Tobacco Payment Gateway

Nearly 10% of all sales in the United States occur online and the growth of online transactions increasing by in excess 15% year over year, many merchants have focused on building an online presence to profit from the fastest growing segment of the economy. Online merchants process transactions through the same payment card networks as their retail counterparts, but many times they use other equipment or services that can provide better functionality and greater flexibility to fit their e-commerce needs.

The most important function of a credit card terminal; including payment gateways and virtual terminals, is to provide a safe and secure means for customer card account information to be transferred for authorization at the banking networks. Most retail tobacco and smoke shops will opt to use a credit card terminal to handle their day to day sales within their storefronts, this low-cost solution offers the necessary PCI Compliance without the cost of larger and more complicated payment terminals. Larger businesses that use inventory management systems, such as mail order shops or businesses that are operating a cigar bar will many times invest into a POS system to help manage the complex day to day needs of the employees and managers.

Merchants in the online tobacco industry will need to use a tobacco payment gateway as a secure method to link their online store to the payment card networks of their merchant account, providing a fully PCI Compliant solution to handle all sensitive cardholder information. While some merchants will use a credit card terminal for their retail storefront transactions, some payment gateways also provide access to a virtual terminal for both MOTO and swiped transactions as a convenient way to consolidate transactions into an easily manageable environment for improved customer service and transaction management.

Finding the best solution for a business’s credit card terminal needs can help keep equipment costs down while streamlining the payment processing operations.  With a variety of credit card terminals and payment gateways available, it is important for merchants to understand what their business needs to succeed.  Merchants that decide to use a virtual terminal many times are able to better organize all online and retail sales, allowing for better customer service and transaction management.  Finding the best solution for each business can only help improve the credit card processing functions of the business.

 

Ways to Accept Credit Cards

Depending on the type of tobacco business, merchants will need the proper credit card machine to handle the day to day operations and needs of their customers and business. The most common ways for merchants to accept payments include:

Most merchant services companies are able to provide businesses with the appropriate equipment depending on their needs and budget the merchant has been allocated for this kind of equipment. Many of the basic payment terminals can be provided to merchants for little or no cost, while larger POS systems might require substantial investment or a long-term financing agreement.

Tobacco Payment Gateway

What is a Payment Gateway?

Similar to a counter-top credit card terminal found in most retail establishments, a payment gateway is an online programming application that accepts cardholder account information into a secure environment, encrypting and sending the customer files to the merchant bank for transaction authorization. Unlike a credit card terminal that accepts payments through a secure device, a payment gateway is linked directly into a merchant’s shopping cart where payment card information is input directly by the customers from their own web browser, creating a potential fraud nightmare for the payment card industry.

Tobacco payment gateway service providers have designed their payment terminals to secure card account information through extensive encryption to protect information being sent from one server to another, a transaction that could easily be interrupted and stolen without the proper security functions. Part of the Payment Card Industry’s push to decrease fraud and improve the security of their networks was the implementation of the PCI Compliance, a set of industry standards that required all service and equipment providers to adhere to. Non-compliance can result in hefty fines and vulnerability for losses resulting from fraud occurring on their network.

In addition to providing secure transactions, most payment gateways allow merchants many additional functions including employee permissions, tracking customers, transaction management along with a robust reporting system for a general sales manager. One feature that many payment gateway programs offer is a virtual terminal, an online application that is part of the gateway allowing for merchants to use process transactions as if its a desktop credit card terminal, allowing either chip/swiped transactions with a card reader or manually entry of card account information using a keyboard.

How does a Payment Gateway Work?

An online transaction originating from a merchant’s website is a highly secure process that passes through a number of different organizations before returning a response back to the customer and merchant. The order of operation is similar to a retail transaction with the utilization of a payment gateway to securely link the merchant to the payment processor.

  • E-Commerce Store
  • Payment Gateway
  • Payment Processor
  • Merchant’s Acquiring Bank
  • Payment Card Association
  • Customer’s Card Issuing Bank
  • Response

A payment gateway operates as a business’ online credit card terminal, transmitting card account information securely from a customer’s location to the credit card networks, instead of requiring the customer to be in the store location.  The functionality and flexibility that come from using a payment gateway can make the buying experience much easier for the customer, but could also pose an immense security challenge for the merchant.

