Electronic cigarette merchant accounts allow you to process payments easily and securely.
The worldwide e-cigarette and vape market is expected to reach $67.31 billion by the year 2027, according to Grand View Research, Inc. This is driven by the growing knowledge of the health risks of smoking. To counter this, those who wish to smoke are turning to less hazardous ingredients, such as ashless and smokeless tobacco.
If you are about to open up your vape and e-cigarette business, or your business is well underway, processing payments and earning revenue, it’s important that you are aware of what type industry you are in.
Why Do I Need A Vape and E-Cigarette Merchant Account?
If your business, like so many, is operating exclusively online, you will need to have the capability of processing credit and debit card payments online through your virtual terminal. However, that may sound overly simplistic. Afterall, you should be able to approach any bank, traditional merchant processor, or more popular processors like PayPal or Stripe, right?
Not so fast.
According to all the processors previously mentioned, the vape and e-cigarette industry is categorized as high risk.
Here are just a few reasons:
- Card-Not-Present Transactions: If you operate solely online, this means that you can only process your credit and debit card transactions via an online terminal, without the ability of verifying the user of the card. Since the owner of the card is not present, this dramatically increases your risk for fraud and chargebacks.
- Highly-Regulated Industry: Even though the massively growing market size signifies a potential goldrush of an opportunity, this industry is heavily regulated. The FDA has already promised to carry out “enforcement actions” if merchants do not terminate the production, distribution, and sale of all flavored “cartridge-based” e-cigarettes. This regulation has been enforced since a growing number of underage smokers are adopting these devices to begin smoking.
- Highly Political: The vape and e-cigarette industry has found itself caught in a political crossfire as President Trump approved a policy to eliminate all fruit flavored e-cigarette flavors off the market. However, he did allow menthol and other flavors such as cotton candy and gummy bear to stay on the market. This enraged the group that preferred that all flavors would be pulled off the market to derail the ever-increasing “youth e-cigarette epidemic”. Again, banks and traditional merchant account providers would rather not take a political side.
Where Can I Get A Vape and E-Cigarette Merchant Account?
As explained above, traditional banks and merchant providers will not get involved in this industry as they would be assuming too much risk. The solution is to secure a high risk merchant account with a responsible high risk merchant account provider.
Reputable high risk merchant account providers can be found if you do your due diligence in getting referrals and recommendations within the industry. Focus your efforts and research on finding those who have dealt and are well-versed in the vape and e-cigarette industry.
Depending on the provider, you will need to get some documentation in order to have ready when you fill out your application online. Some of that documentation includes a government-issued ID or a driver’s license, a voided check, a copy of your recent bank statements (going back 3 months), and a Social Security Number or EIN (Employee Identification Number).
After the provider receives all documentation, the underwriters will get to work and get back to you in a few days, notifying you of an approval.
Set Yourself Up For Success
Having a vape and e-cigarette merchant account will ensure you have uninterrupted cash flow, minimize chargebacks and fraud, and peace of mind, knowing that your customers can pay with their credit cards within a safe and secure terminal. Your high risk merchant account provider will be your greatest ally in your business.