Finding a payment processor that is able to work with glass pipe merchant accounts has become more difficult over the last few years, between increasing government regulations and tighter underwriting requirements by payment processors, the ability for online startups in the glass industry to accept payment cards has all but disappeared. The perceived risk that the glass pipe drug paraphernalia sold by these merchants will include other illegal products has been the driving force behind payment processors exiting the industry for risk of violation of any federal and local laws for the sale of such products as medical marijuana and CBD oils.
Glass pipes, also known as smoking pipes, have been used for centuries by people in different cultures from all corners of the globe to smoke a variety of types of substance, most commonly tobacco, making pipes one of the oldest known methods for tobacco consumption. In the United States, Native Americans began using stone pipes called Čhaŋnúŋpas centuries prior to the arrival of Europeans in the 15th century for to smoke tobacco for both ceremonial and religious purposes; and though the popularity of pipe smoking has declined, different varieties of pipes, also known as bowls or bongs are commonly used today to smoke flavored tobacco, loose leaf tobacco, cannabis or other illegal substances.
This illicit use of smoking pipes and other drug paraphernalia has created a gray area within the tobacco industry, making it increasingly difficult for merchants to obtain glass pipe merchant accounts for their online stores while retail storefronts are still able to set up merchant services without much hesitation. Working with a payment processor that is familiar with the glass pipe industry will allow merchants the ability to quickly set up a merchant account and begin processing transactions with a reliable and stable merchant services provider.
What are Merchant Service for Glass Pipes?
Merchant services refer to the merchant accounts that are provided through a financial services organization which is part of the payment card association, enabling the merchant to send customer transactions to the Visa, MasterCard, American Express and Discover payment networks. A merchant account is set up after businesses go through an application process through either a merchant services provider, payment processor or merchant acquirer who continue to monitor that the merchant is operating within the terms and conditions of the payment card networks.
There are cost to use a merchant account, businesses will generally be charged a small fee for any transactions sent through the network including a discount fee based on the value of the sale, transaction fees, monthly fees and possibly other fees depending on the services used. These fees cover the costs assessed by the payment card network and the payment processor for the cost charged by customer’s card issuing bank and the management of their account which includes providing daily settlements of fees and providing monthly statements.
Advantages of Glass Pipe Merchant Accounts
The glass pipe industry has a history of being tied closely to the drug and drug paraphernalia cultures that became mainstream in the 1960’s, and while pipes can be used for tobacco smoking, the association to their use with illegal substances has made it difficult for merchants to set up online payment processing services. These types of higher risk merchant accounts should be handled by a merchant services provider familiar with the glass pipe industry and can provide a solid banking relationship; insuring that the merchant account provides longevity while remaining fully compliant with all local and federal regulations along with the guidelines of the payment card networks.
In some circumstances, merchants will choose to use an eWallet or sponsored merchant account that accepts credit and debit cards like any other merchant account, but instead of using a direct merchant account in the businesses name, the account is managed by a payment services provider with other merchants sending their transactions through the same account. These types of accounts might be enticing for glass merchants looking for a quick set up, having a direct relationship with the acquiring bank or payment processor will generally offer a more secure solution with high approval ratios, fewer restrictions and lower fees than other types of payment service options available.
Merchants that want to sell their glass pipes online will want to use a payment gateway that is easy to use with direct API integration and fully PCI Compliant, providing complete security of customer card account information and allowing merchants to protect themselves from the possibility of fraudulent transactions occurring. A glass pipe payment gateway will provide merchants complete control, allowing for easy reporting and simplified transaction management can help streamline the business process. With our payment gateway, integration into a website’s shopping cart is fast and easy with plugins available for over 100 different shopping carts and is a simple solution for all e commerce glass pipe companies.
Advantages of using Glass Pipe Merchant Accounts
A generally confusing topic for merchants, understanding merchant accounts might not be a high priority for merchants looking to get started selling glass pipes, but understanding some of the differences between accounts and how they are priced can save businesses money and headaches in the future.
