There are a few industries that just never out of the trend and the market.
In particular, cigars have a really long and interesting history. Cigarettes have been around for more than a thousand years and have taken various forms.
And now, in this modern era, cigarettes have taken a new and more innovatice face that the younger generations are getting addicted to. Let us take a deep look into the industry of e-cigarettes and vapes!
E-Cigarette and Vape: What Are They?
E-cigarette, short for electronic cigarette is a device operated by a battery, emitting doses of vaporized solutions, either nicotine or non-nicotine, for the user to inhale. And using an e-cigarette I referred to as vaping.
Vapes are invented for one reason:
To provide cigarette smokers with a much healthier alternative to the carcinogen and tar laden habit of smoking traditional cigarettes.
Studies revealed that the risks of inhaling vaporized syrup after adding nicotine are about 97 percent less dangerous to the user. Meanwhile, the effect on people who inhale its second-hand smoke is rather less harmful than those from every air pollution
Still, there’s still an issue between vaping and cigarettes in those who hate cigarette smoke.
The Vape and E-Cigarette Industry
Growing like weeds, the vaping industry is definitely booming with the number of vapers rapidly increasing from 7 million in the year 2011 to 35 million in the year 2016. A Euromonitor research estimated that the number of adults using e-cigarettes will reach up to 55 million by the year 2021.
And the e-cigarette market shares up to 32 percent of the whole cigarette market. His means that 41 percent of sales are going to the companies which make up at least 1 percent of the total market as a whole with the UK, US and Japan being the biggest markets ever.
And vapers in these 3 countries spent a total of $16.3 billion on vaping products and smokeless tobacco. This only shows that the vaping and e-cigarette market has really grown significantly in the past years, particularly among the younger females.
In the US, from the 45 million smokers, 2.7 million are vapers with only 7 percent of adults tried using a vaping device. Nowadays, there are more than 3,500 retail e-cigarette and vaping shops that exist in the US alone.
In addition, the e-cigarette and vape industry grow up to 25 percent in the year 208, while traditional tobacco cigarettes sales have decreased by 30 percent over the 10 years. E-cigarettes and vaping products are anticipated to exceed tobacco cigarette sales by the year 2026.
However, despite its massive success, most banks and other financial institutions still refuse to recognize its immense profit opportunity and hesitant in providing an e-cigarette merchant account to merchants.
Vape and E-Cig Merchant Accounts
First off, a merchant account is a kind of bank account that allows your business to accept and process payments via credit or debit cards. A merchant, retailer and payment processors make settlement of credit or debit card transactions via an agreement that is finalized by them for a merchant account.
And an e-cig merchant account is a specialized merchant account for merchants selling e-cigarettes and vaping products.
Operating and running a business can be quite difficult. Complying with strict laws and keeping your customers satisfied is already hard. And without a merchant account, your business can go down the drain.
Credit and debit card payment is one of the most common modes of payment in the e-cigarette and vaping industry. And this is particularly important if you only have an e-commerce store. E-cigarette merchants will need to partner with a reliable e-cigarette merchant services provider in order to ensure that their customers can get their purchase without delay as well as timely payments.
The problem, however, is that despite the notable speed of growth of the e-cigarette industry it is still considered as a high-risk venture for most banks and other financial institutions.
E-Cigarette and Vaping Industry: Why It’s Considered High-Risk?
Banks and other financial institutions are wary of businesses that can affect their public image. Unsurprisingly, e-cigarettes and other vaping products are considered to have the same public risks of selling alcohol, firearms and more. This is why most banks tend to avoid e-cigarette merchants.
In addition, since the industry is still young, the uncertainty that comes with it is still a new concept with the government still not having provided some laws to govern and manage how these e-cigarettes and vapes can be sold. Which, in turn, scares most banks and processors.
Furthermore, the very nature of the industry itself is a risk with the FDA regulation making it even more challenging for merchants. It is difficult to predict the future of the vape and e-cigarette industry and to what it may be in the future.
Not only that, the vaping industry also experienced a high level of chargebacks as well as fraudulent transactions. This makes banks and other financial institutions to be even warier in working with e-cigarette merchants.
Factors That Affect The Sale of E-Cigarette and Vaping Products
Because the industry has been labeled as high-risk, merchants will have a hard time getting approved for an electronic cigarette merchant account. Not only that, there are some factors which also affect the sale of vaping products big time!
The new rules that were enacted by the FDA in the year 2016 have made a crucial impact on the payment processing for e-cigarettes and vape products and the kind of products that one can sell as a merchant.
