Cannabis and many other recreational drugs have been in use for decades, but recently the production and demand for such products have skyrocketed. Many countries have even legalized the use of recreational Cannabis and hemp. The rise in use of cannabis-related products has also led to an increase in smoke shops and merchants selling drug paraphernalia.
Setting up a legal store selling cannabis products is really difficult. Still, even if you don’t sell tobacco or THC products, it is a hard task opening a drug paraphernalia store and getting a merchant account for transactions.
Smoke shops selling tobacco accessories, vapes, bongs, hookahs, rolling paper, roach clips, grinders, etc., are targeted by multiple laws and regulations by the Government. Most payment processors have high requirements to open a paraphernalia merchant account or have stopped working with the industry because of high risks and legal troubles.
For drug paraphernalia merchants and other high-risk industries, it is important to partner with a reliable high-risk merchant account provider like Wizopay and do business safely. We will take an in-depth look at everything related to paraphernalia merchant accounts and how to open one with a trustworthy payment processor.
What is a Paraphernalia Merchant Account?
Land-based smoke shops and drug paraphernalia retail stores are viewed negatively by the public but are still in operation. However, in recent years, customers have shifted to online shopping, and this has led to paraphernalia merchants going online too. These merchants face many issues for payment processing and card-not-present transactions because banks and top credit card providers deem their business high-risk and don’t work with them.
Online paraphernalia store owners have to find a payment provider who offers merchant account services specially designed for online paraphernalia, smoke, and head shops. Such paraphernalia merchant account providers follow all Government guidelines and laws but charge more than traditional providers because of the high-risk involved. They offer high security at affordable fees and reduce the risk of fraud and chargebacks.
When a store owner opens a paraphernalia merchant account, he can accept payments from top credit cards like Visa, Mastercard, etc. The payment provider handles this account and even provides a report of all transactions and data. Both card-not-present and point-of-sale payments can be accepted through this account. All software and hardware needed for payment processing are given, and a secure link is set up between the online store and the provider for transactions.
Businesses that Require a Paraphernalia Merchant Account
Even if smoke shop merchants do not sell banned drugs, Cannabis, or tobacco products, most other accessories and related products are considered high risk by payment services and banks. Shops selling rolling paper, incense, cigar cutters, detox, roach clips, grinders, rolling machines, and other accessories used to smoke marijuana fall under this category.
Stores that sell smoking devices like hookahs, hydroponic flasks, water bubblers, etc., need a merchant account too. Water pipes and bongs are used a lot because of their durability and ability to withstand constant heat. Made of plastic or glass, water filters the smoke of heavy particles, and the experience of smoking is made better.
Tobacco and cannabis users also buy glass pipes and bowls for smoking. Drug paraphernalia stores have a variety of glass devices in various shapes and sizes. All smoke shops that sell any of the above products and accessories face payment issues and should open a high-risk merchant account.
Some payment processors like Stripe or PayPal open paraphernalia merchant accounts, but there are a lot of risks and issues involved. They may terminate your account and deny services anytime. Smoke shops can apply for a merchant account in the following situations also:
Issues Faced by Smoke Shops and Paraphernalia Merchants in Payment Processing
The Government has never been kind to any merchant dealing drugs or related products. The same goes for paraphernalia stores that face a hard time finding a good payment processor. Here are some of these issues:
An experienced payment processor will help merchants follow all rules and regulations. Merchants can avoid high compliance fines and overcome the above issues through a high-risk merchant account.
Documents and Requirements for a Paraphernalia Merchant Account
Paraphernalia merchants need to have the required documents for verification when they apply for a merchant account. Underwriting is really important for this industry, and the merchant needs to provide them with the right supporting documentation.
When a merchant offers a fully complete application, it will increase the speed with which underwriters review it. In some situations, an underwriter may reject an incomplete application as he may think some documents are being held back on purpose.
A color ID is a must, along with a Government ID copy, because underwriters need a photo ID while completing their KYC process.
The voided cheque makes sure that the account is set up properly, and any transactions and payouts will be not be delayed. Also, banking details should be filled in correctly.
Previous account statements help the payment provider understand the business, sales volume and know about previous chargebacks. This is important so that there are no surprises after the paraphernalia merchant account is open.
After the submission of these documents, an underwriter may grant conditional approval to an account. Some additional requirements are as follows:
There are strict guidelines for smoke shop owners, and payment providers need to ensure that the online stores are fully compliant. This may require making changes to the business.
Pictures of the inventory make sure that no illegal or banned product is being sold at the store.
Order verification makes sure that a customer placed an order and received it. This helps reduce fraud.
The verification process is done to ensure smooth transactions and improve the longevity of a paraphernalia merchant account.
Paraphernalia Merchant Account Services
Both land-based smoke stores, online merchants, and shopping carts can avail merchant account services from a recognized provider.
Benefits of a Paraphernalia Merchant Account
These are the benefits of a high-risk merchant account:
How to open a Paraphernalia Merchant Account?
Once you have the necessary documents needed for applying for a paraphernalia merchant account, you can proceed with the following steps:
Once your merchant account is approved, you can start accepting payments.
Open Your Paraphernalia Merchant Account with Wizopay Now
Do you run a drug paraphernalia business and cannot find a good payment provider for your online store? Wizopay is one of the most trusted names when it comes to providing payment solutions to the smoke accessories and drug paraphernalia industry. You will get the best services at affordable prices at Wizopay.
Once you open a merchant account at Wizopay, you will have access to the Secure Merchant Portal. Access your account anytime through this portal.
Wizopay understands the risks associated with the paraphernalia industry, and the services are tailormade to suit their needs.
The public has always had a negative perception of drugs and illegal substances. This has led to a lot of problems for online paraphernalia merchants for payment processing. Most payment providers reject smoke shop merchants, and the demand for special payment providers for the industry is high.
We discussed everything related to a paraphernalia merchant account above and the issues faced by the industry. Before opening an account, you must have the necessary documents. Once your account is approved, you can receive transactions safely.
Reliable providers like Wizopay offer round-the-clock support and reduce the risk of fraud. Get in touch with an expert soon and open a merchant account for improved sales and comfortable credit card payment processing.