E-Cig Merchant Account

In recent years, e-cigarette companies have looked a bit deeper into high-risk credit card processing services for their businesses. If you want to sell e-cigarettes in a brick-and-mortar smoke shop or grow your online e-cig store, one obstacle you will face is finding an e-cig merchant account solution that can accept your high-risk product transactions.

Companies like PayPal don’t allow the sale of electronic cigarettes because they consider them high-cost, high-risk products – meaning these devices cannot be sold using traditional payment methods such as Visa Debit Cards or MasterCard Credit Card Processing Solutions without risking cancellation.

If you’re looking for an e-cig merchant account with transparent pricing, nearly instant approvals, and expert support 24/7, get in touch with Bankcard. We specialize in e-cig payment processing, including credit card processing, and our team is available to answer any and all of your questions.

The use of e-cigarettes is on the rise. Yet, despite their popularity, payment processors often identify these businesses as high risk, because of:

  • Uncertain legality and safety of still fairly new products, such as CBD gummies and hemp products.
  • Research on the short- and long-term effects of e-cigs on health.
  • Lack of regulations for the budding industry in most states.
  • Additional oversight and underwriting knowledge and procedures for age-restricted products.

E-cigarette businesses need an e-cig merchant account provider that brings a few more tools to the table than standard merchant accounts. As a high-risk industry with special needs, you need an e-cig merchant account with:

  • Fraud and chargeback protection tools
  • Age verification systems
  • High-risk payment solutions
Bankcard was referred to me by my developer. From the jump, they were impressive. They were super responsive, they asked great questions and their solution was really robust. Also, working with Katherine and Hanna is a dream!
High risk merchant account
Emily Wallace
CEO

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Vape and e-cig high risk merchant accounts

About electronic cigarette merchant accounts

The e-cig industry is smoking hot. Entrepreneurs and small businesses are taking advantage of the trend, but banks don’t make it easy for these businesses to get an e-cig merchant account. Traditional financial institutions deem electronic cigarette-related industries high risk because they think these businesses defy conventional finance models. Bankcard provides a cost-effective e-cig merchant account so you can process credit card transactions with an alternative payment solution that works within your business model at a fair rate so you can thrive in this ever-changing world economy.

E-cigarette devices have come to replace tobacco cigarettes for many smokers. The e-cig industry is expected to grow to nearly $29.4 billion by the end of 2022. With the increasing popularity of different smoking options, ex-smokers who switch over to these healthier alternatives find they can live an active lifestyle again without fear of lung cancer or heart disease. This is thanks in part to their new vitality from finding healthy substitutes that still give them something sweet and satisfying on their lips after each puff no matter what flavor is chosen.

Bankcard’s services are geared at meeting the needs of high-risk industries with little to no credit and minimal funds or assets, specializing in riskier businesses such as online e-cigarette shops and tobacco retail outlets that sell cigars and other smoking accessories like pipes, and offer merchants a customized payment processing solution.

Some of the features of your e-cig merchant account may include:

  • Multi-bank processing (including offshore)
  • No reserve
  • Fast settlements to merchants
  • Secure payment gateway
  • Chargeback alerts
  • Chargeback disputes
  • ACH/Check 21 processing
  • Fraud prevention and protection
  • Competitive processing rates (below industry standards)
  • Merchants can begin processing in less than 1 week

What will a high-risk e-cig merchant account offer you?

A high-risk e-cig merchant account gives you the freedom to run your business efficiently. Tailored for those of us in a still-growing industry, our providers are constantly abreast with changing regulations and follow them faithfully. In addition, we help maintain your good standing by working hand in hand with payment processing partners who understand responsible e-smoking practices as well as criminal law surrounding this market that’s constantly evolving – Bankcard has more than 20 years’ worth of experience and expertise when it comes to understanding how these laws affect merchants.

