Tier 1 Quality Cigar Merchant Account
A cigar merchant account is a specialized credit card processing account used by companies that sell cigars, both online and at retail stores.
A cigar payment gateway enables cigar companies to accept credit and debit cards from customers for their purchases of cigars. Various types of businesses in the cigar industry utilize cigar merchant accounts; these include the following:
Cigar Storefront Shops: These retail stores specialize in selling cigars of various types. The objective of these stores is to make a wide range of cigars and related accessories readily available for new and returning customers. In the shop, there can be many rooms. Cigars are placed in racks as per strength—mild, medium, and full. Depending on the choice of strength, customers choose cigars.
Cigar stores also maintain a huge range of accessories including Humidors, guillotine cutters, punch cutters, v-cutters, cigar lighters, ashtrays, Cigar Cases, cigar Rests, Hygrometers, Cigar Books and Magazines, Cigar Apparel, and cigar glue.
To give a great experience to customers, some of these storefronts may also have a patio or lounge area where customers sit with friends and relax for a while and enjoy their favorite cigar. Friends sit together, choose the cigar of their choice, light it, have a good time, and then buy a few more to carry home. These cigar storefronts and lounges use retail credit card terminals to accept credit and debit card payments. Our card terminals are perfect for these upscale establishments.
Online Cigar Retailers: Thousands of companies sell cigars over the internet. These e-commerce sites sell almost everything that a cigar storefront sells. Cigars and accessories are shipped after the orders are received. Many merchants ship to over 100 nations, which is amazing. One thing worth noting is that the cigar community is very strong in Canada, USA, UK, and EU, thus there are so many lounges and storefronts. For instance, London has Edward Sahakian Cigar Shop, Switzerland has Salon du Cigare, and Denver has Churchill Bar.
However, in emerging economies, the community is small, thus finding specialized storefronts and lounges is difficult here; these online retailers work like a charm. They ship cigars to aficionados across the world. That is so amazing. To get this magic done, these retailers use merchant accounts for cigar websites. Our cigar merchant accounts come with the ability to accept credit and debit card payments. Merchants can accept payments in over 50 currencies.
Cigar Manufacturers: These companies manufacture cigars for local and international B2B sales. They do not sell to end-users but instead sell to stockists and wholesalers. These transactions are of high value and generally go through B2B payment solutions.
Due to the impact of cigars on health and various regulatory guidelines, all cigar businesses face serious problems when they need payment processing solutions. Many processors don’t even evaluate the profile of the merchant before saying no. However, there are some acquiring institutions, popularly called high-risk merchant processors, and they are mostly cigar-friendly.
QuadraPay has established robust partner relationships with these cigar merchant account providers, and they are absolutely okay to work with cigar merchants. It is important to note that these processors also have to follow government guidelines and restrictions, thus they cannot support merchants that sell cigar types that have embargo and sanctions. Ask us today for a quote.
Why Cigar Merchant Accounts are High Risk?
Cigar credit card processing is considered high risk for several reasons, with one of the key factors being regulatory challenges. Selling cigars requires merchants to adhere to various guidelines regarding the legal age of purchasers.
Additionally, concerns are always associated with health risks, and many countries have regulations in place to either limit sales or prohibit them entirely. These factors make onboarding cigar merchants for credit card processing a tough process.
The cigar industry experiences slightly higher chargebacks than regular industries. This could be due to the quality of cigars not meeting customer expectations or delays in delivery. Regardless of the cause, payment processors are reluctant to work with merchants who have high chargeback ratios.
There is a significant amount of legal and compliance work involved in processing payments for cigars. Processing companies must ensure that no regulations, laws, or guidelines are violated by the merchant or their business model when onboarding a cigar merchant.
Honestly, this industry is one of the most compliance-oriented, and generic, low-risk merchant account providers often prefer not to work with merchants from the cigar industry. All these factors together contribute to the classification of cigar credit card processing as high risk.
KYC Documents For Cigar Credit Card Processing
Let’s take a look at some of the most important KYC documents that you will need to provide at the time of application.
The Merchant account application form collects an overview of information about your cigar business. You are expected to fill out the form and submit it. This form gathers details about the structure of your company and the ownership of directors. Additionally, the Merchant account application form also covers region-wise sales traffic.
The business registration document can be the company incorporation certificate or any other similar document that confirms the name and address of the business.
The identification proof of all the directors of the company is required to confirm the details of the individuals behind the company.
Additional documents that may be requested include a tobacconist license and registration with the local Public Health Organization.
In addition to the regular KYC documents, cigar merchants are required to provide the following additional documents:
Tobacco CNP Addendum: This is an additional part of the agreement that the merchant has to sign. It outlines special terms and conditions that educate the merchant about risk factors related to cigars, as well as dos and don’ts that the merchant must be aware of.
Proof of inventory, which can be a supplier agreement or inventory sheet.
All merchants that sell cigars must have High-Risk Merchant Registration.
Apart from the aforementioned documents, the payment processing company may ask for additional documents as required to complete the evaluation process.
Rates And Fees Of Cigar Credit Card Processing
There are very few credit card processing companies that are open to onboarding merchants from the cigar sales industry, which is why it is slightly more expensive to process cigar transactions with credit or debit cards. The companies that take the risk of onboarding merchants from such an industry charge a small markup that actually varies based on multiple factors.
The rates and fees for this service are not fixed, and each merchant is offered a custom offer based on the potential risk and expected business. If you wish to get an offer for a cigar merchant account, you can contact QuadraPay today, and we will send you the details.
Application Process For A Cigar Merchant Account
The process of getting a cigar credit card merchant account starts by contacting QuadraPay and letting us know about your requirements. Our team matches your requirements with available payment processors and then lets you know about the required documents. Once you submit these documents, our team engages the underwriting team, and they start the vetting process. The underwriting team can either approve or decline your application. Whatever the case may be, you will be notified about it. Once approved, the team will share login information and integration guides.
Cigar Merchant Processing FAQ
Why Is It Important To Have A Secure Website For Cigar Sales?
A secure website ensures that transaction information is safe, preventing fraudsters from exploiting your website. When choosing an e-commerce platform, it is important for cigar merchants to check if the platform is secure from an e-commerce perspective. There have been instances in the past when fraudsters targeted cigar websites. In one instance, multiple sites were using the same e-commerce platform, all sharing the same IP address. The fraudsters were able to exploit the platform, compromising all the cigar sites hosted on it.
What Is The MCC For Businesses That Sell Cigars?
The MCC 5993 is designated for Cigar Stores and Stands. Merchants classified with this MCC sell various tobacco-related products, including electronic cigarettes, cigars, and pipes.
