The SFATA Fights to Preserve E-cig Merchant Accounts

Jun 23, 2014

The Smoke Free Alternatives Trade Association (SFATA) held a spring conference this year to discuss the internal and external challenges the vapor industry faces in the years to come. Not only are e-cig merchant account holders leery about the affects that impending government regulation may have on business, they also are struggling to create a unified identity that will enable them to fight Big Tobacco.

A multitude of e-cigarette stakeholders weighed in on how they could combat legislation, the media, Big Tobacco, and misguided health officials, and win the support of the public and legislators to protect the young industry. Some e-cig merchant account holders and entrepreneurs believe that the vapor industry needs to rethink their developmental and business strategies.

Cynthia Cabrera, Executive Director of SFATA, believes that the first mistake that the vapor industry made was naming their product “electronic cigarettes” in an attempt to market to adult smokers. The term “cigarettes” has developed a negative connotation and a reputation as a health hazard, which may attribute to the public misconception that e-cigarettes are a health hazard as well.

E-cig stakeholders deny that their products are anything like the traditional tobacco based cigarettes that the vapor industry seeks to replace. The power of the e-cigarette comes from its ability to customize user experiences. Consumers can choose from a variety of flavors like mocha, strawberry, and cinnamon. E-cigs also cost less than traditional tobacco. Consumers can make a one- time purchase of an e-cig then only bare the cost of the cartridges. Cartridge life can last up to a week in many cases, and cost less than a pack of cigarettes. Not to mention that many habitual cigarette users have used e-cigs to break their tobacco addictions.

The e-cig has not only transformed the lives of consumers, it has also breathed life into a booming industry. For many small business owners and e-cig merchant account holders, the vapor revolution is the embodiment of the American dream. A few years ago, only the risk takers and the desperate dared to invest in e-cigs. Now those first entrants are enjoying massive profits, but are once again left unsettled as the government debates over how to regulate their product.

The vapor industry also faces a few internal challenges. Many in the industry focus on competing with each other, as opposed to focusing their energy on taking more customers away from Big Tobacco. Also true manufacturers with credible products and experience, must find ways to differentiate themselves from less credible hobbyists.

Despite the various panels and discussions that took place at the SFATA, the main theme of the conference is the need for the vapor industry to mature quickly, which it appears to be doing. Last year, the SFATA had only six members, today it has around 140, and they are all waiting anxiously on government regulations to see if their vapor business will thrive or be snuffed out.

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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.

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