Below are some non-tobacco related electronic cigarette options and accessories:

  • Disposable E-Cigs
  • E-Juice
  • E-Liquid
  • Nic Salts
  • Nicotine Salts
  • Rechargeable E-Cigarettes

Why your business needs an e-cig merchant account

One of the most challenging aspects of owning a business is accepting payments from customers. Many merchants rely on credit cards to pay for goods and services. In a high-risk industry like e-cigarettes, this can be difficult for merchants. Thanks to Bankcard specializing in electronic cigarette merchant accounts, it’s now easier than ever. With an e-cig merchant account through Bankcard, you’ll have dedicated customer service representatives ready and able to help get your application processed. With fast processing and approval times, you won’t miss out on any revenue-generating opportunities.

E-cig merchants are in a tough spot – they need credit card processing but can’t get it because of their perceived high risk. But as the e-cigarette industry has grown, so have its e-cig merchant account needs. Now, there’s an answer – Bankcard. Bankcard is dedicated to helping these small businesses find customized solutions to meet all their e-cigarette business’s financial goals while providing excellent customer service. 

Selling electronic cigarettes online

E-cigs are a trendy alternative to traditional tobacco cigarettes. In fact, in a study by Penn State, researchers found that study participants given the highest nicotine dose via an e-cigarette abstained from traditional cigarette smoking. The study also deduced that around 10 million adults in the United States now use e-cigs. With e-cigs proven to be a “less deadly” substitute for smoking, more companies are getting into this booming new industry worth an estimated $14 billion. Establishing your own online presence may give you one of the best opportunities to expand your market share.

The differences between an e-cig merchant account and a low-risk merchant account

An e-cig merchant account costs a little more than other, less risky accounts, but it has benefits that set it apart. For example, an e-cigarette business might have their funds delayed up to 30 days, or they may be limited to the number of credit card transactions they can process per month and still maintain approval for funding through a traditional merchant processor.

Bankcard always strives to make the customer experience better, which is why they have strict limits in place for new customers. However, after the first three months of history with successful processing, these limits are lifted, and merchants can be more creative about how cardholders can pay for products.

What is a paraphernalia merchant account?

Did you know that the term paraphernalia actually refers to devices used for a particular activity? These would be glass pipes, lighters, grinders, ashtrays, and rolling machines. In relation to smoking accessories (which often come in handy), water pipes are also considered paraphernalia.

CBD is becoming a booming industry, but some traditional institutions are still hesitant to get involved. Smoking paraphernalia companies have been relegated to high-risk status due in part because of the association with hemp and other related CBD products, which has made banks wary about issuing merchant accounts for these types of businesses. 

Smoking accessories merchant account

More and more people are turning to e-cigs, hemp, or CBD products over traditional smoking methods like cigarettes and cigars because of the health benefits associated with alternative smoking methods and devices. The sales for these alternative items have risen dramatically in recent years with a particular focus on accessories that complement the new lifestyle choice such as pens, bubblers, and water pipes, and this has led to an increase in startups across America that cater exclusively to this industry.

E-cigarette merchant accounts: What to expect during a merchant account application review

Merchants will need to prove they are operating legally by giving underwriters valid disclosures and restrictions that help support the businesses’ claims and receive application approval. Merchants can use a number of methods, such as providing credit card processors with legal documents like licenses or permits, before having an application accepted for higher-risk transactions.

When underwriters review your application from an electronic cigarette or smoking accessory business, they look to see if you’re following established laws. When examining a site to see if it would be approved on top of other factors, the company will have its eye out for products not marketed directly towards marijuana and other substances that are still illegal at the federal level.

Underwriters want to make sure that a merchant is worthy of their investment. Therefore, they look at many factors, including the company’s history with credit card processing and its website. Underwriters will also inspect your bank statements for any suspicious activity or unpaid bills you may have forgotten about to get an accurate picture of where you stand financially before they approve new merchants for an e-cig merchant account.