Customers using an e-commerce website enter their payment card account information into the secure section of the online store’s shopping cart program, allowing the customer web browser to encrypt and pass the card account information over to the merchant’s payment gateway server for decryption.  Encryption between web browsers and payments gateways are handled through an Internet Protocol, a constantly updating cryptographic application that ensures the security of data being transmitted between servers.

At the payment gateway, card account information is once again encrypted for transmission to the payment processor that is working on behalf of the merchant’s acquiring bank.  Using a messaging format similar to ISO 8583 for electronic financial transactions, the payment gateway ensures that information is handled according to the most current PCI-DSS standards, eliminating the payment gateways and merchants liability for theft or fraud from transactions being sent through.

The payment processor passes the encrypted file along to the payment card association for decryption and authorization for the transaction at the proper card issuer.  American Express and Discover operate as their own closed networks, meaning they will accept the authorization requests and issue a response code directly.  Visa and MasterCard, on the other hand, license their network to other card issuers, allowing for many banks and other financial institutions to issue cardholder accounts, requiring authorization requests to be sent to the proper bank before a response can be returned.

The authorization request response will be sent back through the payment card network, to the payment processor and over to the payment gateway to be displayed for both the merchant and customer to see.  Declined transactions will also display a response code explaining the reasoning for the denial of funds, whether the account is closed, no funds or available or it is being declined by the issuer.

Types of Merchants utilizing Payment Gateway services

Tobacco Payment Gateways can be used by a number of different types of online merchants selling all types of tobacco products over the internet, from cigar shops to vaporizers, there are a number of different types of segments within the tobacco industry for merchants. As trends have come and gone over time in the tobacco industry, new products will continue to be offered by merchants for sale online and in retail formats making it important for tobacco merchants to partner with a payment gateway that will work with all types of tobacco products without any concerns now or in the future.

Common Tobacco Payment Gateway businesses

  • Online e Cigarette Stores
  • Online Cigar Shops
  • Online Smoke Shops
  • Online Hookah Shops
  • Online Vape Shops
  • Online Loose Leaf Tobacco and Shisha
  • Online Vaporizers and Accessories
  • Online Drug Paraphernalia including Glass Pipes and Bongs
  • Other Tobacco Accessories including Rolling Papers and Rolling Machines.

Payment gateways are not limited to tobacco businesses, but businesses in the tobacco industry looking to sell online are encouraged to partner with a payment gateway provider that can specialize in the tobacco industry.

Benefits of a Tobacco Payment Gateway

Finding a merchant services company that can work with the tobacco industry has become an essential part of establishing a successful online tobacco company, with constantly changing attitudes by banks and lawmakers towards tobacco and accessories, finding a stable solution has never been more important. Most tobacco payment processors will be able to provide merchants with a reliable and secure tobacco payment gateway to ensure that there are no problems in the future with the product type being sold on the merchant websites.

Tobacco Payment Gateways offer:

  • Reliable Payment Service Provider
  • Securely Accept Credit Cards Online
  • No Risk of Merchant Account or Payment Gateway Closures
  • Low-Cost Pricing Structure for Retail and Online Transactions

Partnering with a leader in the online tobacco industry will help ensure that businesses are paying some of the lowest fees available to tobacco businesses regardless of their location or business model.  Merchants operating in less mainstream tobacco industries that are viewed as a medium to higher risk will also want to use a merchant services account and payment gateway service provider that has the ability to work with all types of businesses to ensure the longevity of the merchant accounts.

What is Needed to set up a Tobacco Payment Gateway?

Getting started with a tobacco payment gateway will require merchants to have already built their e-commerce website with a functioning shopping cart along with establishing a working relationship with a payment processor that can provide the merchant account. Payment gateways that are not part of the merchant account will generally require a method to bill merchants monthly for transactions being processed, usually funded by a credit card or checking account. Merchants that are looking to use the payment gateway as a virtual terminal will want a payment card reader they can install in their storefront to use with their online store.