What are Glass Pipe Merchant Accounts?
A merchant account is a form of bank account that is established at an acquiring bank to allow merchants the ability to accept credit and debit cards by authorizing transactions from the customer’s card issuing bank. Transactions that are initiated at a merchant’s location through a credit card terminal or on the merchant’s online store with a payment gateway are sent through the payment card networks to the customer’s issuing card bank for account verification and approval of the requested funds.
The customer’s card information is either swiped or dipped into the payment terminal of the merchant where the card account information is collected and encrypted into a secure financial file before being sent from the machine through the payment processor/merchant services provider and acquiring bank to the payment card association. At the card associations, the credit card account information is deciphered to determine the name of the card issuing bank, card account number and the amount of the transaction so the customer request can be sent to the proper institution for authorization and payment.
Once the customer’s card account information has been received by the card issuing bank, a series of fraud checks are performed to insure that the cardholder has provided the correct information and nothing looks suspicious along with a financial verification of available funds to insure that customer has the necessary funds to cover the amount of authorization request. Unlike Visa and MasterCard, the networks of American Express and Discover operate as card issuers in addition to payment processors, meaning these companies handle all aspects of a transaction from acquiring the merchants to managing the customer card accounts.
After a decision has been rendered by the card issuing bank, regardless if the authorization is approved or declined, that response is sent back through the payment card network to the merchant’s terminal, providing either an approval with a transaction ID or a decline with a response code explaining the reason. Merchants with retail storefronts will usually use a credit card terminal, that can be either a POS system or a stand alone credit card machine while merchants that are online will use the services of a payment gateway or virtual terminal that can either be integrated into their website or managed through a hosted page by the payment processor.
Fees for Glass Pipe Merchant Accounts
To accept debit or credit card payments for purchases, merchants will be charged a fee for the payment card services that is generally billed on a monthly basis to the merchant, determined by the volume along with any other services that might be rendered during that billing cycle. There are a few different pricing structures that payment processors can use to determine the fees for the merchants, but most merchant services companies use a payment structure that includes a sales discount rate, fixed transaction fees and other fixed fees, such as monthly or network fees are set costs, that are assessed monthly on all accounts.
The fees charged to merchants for glass pipe merchant accounts are most commonly from 2 different types of pricing models; either tiered pricing or the interchange plus pricing structures, but now some merchant services companies are offering other types of billing gimmicks to interest merchants. Depending on the type of business and the sales types and volume generated by that merchant, the best pricing structure might vary between businesses, but having a good understanding the the different methods can help merchant determine the best choice for their business.
What was once the most popular fee scale, the tiered pricing structure establishes 3 to 6 or 7 different price points that transactions will fall into once the payment has been processed, otherwise known as qualify, placing each payment card transaction into the closest group they qualify for. The true card fees are determined by the payment card network, but the cost to the merchant is ultimately decided by the merchant services company and the pricing structure the business is set up with. Generally speaking, the more tiers that a business is offered, the closer those fees will be to the true cost of the payment cards, thus giving the merchant better rates on downgraded transactions.
One of the most commonly used pricing structures today that was made popular by many of the larger retailers in the USA has been the interchange plus fee schedule, a much simpler and generally a big cost saving method to bill merchants compared to the tiered pricing method from the past. The interchange plus, also known as cost plus, takes the true cost of every payment card accepted by the merchant and tacks on a set fee on top of that cost, guaranteeing merchants consistent billing on all their charges by eliminating costly and unnecessary downgrades which has been the driving force behind the popularity of this billing method.
A small trend that has started today with some merchant services companies has been to offer businesses flat fee services, whether its a flat fee for all types of card transactions or a flat monthly fee for all of their sales, this type of billing model has emerged. While some of these programs can benefit startup merchants with no monthly fees, more times than not merchants that are operating small to large companies are spending more money for their merchant services than they would with an interchange plus system, making these program nothing but a costly sales gimmick.