The rule restricts vape companies and manufacturers to change the size of the bottle or the taste of the item they are selling without registering it for FDA approval first. And even if you wish to create a mixture of your own, it is considered as a new product and should be subjected to FDA for approval, a process that can take years and cost up to $1 million.
Another regulation that has put a serious dent in vape and e-cigarette sales is the registration with Visa and MasterCard. Previously, online businesses selling e-cigarette and vaping products were not required to register with MasterCard and Visa or pay an expensive $1,000 yearly fee in order to accept credit and debit card payments.
Now, however, a merchant needs to pay the fee of $1,000 annually which goes to Visa and MasterCard and register their websites in order to sell e-cigarette and vaping products. Meanwhile, some other compliance has also stepped up their game and requires you to get a letter from an attorney which states that your business actually complies with the applicable law of your country such as age verification.
Getting a Merchant Account For Your High-Risk E-Cigarette Business
While most banks consider the vaping industry high-risk without even understanding the industry well and just deny merchants access to reliable payment platforms, there are merchant account providers out there that specialize in high-risk businesses.
And these high-risk ecig merchant account providers provide services that can cater to the needs of their clients as follows:
- Gateway and terminal integration
- E-cigarette credit card processing
- Online and retail vape payment processing
- Vape and e-cig merchant services
- Immediate same or next day funding
- 24/7 based customer support
Things To Consider When Getting a High-Risk E-Cigarette Merchant Services
To find only the best and most reliable e-cigarette merchant account you need to consider a few things in order to evaluate several providers and see if they match your business needs.
- E-Commerce Support
With an online website, you will need a payment gateway that can prove sale transactions online. There is a broad use of virtual terminal that should go with it since it allows you to input card-not-present transactions from an internet-connected device with any web browser.
In addition, card readers which connect to a computer through Bluetooth or USB, enhance the use of a virtual terminal and allows streamlined processing of card-present transactions as well.
- High-Risk Specialization
An experienced and reputable merchant account providers for e-cigarette businesses are those that specialize in the high-risk industry. They should have sale staffs that are experienced and trained in dealing with high-risk merchant accounts like the e-cigarette and vaping industry.
There are 2 kinds of costs in a merchant account— the account fees and the processing fees. The account fee is billed on a yearly or monthly basis, while the processing fee is measured on a per-transaction basis.
It is recommended, however, that you go for an interchange-plus pricing plan, choosing processing rates over the usually more expensive tiered pricing plan. Keep in mind, however, that high-risk businesses may find it difficult to get approved for an interchange-plus s pricing plan.
Most terms of a merchant account contract have been modified in the past years, going towards the benefit of the payment industry like decrease in early termination fees and an automated contract renewal from a 3-year standard agreement. For high-risk merchants, however, they are usually asked to sign-up for the long-term. If you can, consider negotiating with your provider for the contract terms.
- Customer Support
One of the most crucial factors to consider when finding the right e-cigarettes merchant processing provider is good customer support. While most providers offer 24/7 customer support to their clients via phone, emails and live chat, some definitely up their game.
Some providers include self-help resources that act as a medium between the customer and the provider. These are easily available on their website in forms of articles and tutorials which allow the customer to solve simple problems easily.
Choose iPayTotal: Your Number One High-Risk Merchant Account Provider
If you are in the e-cigarette and vaping product selling industry, then you probably have had a hard time obtaining a merchant account. Well, it is time to turn to iPayTotal and make it easier for you.
With iPayTotal, obtaining a merchant account for your high-risk e-cigarette and vaping business has never been this easy. We will help you build and grow your business without limitations and offer you customized payment services that adapt to your client’s needs. We even offer you advanced tools that can help you manage fraud and chargebacks issues with ease.
All you need now is to register with us. Take all the necessary documentation we require, fill up a form, submit and lean back with your arms folded behind your head.
We will take care of the rest and review your application. We will have a better understanding of your business and offer you only the best, customized e-cigarette and vape merchant account services for your business needs.
You will then contact you and disclose a competitive pricing package with contract conditions. You can choose your plan, ask for anything else you want customizes and ask away for anything that you do not understand. We will show you our enthusiasm and help you in any way we can.
Once all is done, we will connect you to one of our most suitable bank partners in order to set up your account. Again, unlike other providers, we will be with you in all the setup process, so you can quickly start accepting credit or debit card payments from your customers and grow your business empire.
You, being the wise entrepreneur to venture into this booming industry, is definitely smart enough to choose the right high-risk merchant account provider. And you should definitely know by now that there’s no better choice than iPayTotal, because, as you should know, we have everything that you are looking for!
So what are you waiting for? Apply now and let’s get this started!