Merchants will need the following to use a Tobacco Payment Gateway

  • e-Commerce website with shopping cart installed
  • Tobacco merchant account MID (Merchant ID)
  • Card Reader for merchants using the Virtual Terminal
  • Business Bank Account for settlements and gateway fees and other merchant account expenses

Finding the right Tobacco Payment Gateway

Merchants looking to find the best payment gateway to fit the needs of their business will usually consider a number of different points before making a decision on the gateway they plan on partnering with. Here are a few questions asked by merchants looking for the best tobacco payment gateway solution:

  • Suitable for Tobacco Products
  • Compatible with Most Shopping Cart Software Programs
  • Functionality to Perform the Tasks required by the Merchant
  • Affordability to fit any Business budget

Merchants with any questions about payment gateways are encouraged to contact our team at Tobacco Merchant Services for more information so businesses can make the best decision the first time.

Tobacco Virtual Terminal

What is a Tobacco Virtual Terminal

An option that some tobacco payment gateways offer is the ability to use their platform as a tobacco virtual terminal, allowing for businesses to run secure transactions either online, storefront or in a Mail Order/Telephone Order (MOTO) environment; a very flexible feature for merchants operating in multiple capacities or in the midst of growing.  Through an existing payment gateway, merchants can enter card information using a keyboard or swiping the payment card into a card reader, the tobacco virtual terminal is able to securely accept and process a variety of different payment card transactions, including debit card, credit card, and ACH payments through a fully PCI Compliant payment process that eliminates any potential risks or liability that tobacco merchants might face otherwise. In the same manner as a web-based transaction, the payment gateway will encrypt the customer account data immediately and send it securely to the payment processor for authorization.

tobacco virtual terminal

Merchants looking to accept payments within their storefront using a virtual terminal can do so by installing a payment card reader into their payment gateway that will allow for transactions to be captured and encrypted in the same format as a transaction originating from a customer web browser, regardless if it is a chip card or swiped transaction. A simple piece of hardware can easily allow merchants to track all transactions in one location, instead of operating 2 separate terminals for online and storefront sales. Sales that come into the business over the phone or by the mail can also be handled through a virtual terminal, utilizing an on-screen function that allows the merchant to use their computer keyboard as a terminal and enter the cardholder’s account information online.

The flexibility of a tobacco virtual terminal can help many different types of businesses in the online tobacco industry with their multiple functions integrated into the program; allowing managers to set up individual employee user accounts with specific job roles, simple transaction management functions along with extensive reporting software to help manage the business.

How does a Virtual Terminal Work?

When a payment card is swiped or dipped into a merchant’s card reader, the customer’s payment card account information is automatically captured by activating the payment gateway and populating the card account fields required by the virtual terminal to start the authorization process.  When a merchant wants to manually enter card account information they can easily open the virtual terminal program, type in the complete account’s card information and begin the authorization process from their computer terminal for card not present transactions.

Once the payment card information has been accepted into the virtual terminal, the card account details are encrypted using the same financial messaging protocol used by the payment gateway and sent to the merchant services network by way of the payment processor and the merchant’s acquiring bank to the payment card association.  Unlike a payment gateway integrated to a merchants website, transactions are not originating from a customers device, eliminating the need to send data from a remote location to the payment gateway.

At the card association, customer account information and transaction details are deciphered, allowing the card network to determine the name of the cardholder’s bank and to send the proper authorization request to the correct issuing bank. Upon receipt of the authorization request, the customer’s card issuing bank will check the information included in the request against the account to ensure that there are no fraud concerns and that the payment can be funded.

Once an answer to the payment authorization has been determined by the cardholder’s bank, a response message is sent back through the card association network to the merchant’s virtual terminal location informing both the merchant and customer as to whether the transaction was approved or denied. Transactions responses will include a response code to inform the customer about the transactions, successful authorizations will have an approval code and authorizations that are declined will have a response code as to the reason why the authorization was not successful.