Compliance for Glass Pipe Merchant Accounts
Most of the business today that are looking for glass pipe merchant accounts will need to be registered with the card payment association as a tobacco merchant to insure that all local and federal guidelines are being followed and any future changes to regulations will be satisfied according to law. While many of the glass pipe businesses are not selling tobacco products, the perceived risk that these businesses pose for selling cannabis, CBD or potentially illegal substances is far to great and too much of a concern to not require compliance and registration.
In this industry that lies within the gray area between legal and illegal, the importance for businesses to use glass pipe merchant accounts from an experienced payment services provider is crucial for maintaining a merchant account without disruption or limitations. A tobacco merchant services provider can help insure a quick and simple application process to expedite the setup while remaining current on any changes to registration, compliance or other legal changes that are important for the merchant’s business to continue operating.
In addition to remaining in complete compliance and continuing to remain registered with the payment card associations, merchants will want to confirm that once they are set up with merchant services, that they are placed into the correct MCC code for their industry. MCC codes exist for every industry type, allowing the card associations to better categorize and manage the merchants using their payment networks, so once a business is approved for merchant services they can be placed in the correct corresponding category.
The most common MCC codes for Glass Pipe Merchant Accounts:
- 5194 – Tobacco and Tobacco Products (Primarily Used)
- 5993 – Cigar stores and stands
- 7389 – Business Services, Not Elsewhere Classified (Rarely Used)
Compliance for Online Glass Pipe Merchant Accounts
Similar to hookah merchants and e cig businesses operating an e commerce store, online credit card processing services can be challenging at times for these businesses due to the questionable gray area surrounding the legal status of all these products and the risk that the merchant services providers face when accepting these merchants. While these merchants in the glass pipe and bong industry might not be selling tobacco products, the banks at times will require strict guidelines for opening a merchant account and continually check to verify that all aspects of the business are being operated in a legal manner to help ensure that no local or federal guidelines are crossed or any restrictions by the government are being violated through the sale of products.
Working with an experienced payment processing professional, merchants can rest assured that they will not have any problems with the acquiring banks or the payment card association once their website has been viewed and pre-vetted for any potential troublesome material. All registrations and compliance standards should be tracked by your merchant services provider to insure that there is no disruption or additional fees associated with the glass pipe merchant accounts due to paperwork.
Why are Glass Pipe merchant accounts considered high risk?
Most products being sold by glass pipe companies are advertised as tobacco accessories, but they are generally being used for cannabis or other illegal substances instead of their intended purpose, even though most of the glass pipe business are not selling tobacco, cannabis or CBD products, many of the payment processors are unable or unwilling to accept the risk this industry brings.
Glass pipe shops that are operating in a retail environment have not had as much of an issue being set up with merchant services due to the fact that the customers are present, allowing merchants to verify ages and merchant services providers can verify that the shop is not partaking in the sale of any cannabis products. Businesses that are selling any type of federally illegal products might incur significant fines from federal and/or local authorities, making it significantly hard to find a merchant services provider that will accept this merchant type.
Even with all the regulations and the risks surrounding the glass pipe industry there are still merchant services companies that have found this niche, understand it and are willing to operate in it, accepting new online merchants with few restrictions and affordable pricing. Payment processing for glass pipes will remain a difficult and very specialized industry unless federal laws ease up on the regulation of cannabis and its other products, allowing for new payment processing services to enter into the arena.
Glass Pipe Payment Gateway
Merchants in the glass pipe industry will want to work with a payment gateway that is not only PCI Compliant, but also allows for higher risk businesses to insure that the gateway services are not turned off expectantly due to the high risk nature of glass pipe merchant accounts violating any of their terms of service. An experienced glass pipe merchant services provider can help businesses find a payment gateway that is secure and willing to partner with these higher risk businesses for a long term working relationship.
Benefits of our Glass Pipe Payment Gateway
- Quick API Integration into over 100 shopping arts
- Detailed Reporting and Simplified Transaction Management
- Automated Transaction Management between multiple accounts
- Fully PCI Compliant Payment Gateway
Benefits to Online Glass Pipe Merchant Accounts
Opening an e commerce store on the internet can help a business dramatically by allowing merchants the ability to reach a much larger audience than what is possible with a retail storefront. Easy integration into a website will allow for merchants to quickly make the transition from retail to online, with full transaction management available in the payment gateway, the only real change merchants have to prepare for when selling online is the shipping.