The simplest way to get an e-cig merchant account approved is by ensuring you have no outstanding debt, depositing enough money in your bank account so you can cover certain expenses, and having an exemplary credit history. These steps show underwriters that you’re running a legitimate business with lower risk for them. In addition, if these three things are true, then merchants will be more likely to receive unlimited accounts, such as greater limits on monthly processing volume or lowered rolling reserves.

E-cig merchant account application requirements

Businesses can apply for an e-cig merchant account today. To get started, simply fill out Bankcard’s e-cig merchant service online application. You should have the following items ready to share with your Bankcard representative:

  • Government-issued photo ID, such as a driver’s license
  • Either pre-printed voided check or letter from the bank
  • Three months of your most recent bank statements
  • Three months of your most recent credit card processing statements
  • Either your personal SSN (Social Security Number) or your business’s EIN (Employer Identification Number)
  • Chargebacks ratio under 2%

Keep in mind e-commerce merchants must also have a fully functional website that’s secure and follows all regulatory obligations.

Bankcard guarantees a streamlined application process and offers approvals within 24 to 48 hours.

Did your credit card processor close your merchant account?

If you are an established e-cigarette business owner and your credit card processor has closed your account, take advantage of Bankcard’s e-cig merchant account service. We offer the highest quality account recovery service in North America because most traditional credit card processing companies don’t want any connection to specific industries such as e-cigarettes. 

You need to work with a trustworthy high-risk payment processor to resume your company’s sales. Any suspension or locked account is due to one of two reasons: either the merchant has violated their own policy, resulting in an investigation and/or shut down, or the bank that holds those funds has frozen them until you contact customer service about getting back on track.

Bankcard will be there to help you through any challenging situation, such as if your e-cig merchant account gets suspended or closed. Not only does Bankcard act fast and get things back up and running as soon as possible, but it has the proper solutions tailored just for you with over twenty different banking relationships.

How does being high risk affect your chances of getting an e-cig merchant account?

An e-cig business is considered a high-risk industry, and most traditional payment processors would not approve you for a merchant account. Selling products such as e-cigarettes will flag you as “high risk” by banks, which means that they may refuse the application for any type of financial services or accounts, including credit cards.

Traditional merchant accounts are a great way to start your e-cig business, but they come with some serious risks. As the e-cig merchant account goes through the underwriting process, weeks after payment approval and sale of merchandise, the merchant account provider then cancels any high-risk product sales immediately. This leaves you without revenue for those weeks until everything can be sorted out again in order to keep using their service.

It’s important to understand that being a high-risk merchant does not exclude you from getting the payment processing you need. You can rest assured – with a reliable payment processor specifically designed to facilitate e-cigarette purchases and other high-risk transactions, you can focus on your business.

What are chargebacks and why are their ratios so high?

Online merchants that sell e-cigarettes and other smoking accessories are at risk of high chargebacks due to a variety of reasons. When there’s a question about a transaction on the customer’s card or bank account, it can lead to what’s known as a “chargeback” if the consumer decides – for whatever reason – that they don’t want to pay. If the merchant does not know in time or if they don’t have enough evidence for their side when this happens, then it will most likely result in a loss.

If a customer’s order is delayed, they may become disgruntled and go through with a chargeback. This can be detrimental to an online e-cig retailer that relies on third-party fulfillment centers or shippers for the delivery of products.

Online merchants are more likely than ever before to use outside resources when it comes to delivering their goods and managing supply lines; but if the merchant doesn’t have good quality control over these external providers, shipping delays could lead customers to cancel orders.

Also, those who engage in fraudulent activity may target these businesses because many of them can’t afford proper security measures or don’t realize how much work is involved in chargeback protection and mitigation. Unlike larger businesses that have a higher awareness about what steps must be taken for protection, some smaller merchants may not know these protections exist until after their store has fallen prey.

A chargeback ratio is considered high when it’s above a certain percentage – typically, anything over 1% is considered a high risk.

Why are chargebacks bad?