Types of Merchants using a Tobacco Virtual Terminal

Most businesses that are using a virtual terminal are operating in multiple facets; including an online e-commerce store along with a retail or MOTO business that requires handling customer credit card transactions at the time of the sale. The benefits of having one merchant account for businesses operating in separate areas allows merchants a simplified way to manage their sales and customers while saving money through this streamlined approach.

Some of the most common Tobacco businesses using a Virtual Terminal

  • Vape Shops
  • Smoke Shops
  • Glass Pipe Shops
  • Cigar Shops and Cigar Bars
  • Hookah Shop, Hookah Lounges, and Hookah Bars
  • Tobacco Accessories Businesses

Benefits of a Tobacco Virtual Terminal

Partnering with a tobacco credit card processor offering a virtual terminal can help businesses operating in the high-risk tobacco industry to maintain their merchant services for both their e-commerce store and their retail storefront. Over the last decade, the tobacco industry has witnessed many changes from payment processors and other financial institutions to the increasing government regulations affecting nearly every aspect of the tobacco industry, making the need for tobacco merchants to partner with a reliable payment processor ever so important.

Capabilities of a Tobacco Virtual Terminal

  • Reliable Merchant Service Provider
  • Securely Accept Credit Cards Online or in a Store
  • Decreased Risk of Virtual Terminal being Closed or Turned Off
  • Lower Costs by Combining Merchant Account costs into one Account
  • Easily track and manage all sales from one interface
  • Create customer profiles to speed up future sales
  • Complete reporting and employee management functions

What is Needed for a Virtual Terminal

Tobacco businesses looking to get started processing transactions through a virtual terminal will generally to have some items in place to complete the setup of a tobacco virtual terminal. Having an approved merchant account with the Merchant ID will make the setup process quick and simple along with the hardware, including a computer to access the virtual terminal and for merchants using the virtual terminal in a storefront, having a compliant card reader to plug in.

Recommended items for a Tobacco Virtual Terminal setup

  • Tobacco merchant account MID (Merchant ID)
  • Computer with Virtual Terminal program
  • Card Reader for merchants swiping transactions
  • Business bank account to fund virtual terminal fees (if the terminal is separate from merchant account)

Finding the right Tobacco Virtual Terminal

Tobacco businesses will want to start working with a payment processor that can ensure the merchant account set up for the business is suitable for their needs and the longevity of the business. Having to find a new merchant services provider in the course of running a business can be a costly experience; between loss of sales, integration costs and time spent researching new providers. Below we have a few ideas for merchants to ask their tobacco payment gateway before integrating into their website:

Common questions for a Tobacco Virtual Terminal provider

  • Suitable for Tobacco Products
  • Compatible with Most Shopping Cart Software Programs
  • Functionality to Perform the Tasks required by the Merchant
  • Affordability to fit any Business budget

Merchants with any questions or concerns about a tobacco virtual terminal are welcome to contact our team at Tobacco Merchant Services for more information and answers so merchants can make the most educated decision the first time.


Tobacco Credit Card Machine

As a measure to combat the fraud occurring in storefronts,chip cards has replaced many of the magnetic strip credit and debit cards that have been in use with credit cards since the 1980’s, but thieves have changed their focus and begun concentrating on Card-Not-Present (CNP) transactions as a way to avoid the advanced chip technology.

What is a Credit Card Terminal?

Operating a retail storefront will require merchants to accept payments in a secure manner using a credit card terminal, also known as a credit card machine, or POS (Point-of-Sale) for larger merchants including restaurants and inventory-intensive businesses. Both types of terminals will receive, then encrypt customer payment card account information to begin the transaction of payment authorization and the eventual electronic fund transfer to the merchant bank account by the customer’s card issuing bank. Electronic payments made over the internet to tobacco companies are handled through a payment gateway that is the equivalent to an electronic credit card terminal designed to securely transfer customer card information from an e-wallet or customer web browser to the business merchant account without the potential for theft or fraud while sending between secure networks.

Basic credit card terminals today have the ability to swipe, dip and type in information about the transaction along with the card account information while more advanced terminals can perform additional functions such as accepting e-wallet payments via NFC or a completely automated system that most POS systems offer, allowing touchscreen order and sales management. Depending on the needs of the merchant, and the budget they have to invest, there are a wide variety of credit card terminal solutions to fit their every need, whether it’s online or in a retail storefront environment.

