Tobacco Merchant Processing – What you Need to Know
Trading in tobacco is very lucrative, yet heavily regulated. Merchant providers processing high-risk online payments consider tobacco to be high risk due to government and banking restrictions. The few payment service providers that approve high-risk tobacco merchant processing do so willingly, but it will cost you.
Most businesses in the industry try to use different approaches to survive, including completely foregoing credit card payments and accepting high-risk eChecks as an alternative. At SecureGlobalPay, we understand the challenges you may encounter and we have solutions for you.
Merchant Account Processing
It is critical that we all have an understanding of what high-risk tobacco merchant account processing means. A merchant is an account that makes it possible for businesses to accept customer payments via credit and debit cards. As you may be aware, these payment cards are routed through payment networks like Visa, Mastercard, American Express, and Discover.
Visa and Mastercard are the most widely accepted cards, both domestically (in the U.S.) and abroad, and internationally.
The Tobacco Industry
The tobacco industry is made of a variety of products that are principally made from tobacco. Globally, tobacco payment services and sales account for an enormous $750 billion industry, with 20% of the global adult population actively using tobacco products. The industry encompasses numerous products that are not illegal but nonetheless face restrictions.
Tobacco Restrictions and Payment Processing Challenges
The use of tobacco products is linked to various health problems, which attracts campaigns against their use. The ongoing control of online sales of tobacco products seeks to stop the following:
- Unrestricted sales to minors
- Tax avoidance
- Undeterred normalization of tobacco products
- Uncontrolled marketing, advertising, and promotion.
Some of the core products you may transact with your tobacco merchant processing account include the following:
- Cigarettes: The sale of cigarettes online is strictly monitored in the US. The Prevent All Cigarette Trafficking Act (PACT) requires all merchants selling cigarettes to register with the federal and state tax offices. The Act also requires merchants to file monthly reports on cigarette shipments.
- Smokeless: These are tobacco products that are basically chewed, snuffed, or dipped. Just like cigarettes, smokeless tobacco products are heavily restricted under the PACT Act. Federal laws make it difficult to accept card-not-present (CNP) transactions on smokeless tobacco products.
- Cigars: A rolling of dried and fermented tobacco product that is intended for smoking. Cigars are not included in the PACT Act, which makes it a bit easier to sell them online.
- e Juices: Can also be referred to as e-cigarettes. e juices have continued to face increased FDA regulations, making it hard for businesses to find merchant processing services. Businesses with the CNP model face greater difficulties.
- Shisha (Hookah): Refers to the smoking of tobacco in vapor form through a water pipe (shisha). The use of Shisha is growing rapidly in the US.
A particular downside associated with the regulations of high-risk tobacco payment processing is the increased merchant fees. In some cases, the high-risk merchant account tobacco fees may have a significant impact on the costs of your tobacco business.
We have a Solution: You Can Start Accepting Card Payments Today!
Your key concern is to ensure that your business thrives, regardless of the challenges with payment processing. Please understand that forgoing credit card processing cannot be an option since it will eliminate most of your potential customers. SecureGlobalPay merchant services provide payment processing solutions dedicated to the needs of high-risk and hard-to-place merchant accounts. Accept tobacco payments via a virtual terminal, payment gateway, point of sale, or via a mobile app.
SecureGlobalPay has made it possible for businesses with high-risk merchant accounts to accept payments of all types. We have developed the necessary infrastructure to streamline tobacco merchant processing services. You will be able to accept credit card payments regardless of the specific tobacco product you sell.
Some of the features and benefits you stand to achieve with a SecureGlobalPay online tobacco merchant services payment processing account include the following:
- Increased freedom for your online payment acceptance
- Speedy multi-currency processing
- Mobile payment processing
- Retail payment processing
- Secure mail and phone order processing
- Intelligent transaction and payment gateway routing for faster processing
- Partnerships with banks and regulatory bodies
- Access to lower rates
- Staying compliant
We are sure that opening an account with us will bring you success. You do not have to go through confusion, lost business, and rigorous underwriting because your payment processor has shut you down. Apply today and accept online card payments for your tobacco products.