Racking up chargebacks is much more detrimental to an e-cig merchant account vs. issuing refunds. You can lose your merchant service account if you have a high ratio of chargebacks, which means it’s important for all companies to be aware that this process could hurt them in the long term. E-cig shops are at risk because when these terms are terminated and need another provider, there’s not always someone who will take on the business.

A high amount of chargebacks raises red flags for merchant account providers and payment processors.

Why high chargebacks are red flags for processors

Businesses that don’t have the cash to pay refunds or chargebacks for disputed transactions can quickly find themselves in big trouble. Credit card processors will quickly drop an e-cig merchant account with high chargebacks because these usually are signs of a problem. Having a high number of chargebacks, especially if the merchandise was not returned, means your business is losing out on money and inventory while also painting the business in a bad light in the eyes of payment processors and merchant account providers.

How to reduce chargebacks

One of the best ways to prevent chargebacks is to offer your customers the best possible customer service and experience. Poor experiences or credit card fraud can sometimes result in a chargeback, so it’s important to be transparent with your customers and provide detailed receipts of their purchases. E-cig businesses should let customers know what they purchased when they pick up an itemized receipt for all items bought at that store during one transaction.

Merchants should do their best to stay in contact with customers and ensure that they are satisfied immediately after each purchase. For example, send an email thanking them for the purchase, send over some final versions of receipts with your information on them so you can be contacted later if there is any confusion or something goes wrong. You can also offer a FAQ sheet of typical questions your customers ask. These FAQs should be visible on your website, on receipts, in emails, and even at your point-of-sale, whether in-store or online.

Bankcard’s elite chargeback prevention system is the envy of merchants everywhere, and their partnership with leading solutions providers has allowed them to provide a premier service for high-risk businesses like yours. The Bankcard team works hard to develop these partnerships and keep up with evolving fraud tactics, ensuring your business can stay ahead in this competitive market segment.

The chargeback prevention and mitigation system operates with banks and card issuers, giving merchants control over the resolution of credit card transaction disputes. Alerts can trim a lot off your chargeback ratio by providing you an in-depth look at where you can make improvements for more satisfied customers.

Some merchants have been regretting their decision not to take a proactive approach when it comes to chargebacks. Unfortunately, this sort of behavior can end with the company losing its business and even risk having their e-cig merchant accounts closed down for good.

E-cig and related-industry categories

The four-digit numerical codes given to business establishments by countries like the United States and others, including England, are known as Standard Industrial Classification (SIC) codes. These SIC numbers identify the primary purpose of a company, but there is more to it than meets the eye: these numbers have been neglected for years. NAICS, the six-digit codes that were created to classify similar types of businesses under one category – well, numerous business types have been added over the years and with new data analysis techniques, such as statistical agencies collecting information on economic impact related factors, using the codes must have fallen out of favor due to the complexities.

E-cigarettes are being overtaken by and lumped into the tobacco industry. Unfortunately, especially for those that don’t sell cigarettes, this can be a significant liability. Traditional tobacco cigarettes and e-cigarettes are not the same thing and shouldn’t be classified as such. Various agencies, such as the CDC, have done research to prove that e-cigarettes don’t pose the same health risks to consumers as traditional tobacco cigarettes do. For now, though, companies who want to protect themselves from future lawsuits would do best by not selling anything related under any SIC code other than 5194: Tobacco and Tobacco Products.

Other SIC numbers associated with the industry include:

  • 5993: Tobacco Stores and Stands
  • 5199: Nondurable Goods, Not Elsewhere Classified
  • 7389: Business Services, Not Elsewhere Categorized

E-cigs are often the subjects of a business’s SIC code under industry 453991: Tobacco Stores NAICS. Sometimes they must use 424940: Tobacco and Tobacco Product Merchant Wholesalers as well to categorize themselves accurately.

