What is a vape merchant account?
Businesses selling e cigs and e liquids have been fueling the growing vaping industry that has taken off globally, making it rare to go anywhere today without seeing someone using some sort of vaporizer or electronic cigarette. Vaping, the process of inhaling a water and nicotine mist has gained traction as a cleaner, better smelling and less toxic alternative to smoking, leading to the expansion of e cig and vape shops around the USA along with a large online industry selling e cig and vaporizers along with a variety of different flavored liquids.
Vaping has been growing trend for over the 10 years, from a small fad that entered into the smoking world around 2004 to a type of lifestyle today, the use of vaporizers and e cigarettes has continued to grow year over year. Since 2006, millions of Americans have been using vaporizers every day and the demand for new vaporizers and e cigs has carved out niche industries that cater by supplying the growing numbers of vaping customers. And though federal regulation has been slow to catch up to the industry, the threat remains that stricter guidelines can be imposed by government agencies and banking institutions alike, making the need of a vape merchant account all the more important for businesses.
Why is it important to have a vape merchant account?
At this moment, there are limited federal and local laws restricting the sale of e cigarettes and vaporizers online, but this can change in a rather suddenly if the climate surrounding the industry gains scrutiny and becomes a target. Many banks have already removed themselves from the online marketplace because of the potential high risk of online vape merchant accounts, though most of these companies will gladly accept an application from a storefront applying for a vape merchant account.
E cigarette and e liquid merchants are highly recommended to seek the services of a vape payment processor that understands the vaporizer industry and continues to accept merchants that are operating both in retail and online locations. Partnering with a payment processor specializing in higher risk businesses and niches, such as the online vaporizer and e cig industry can prove to be beneficial to a merchant if regulations become tighter and vaporizer merchant accounts become harder to find.
Merchants that opt to use a retail storefront account for online sales or have been set up by a merchants services company as a different type of online retailer run the risk of having sever account problems when trying to use their merchant account for online vaporizer payment processing. Its strongly recommended for merchants to ensure that they are being set up by their merchant services representative as a vape company and its equally as important to inform banks and merchant services reps that their business is selling vape online.
Disruptions in services, funds being held up for months, significant monetary fines and the possibility of being terminated from acquiring future merchant accounts can occur if gross negligence is determined to have occurred with a non-vape merchant account. Certain payment gateways might not allow the sale of tobacco or other higher risk products through their application, a problem that can be easily avoided when using a merchant services company experienced in online vape credit card processing.
Who provides vape merchant account services?
As vaporizer credit card processing services have become more stringent and harder to find, merchants have had to look to other industries to find payment processors that can to work with these types of higher risk businesses online. Some merchants have opted to go offshore to work with payment service providers that will accept a variety of different types of merchants, while other merchants have focused on finding payment processors in the USA that are willing and able to still accept this business type.
High-risk payment processors in the USA have the ability to work with a number of different merchant types that most payment service providers are unable to accommodate due to increasingly tight banking restrictions and government regulations. Working with a sound financial network behind them these payment processors can place a number of different accounts from a variety of different industries, a selling point that might attract vape and e cig merchants to partner with these kinds of higher risk processors, but these companies might not be the best solutions for vapor businesses looking to process online credit cards with.
A common source of credit card processing services for vape businesses has been through tobacco merchant services companies, a niche that has been carved out from the merchant services industry in response to the increasing difficulty surrounding tobacco payment processing. Many merchant services providers that specialize in the tobacco industry have banking relations intact that allow them to place many vapes, along with other tobacco types of businesses with retail and online payment processing services at affordable rates.
By shopping around, vape merchants will be able to find the payment processors that specialize or are still able to work with their industry, preventing any types of future disruptions in service or other complications in regard to the merchant account. Finding a processor that offers competitive rates, reliable services, and a simple integration into their payment gateway can make the process of establishing merchant services quick and painless.
How to get a vape merchant account?
Once merchants narrow their search down to a payment processor to work with their vape shop, whether it is through a storefront or online, the process for application and integration is relatively similar. Most merchant services companies will provide an application with a list of required documents needed by the payment processors underwriters to complete their due diligence on both the merchant and business before rendering a decision.
The information needed by payment processors from merchants on an application is generally about the same across all banking companies, including verification of the merchant’s ID and Social Security Number to do a credit score check. In addition to the credit history of the merchant, the payment processor will also check merchants against the terminated merchant file, also know as TMF, to ensure that there will no outstanding issues or problems between the merchant, business and the card associations prior to approval.
Other documents used during the application process include prior processing statements for pre-existing businesses, providing an insight into the merchants processing volume and the recent sales history of the merchant. Most banks will also require a copy of a voided check, or a letter from the merchant’s bank with information normally on a check, to provide the necessary information for the acquiring bank to properly settle the daily transactions.
Depending on how in depth the payment processor wants to go with their review process or required documentation from the card association, merchants could be required to submit other documents to complete the application process. Merchants selling tobacco products, including loose tobacco, rolled tobacco and sometimes e cigs can be required to submit a tobacco legal letter of compliance to inform the card association that the merchant does comply with the required laws in their jurisdiction to sell tobacco.
Where to find a vape merchant account?
Many payment processors can still set up retail vape shops with a credit card terminal as long as their sales are generated from swipe transactions from within their storefront. The number of payment processors that can handle card not present (CNP) vape transactions is significantly lower, due to the regulations and guidelines set forth from each acquiring bank to the risk and industries they want to work with.
Most tobacco specific merchant services companies do not have a problem approving a CNP vape merchant account with their network of tobacco acquiring banks. The requirements for each of these tobacco payment processors might vary depending on the banks they are using, some might require a legal compliance letter and others might not, but all banks will require a website age verification service on the website to ensure that all customers are of the age when making a purchase.
Merchants are encouraged to contact Tobacco Merchant Services to learn more about our vape merchant account services that we can provide to both merchants operating retail storefront locations and online e-commerce stores. For more information or any questions about our payment processing services, merchants are encouraged to contact one of our vape payment processing professionals for more information.