Do you own a vape and e-cigarette business? Are you sick and tired of facing the same payment processing problems for years? You’re not alone. A lot of businesses like yours face the same problem. And, while this issue has been around for quite some time, it doesn’t mean there’s no solution. On the contrary, there is a merchant account for vapes and e-cigarettes. Opening one is the answer to all your business prayers.
It’s no secret that the vapes and e-cigarettes market is massive and growing each day. There are thousands of businesses selling these products online and offline. Despite its popularity and size, this market faces a big issue of not accepting credit card payments. And, not being able to offer your customers an option to pay with a credit or a debit card means losing them.
The reason behind this issue is the type of your business. Namely, businesses that sell vapes and e-cigarettes are considered high-risk businesses. This is because:
We are used to blaming the banks and payment processors for not being able to accept credit card payments. But, there’s another side of the story – the banks and payment processors’ side of the story.
Banks and payment processors don’t decline to work with vape and e-cigarette businesses because they like that. On the contrary, they would like to have more clients, but there are several solid reasons why they aren’t.
First and foremost, banks and payment processors find it hard to authenticate the buyer’s age online. Anyone can buy a vape or an e-cigarette using a credit card from an adult (a relative or a friend). They can’t see who is buying it, right? Since the federal law states that only legal age (18 and over) consumers can buy these products, the banks are payment processors can’t take the risk.
Another reason is the great chance of fraud and chargebacks, which banks and payment processors don’t want to deal with. Namely, vape and e-cigarette businesses, especially the small ones, are easy targets for fraudsters because they don’t know which precautions to take against fraud. They either can’t afford proper security measures or aren’t aware of the fragility of their business. Hence, fraudsters target these businesses and steal money from their accounts.
When it comes to chargebacks, banks and payment processors can pull the shortest straw. While paying for chargebacks is not at much of a problem for the merchants, it’s devastating for the credit card issuer from a financial aspect.
And, last but not least, there is a chance of great financial loss if the state suddenly prohibits the selling of vapes and e-cigarettes. Banks and payment processors definitely don’t want to risk everything.
Now, the good news in all your credit card payment issues is that you can accept them. You just need to open a high-risk merchant account.
Before we get to the process of opening a high-risk merchant account for your vape and e-cigarette business, let’s take a closer look at it and its benefits.
As Nerdwallet defines it, a high-risk merchant account is a merchant account given to businesses that are considered to be high-risk, like vape and e-cigarette ones. These accounts are offered by specific payment processors, like WizoPay, specializing in high-risk credit card processing. This account allows you to accept credit cards and debits cards as a payment option just like regular businesses. However, unlike regular bank or credit card processors accounts, high-risk merchant accounts have a high level of security that prevents fraud and lowers the risk of chargebacks.
High-risk merchant accounts work pretty much like regular merchant accounts. Namely, payments are accepted via a virtual credit card terminal or a payment gateway. However, opening one usually requires extra scrutiny, higher fees, and limitations in terms of the number of transactions.
In order to understand what a high-risk merchant account is, let’s compare it to a low-risk (regular) merchant account.
While it all depends on the payment processor, low-risk merchant accounts usually have:
On the other hand, high-risk merchant accounts have:
If you want to run your business safely, you need to open a merchant account for vapes and e-cigarettes. As a holder of a high-risk merchant account, you have to be aware of all the things related to it. Apart from the things mentioned above, such as higher fees, you can also expect:
Opening a merchant account for vapes and e-cigarettes is kind of a must for high-risk businesses like yours. By doing so, you will run your business following all federal laws related to vapes and e-cigarettes. Plus, you will protect your business against fraud and chargebacks.
To open a vape and e-cigarette merchant account, you need to submit the following documentation to your chosen payment processor:
Of course, you always need to follow the instructions given by the payment processor you’ve chosen.
Yes, a high-risk merchant account is pricier and has some limitations. But, opening one is a must when you run a high-risk business like yours. So, get over the cost and constraints and focus on the numerous benefits of having one. Those are:
Apart from these benefits, having a high-risk merchant account also allows you to adapt to any changes in this still-growing industry. You can rest assured your business runs smoothly, following all federal regulations. Plus, it supports your business growth at various levels, including selling locally and internationally and selling different types of vaping and e-cigarette products.
As the number of high-risk businesses grows, so does the number of high-risk payment processors. However, not every payment processor is actually what it says it is.
Many payment processors are in just for the profit without really worrying about their clients. Others promise rainbows and unicorns but you end up in a years-long contract that is devastating for your business. That’s why you need to be very careful when choosing your payment processor.
But, how decide which payment processor is the right for you?
Your merchant account should:
In addition, the payment processor should have the following features:
As you can see there are many things to take into account when choosing your payment processor. So, don’t rush… take your time to do good research on all available payment processors, read their services and conditions carefully, read customers’ reviews, and check if they fit the features mentioned above.
While you are here, take a look at our homepage to read about our services and what we offer. Actually, get a free quote in less than 6 hours… you don’t risk anything!
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