Not blowing smoke – e-cigs are popular and safer

In 2019, 4.5% of adults routinely used e-cigarettes, according to the Truth Initiative, and that percentage represents about 10.9 million Americans. However, the survey also revealed that, of these adults who use e-cigarettes, around 56% also continue to smoke traditional tobacco cigarettes.

A recent survey conducted in the United States has concluded that while there is no conclusive evidence of their safety or riskiness for human health, e-cigs might be a good substitute for those who can’t quit smoking tobacco products. The US Centers for Disease Control and Prevention (CDC) report states: “The toxicant levels observed in some studies raise questions about chronic exposure.” We do know that they don’t contain many carcinogens like arsenic or vinyl chloride, which means smokers will have a lower chance of developing cancer as well as other fatal diseases such as lung disease.

A new study from the United Kingdom has found that e-cigarettes are safer than traditional cigarettes, and more people are starting to switch.

It seems like e-cigarettes are the safer way to smoke, according to a report from Public Health England. The Royal College of Physicians also supports this statement and urged tobacco smokers–even those smoking just one or two cigarettes per day at most—to switch over. Canadian scientists found that e-cigs are less harmful than traditional cigarette smoking because it contains fewer toxins. In addition, there’s no tar buildup in your home, car, or clothing. You effectively eliminate first-hand smoke for yourself and second-hand smoke exposure for your friends, family, and others around you who may not be interested in taking part in your nicotine addiction.

Clearing the air about e-cigs

E-cig “smoking” is basically inhaling water vapor through an electronic cigarette, which is a battery-operated inhaler. When users take hits from these devices, the batteries heat liquids that are then atomized into inhalable vapors. E-cigarettes use cartridges called cartomizers and LEDs to light when drawing on them—both of these also contain varying amounts of nicotine for those looking for either relief from addiction or pleasure in smoking again without the health risks associated with harmful chemicals found in regular cigarettes.

E-cig devices are a great way for smokers to kick their tobacco addictions by offering them an alternative. They also eliminate harmful second-hand (and even third-hand!) smoke, which is known as the leading cause of all cancers, heart disease, and stroke in adults.

Electronic cigarettes

Get your new store accepting credit cards in as little as 24 to 48 hours! Bankcard has the perfect e-cig merchant account for any electronic cigarette shop. We’ll help you find one to fit your needs and get it set up quickly with NO application fees, so no time is wasted filling out needless paperwork or waiting for long approvals. 

Merchant account for e-cig stores – electronic cigarette merchant account

Without a doubt, the Family Smoking Prevention and Tobacco Control Act of 2009 has caused processors to be wary about processing payments for electronic cigarettes. These devices are technically not tobacco or cigarettes, but due to their status as an unregulated product, traditional banks and low-risk merchant services providers would rather avoid any legal risks by steering clear of the industry and won’t provide an e-cig merchant account.

As a result, electronic cigarette companies are being forced into finding other ways of accepting transactions, such as cash-only models, which increase the prices for customers who need access without delays in delivery time or other hurdles to purchasing this healthier smoking alternative.

Why browse for payment services when you could let the experts take care of it? Our team at Bankcard can help you set up your e-cig merchant account so that your e-cigarette shop is off to a good start with all the features you need for a successful high-risk merchant account.

The complete e-cig merchant account

Bankcard has a customer-friendly approach to credit processing, with fast turnaround times and easy application guidelines for any type of business owner or entrepreneur looking for an e-cig merchant account designed specifically around your needs!

The benefits of a Bankcard e-cig merchant account don’t end there: you’ll also get direct support from your personal specialist who will help guide you through every step on getting set up right away as well as offer ongoing mentorship so you can grow your company without worrying about not having all the tools necessary to succeed, such as access to financing at competitive rates with a consistent focus on simplicity.

  • No Application Fees
  • Streamlined Application Process
  • Friendly and Fast Customer Service
  • Competitive Rates
  • Over 50+ Banking Relationships
  • Multiple Secure Payment Gateway Options

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