If you run an online cigar business in the UK (MCC 5993), then you must know that you are operating in an extremely regulated high-risk category. This means that getting approval of a merchant account is only half the battle, and staying active in business is everything. High-risk PSPs that support tobacco, cigars, nicotine products, and vapes/CBD are the best places to get reliable accounts that stay active for the long term.
You should avoid looking to sign up with aggregators that support every type of merchant and offer a fixed rate to everyone and set up accounts in 1-2 days. As an experienced reseller working with UK and EU based cigar merchants, we can recommend that you should look for providers that have direct acquiring relationships with UK/EU banks. This way you will get a dedicated cigar merchant account in The UK. Also, you must make sure that the PSP underwrites your actual business model (inventory vs. dropshipping), your past processing history, and your commitment to follow the rules and compliances.
Remember the UK Cigar merchant Account approval strength mainly depends on three simple things.
1: A documented processing history. Ideally you should have 3-6 months of processing history. If you don’t have card processing history, then you may share history for alternative solutions or even a bank statement. Basically, when you share history, the PSP knows that your business is active, and they also get to see your chargeback and refund percentage. Merchants with history have better approval chances than startups. They may also get better rates than startups, so if you have history, don’t hide it. Remember, even if you hide, underwriters can know your previous processing overview. And when they know you are hiding it, then consider your application declined.
2: Proper licensing (tobacconist compliance/Health Related Licenses) and 3: strong age verification and shipping controls. PSPs expect very strict compliance with policies that limit the sale of certain goods to certain age groups (applicable to industries like Tobacco, cigars, vapes, CBD, Adult and a few more). Your checkout process, KYC, and delivery restrictions must be foolproof.
Industry Insight: The 2 main reasons for accounts getting shut down after scaling are weak compliance and a high chargeback ratio.
Lastly I would like to mention that you should never depend on just one processor. The most resilient cigar shops in the UK and EU all use multi-PSP or multi-MID setups. This helps efficiently to lower their risk of becoming totally dependent on one acquirer and keep things running smoothly if one acquirer tightens exposure and pulls the plug. Add smart routing, fraud tools, and clear descriptor management to your site and merchant account; it can really help you operate with unnecessary stress.
Remember that to build a stable, scalable, high-risk payments stack for your cigar business in UK you must think about long-term survival instead of short-term approvals.
Note: Your PSP will let you know from from which nations you can accept transactions. No PSP can open 100% global traffic. Transactions from various countries are not supported because of various international rules and regulations. The product range may also limit your access to various Geos. Ask you PSP about what all geo’s they can support for your business model and product range.
All the best.