Electronic Cigarette Merchant Accounts

Accepting card payments in vape and e-cigarette shops

Smoking indoors was banned in 2007 and, as a result, there was a surge in demand for electronic cigarettes (or e-cigs) that smokers have continued to use as an alternative. E-cigarettes and vapourizers have become increasingly common but there is a lack of clarity in the classification of e-cigarettes, which scares banks from opening merchant accounts for businesses selling these products. Banks perceive retailers as high risk for a number of reasons:

  • It is believed that the regulation around e-cigarettes is set to change and as a result this has caused uncertainty with merchants who are unsure of its long-term future and therefore want to steer clear.
  • Some banks perceive businesses like vape store retailers as cash cows. They are popular for a short period, and make big profits, but after the initial hype and popularity they think a lot of these vape stores may go under. So far, this is proving not to be the case, but it will take time for minds to be changed.
  • The long-term health implications of e-cigarettes are considered unclear given they are a new technology.
  • The industry has a high volume of chargebacks which can have a negative effect on securing a merchant provider

If you are looking to get a merchant account in place as an e-cigarette retailer, you’ll may to find a high-risk specialist. At Merchant Advice Service our team works here is some of they key information you need to know:

Vape Store Payment Gateways

Under normal circumstances in a brick and mortar shop, organising the account should be relatively straightforward. However, this doesn’t apply to higher-risk accounts and the process can be difficult. We work with specialist merchant account suppliers who look at both account set up and specialise in finding a favourable payment gateway to allow you to take online payments.

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Online Transactions for E-Cigarette Suppliers

Online transactions have always been regarded as higher risk than face-to-face transactions. Couple this with retailing in a high-risk industry renowned for chargebacks and it starts to look impossible. Payment gateways or acquirers will determine risk based on their past experience with a merchant sector as well as that particular merchant’s financial stability.

Historically, acquirers have been caught in fraudulent activity whereby merchants take online orders and declare themselves bankrupt after the order is placed but before the goods are sent. In situations like this the acquirer is legally obligated to refund the value of the transactions and this is a large part of the reason they are reluctant to agree account set ups from the e-cigarette industry.

Face-to-face transactions for Vape Stores

Face to face e-cigarette purchases carry less risk to an acquirer than online transactions as goods are paid for an taken away at the point of sale – as the customer is present there is no risk of chargebacks, making this simpler, but still not without challenges. It entirely depends on a variety of factors, including length of time trading and proven track record.

If you would like to know more about setting up a merchant account or payment gateway for an e-cigarette business you have come to the right place.

Get in touch today by filling in our enquiry form or calling 0800 304 7875 and we’ll be happy to discuss your options further.

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We act on requests to withdraw the information we hold on you as soon as we can.

For further information please refer to our full terms and conditions HERE.

Make a quick enquiry

Speak to us directly and get any questions you have answered. Submit your details and we’ll be in touch shortly.

Agree

Tick this box to allow Merchant Advice Service and partnering firms to contact you in relation to your enquiry and associated services. Note we do not use pre-ticked boxes or any other type of default consent. We may use the data on this form to to pass you onto an advisor who suits your specific needs. You may withdraw your consent at any given time.

We will keep record of your data and consent granted to us. Your consent will be reviewed on a five yearly basis to ensure that our relationship and the purpose of the data have not changed.

We act on requests to withdraw the information we hold on you as soon as we can.

For further information please refer to our full terms and conditions HERE.

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