Tobacco Payment Processing

Many businesses operating in the tobacco industry have noticed the increasingly stringent guidelines set forth by many of the payment processors for card-not-present (CNP) transactions. Many of the payment processors that work with general e-commerce companies, including PayPal or Stripe, have prohibited tobacco businesses from selling their products with their payment processing services. While establishing credit card processing services can be a costly process for tobacco businesses, one of the more affordable alternatives for online and card not present tobacco sales has become check processing.

Check processing is one of the oldest forms of payment without physical cash, used by merchants for almost 100 years as a means of accepting payment by customers without the required cash on hand. Today, medium to higher risk merchants have started preferring checks as a method of payment due to their lower transaction fees and overall costs when compared to the services offered by many of the credit card processors. Customers have also adopted e-check and ACH as an acceptable method of payment by many businesses when monthly rebilling or frequent billing is required and automatic check payments are more convenient.

At Tobacco Merchant Services, our payment processing team has over 10 years of experience with a variety of different tobacco payment methods including check processing, ACH processing, wire transfers, and credit card processing services. Our wide offerings of payment processing services along with our large banking network have helped us to become one of the largest tobacco payment processing companies in the industry.

Types of Tobacco Payment Processing available

Tobacco businesses have a number of different types of payment processing services available to both retail and e-commerce merchants. Due to many of the federal regulations and stiff penalties faced by these businesses, not all payment processors or financial institutions are willing to work with the tobacco industry. Some of the most common types of payment processing services currently available include:

Tobacco ACH
Tobacco eCheck
Tobacco Check 21
Tobacco Check 22
Tobacco Credit Card Processing

The various types of check processing services; ACH, eCheck, Check 21 and Check 22 all debit funds directly from the customer’s checking account on file. Though the process of which funds are removed and the rules associated with these payment programs will vary between each other, merchants have realized the benefits of working with the different types of check processing programs. Merchants that accept credit card payments are part of the payment card network including Visa, MasterCard, American Express and Discover. This network is accessed by merchants through acquiring banks that operate on behalf of the different card organizations, requiring merchants to follow their guidelines for payment services.

ACH Processing

Check 21 Processing

Check 22 Processing

eCheck Processing

Differences between Check 21, Check 22 and ACH

Check 21 & Check 22

• Clearing Same or Next Day
• Dispute Need to be a Written Claim
• 40 Day Dispute Window
• No NACHA or Federal Reserve Rules
• The customer creates check with eSignature (Check 22)

eCheck & ACH

• 3-5 Business Days for Clearing
• Disputes filed over the Phone
• 60 Day Dispute Window
• Follows NACHA and Federal Reserve Rules

Types of Tobacco Check Processing Services

Today there are a number of different types of tobacco businesses that are using check processing services to accept payments. While many times check payments are used for reoccurring payments, some merchants and customer prefer to pay using a check instead of a credit or debit card. Some types of tobacco businesses that are currently processing e-check include:

• E-Cigarette
• Smoke Shop
• Hookah Shop
• Loose Tobacco
• Roll Your Own Tobacco
• Vape Shop
• Head Shop
• GlassPipe
• Hemp Oil

Most tobacco businesses that are accepting checks offer a type of membership program that provides monthly products or services to their customers. Merchants that offer one time sales are also able to offer checks as an alternative payment method for both online and in-store sales, giving customers more options for payment.

Get Started

Merchants that have any questions about different types of check processing services are encouraged to contact one of our payment professionals at Tobacco Merchant Services. Our team will be happy to discuss the different options and services available that might best fit the needs of merchant and their customers.