarettes) to any customer under the age of 21. There are also some vape shops that may have “legal responsibilities” as retailers and manufacturers of tobacco products

After all of the aforementioned has been prepped, the next step will be to go to your provider’s website and apply for a merchant account via their online application. Fill out the form to the best of your ability, entering all the required information completely and honestly.

Once complete, you will then submit your online application, along with all of the required documentation. When received, an underwriter will thoroughly review the application, ensuring that all information and current business practices are legitimate. You should hear back with a decision within a few days. 

Upon acceptance, you will receive assistance in getting your merchant account setup, as well as your payment gateway. Then you will be ready to accept and process credit, debit, and even e-check payments, if applicable.

Apply For An E-Cigarette And Vape Merchant Account Today

The vape and e-cigarette industry is growing in popularity worldwide, making this a highly lucrative industry. However, a business is only as good as its merchant account provider. Not just any provider will do. It must have expertise in the high-risk industry, especially the vape and e-cigarettes vertical.

There are many laws and regulations set by the FDA that a provider must be familiar with to help the merchant remain in compliance. Do your due diligence and find a provider that can also offer anti-fraud and chargeback mitigation resources to help your business weather the difficulties that could come. With some documentation and a completed online application, this is all you really need to acquire an e-cigarette and vape merchant account. 

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

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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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