How does a Credit Card Machine work?

Almost identical to the process of which an online sale is processed, a credit card terminal physically accepts the payment card to obtain the cardholder’s account information. Instead of having information sent from a web browser to the payment gateway, or having to input information into a payment gateway, a credit card terminal works direct with the payment networks. The typical process for a credit card machine includes:

  • Acceptance
  • Payment Processor
  • Acquiring Bank
  • Card Association
  • Card Issuing Bank
  • Response

When a customer is ready to checkout, the amount of the transactions is input into the machine and the debit or credit card used to capture account information by either dipping the chip into the reader, swiping the card using the magnetic strip or manually entering the card information with the keyboard. Transactions that are done through an e-wallet or contact-less by tapping a credit card onto the card reader will capture the same information for the transaction. Once the card account information has been securely accepted into the credit card terminal and the amount of the transaction has been confirmed by the customer, the transaction can begin.

Card account information is encrypted in the credit card machine and sent through the payment processor to the merchant acquiring bank where the files are sent to the payment card association. The encrypted data is deciphered at the payment card network to determine the necessary information to complete the payment authorization, including card issuing bank, customer account number, amount of the authorization and security details.

Once the card issuing bank receives the customer authorization request from the payment card association a quick account check along with a security check will allow the card issuer to either approve or deny the customer authorization for payment. Regardless of the decision, the response is sent back through payment card association, merchant acquiring bank and payment processor to the merchant’s credit card terminal where the receipt is printed showing an approval or decline for the payment authorization.

Who needs a Credit Card Machine?

Merchants that are operating a retail storefront and accept customer payments usually offer the services of a credit card terminal to make credit card and debit card transactions quick and seamless. Some of the most common types of tobacco merchants using a credit card terminal include:

  • e Cigarette Stores
  • Cigar Shops
  • Smoke Shops
  • Hookah Shops
  • Vape Shops
  • Head Shops

Benefits of a Credit Card Machine

As the tobacco industry becomes increasingly regulated, many businesses might turn to focus on their retail storefront business instead of selling products online. Having a credit card terminal in a storefront allows merchants the ability to verify customers and decrease the risk of breaking laws when selling tobacco and tobacco accessories.

What a Credit Card Terminal offers:

  • Process Payments inside a Store
  • Small size with Simple Functions
  • Provides printed authorization receipts
  • Easy transaction management through the terminal
  • Works using ethernet and phone lines

Requirements for a Credit Card Machine

Credit card terminals are available from most payment processors; some can require payment while others can be free for signing a contract. Another way merchants can acquire a credit card terminal is by searching online and finding a terminal that is not part of a contract, allowing the merchant to own the equipment outright, preventing many of the high cancellation fees that are prevalent in most contracts.

To use a credit card terminal, merchants will need to apply for and be approved for a business merchant account that will provide a payment processor and merchant acquiring bank relationship, needed to access the various payment card networks.

Tobacco Credit Card Machines need:

  • Tobacco merchant account MID (Merchant ID)
  • Connection to the internet or phone lines

Find a Credit Card Machine

Finding a credit card machine will require merchants to partner with a payment processor that allows the sale of tobacco products and accessories. It is important for tobacco businesses to ask the proper questions in regard to their business before signing a contract; which will save merchants time and money by alleviating any potential problems with the payment processor.

Merchant will want when looking for a Tobacco Credit Card Machine

  • Suitable for Tobacco Products
  • Functionality to Perform the Tasks required by the Merchant
  • Affordability to fit any Business budget

Get Started Today

Whether the business needs a payment gateway, virtual terminal or credit card machine; our representatives will be more than happy to answer any business’s questions or address any concerns about equipment or software used to process tobacco credit cards.

Contact one of our helpful tobacco payment processing representatives to get started accepting payments with a payment gateway, virtual terminal or credit card terminal from Tobacco Merchant Services.

 

tobacco payment gateway