How to get a Glass Pipe Merchant Account
Glass pipe merchants will have to go through an application process regardless if they operate a retail storefront or are applying for an online e commerce store to verify that they can qualify for a merchant account by meeting the minimum requirements set forth by the payment processor, merchant acquirer and payment card network.
Merchant services companies will usually require the same documents for complete merchant setup and though some payment processors might ask for more or less documentation, the following documents are a good start for merchants to gather when applying.
- Completed Application with Social Security Number
- Copy of the Owner’s Drivers License or Passport
- Voided Check from Business Checking Account
- Previous 3-6 months of Business Bank Statements (depending on Processor)
- Last 3-6 months Processing Statements (for current merchants, depends on processor)
The underwriting process might differ between payment processors, some requiring different documentation or require additional registration to set merchant accounts through them, but as a general rule of remember when applying for merchant services, the more information you can provide, the faster you can be approved.
Submitting a completed application is generally required by all payment processors regardless of how quick and easy their underwriting process is, allowing the underwriters to do a complete background and credit check of the applicant to insure they are eligible for a merchant account. Part of the KYC (Know-Your-Client) process has underwriters verify that their applicant has their minimal required credit score and is not on the MATCH or TMF (Terminated Merchant File) list for any reason, whether it be excessive chargebacks or funds owed to a previous processor.
The banking information of the merchant will be needed by the underwriters to build the merchant profile, allowing for settlements without delays and fast funding of any registration fees required by the payment card network. For startup businesses that might not have pre-printed checks at the time of application, a letter from the bank stating the merchants name, company name along with the routing number and checking account number of the bank account.
For glass pipe shop merchants that already have a merchant account and are applying with a new credit card processor, it might speed up the application process to provide the last few months of credit card processing statements and bank statements, to help build a clear picture of your business with the underwriting team. While these documents might be necessary for some payment processors, it can help in instances where they are not required, speeding up the application process and at times guaranteeing merchants better rates.
Tips for finding the best Merchant Services for Glass Pipes
Businesses that are operating in niche industries might find it difficult at times to do research on the different payment processors before deciding to apply with one, with merely forums and a small community to speak with, asking the important questions from the start can save merchants time and money by choosing the right glass pipe merchant services provider from the start.
What to ask Glass Pipe Shop Merchant Account Provider
- Verify the processing can work with glass pipe
- Confirm CNP (Card Not Present) glass pipe transactions are accepted
- Payment Gateway integrates with an API
- Verify High Transaction Approval Rate
- Insure Transactions settle Daily
- Fully PCI Compliant Gateway and Terminals
- Full Customer Support with all products and services
- Make sure the Interchange Plus fee structure is offered
Merchants in any higher risk tobacco industry are encouraged to ask the same questions whether they are an e cig company or a hookah shop, finding the right merchant services provider from the start can save endless headaches and problems with customers in the future.
Glass Pipe Merchant Accounts from Tobacco Merchant Services
Partnering with a professional in the tobacco industry like Tobacco Merchant Services, businesses are set up directly with an acquiring bank, eliminating any middlemen and junk fees while providing fast authorizations and daily settlements without the lower monthly volume limits along and increased restrictions than businesses partnering with sponsored or aggregated payment processing services have to work with.
- Low Cost Glass Pipe Credit Card Processing
- High Approval rates for Debt and Credit Cards
- Full PCI Compliance for Secure Transactions
- Industry Leading Online Fraud Protection
- Award winning Customer Support
Tobacco Merchant Services offers merchants:
For more information about our retail or online glass pipe merchant accounts or other drug paraphernalia merchant account services, please speak to one of our Tobacco Merchant Services payment processing agents. Our agents will be more than happy to answer any questions you might have about your business or our payment processing services.