Cigar Merchant Account

Cigar Merchant Account: The Industry Guide.

A cigar merchant account is a specialized high-risk merchant account that allows businesses to legally accept credit card payments for cigar sales. Such accounts are suitable for cigar websites and retail stores. Due to strict regulations and age verification requirements, only specialized high-risk PSPs provide cigar credit card processing accounts. Such providers comply with mandatory compliance and underwriting requirements.

Finding a suitable high risk credit card processing company is not easy because there are very few high-risk processors that work with industries like cigars, tobacco, CBD, and vapes. Merchants may take months to find these providers directly.

The cigar merchant services team at QuadraPay has created this guide. The objective of this guide is to make the search easy for you. In this guide we have discussed why cigar merchant accounts are considered high risk, associated fees, the timeline for approval, and the application process. We are sure that after reading this guide, you will have answers to all possible questions that you may have regarding cigar website merchant accounts. Let’s begin.

Cigar Shop Payment Processing Options (In-Store vs Online)

When it comes to cigar shop payment processing, merchants generally choose either one of the two primary payment solutions; these include in-store point-of-sale systems or online payment gateways. Each of these solutions has its own benefits, and the right solution depends on the exact business model of the merchant. Whether you are operating a physical cigar lounge or you have an e-commerce cigar website, this will decide which is the best option for you.

In-store cigar merchant processing generally involves a physical credit card terminal that supports chip cards, magstripe swipes, and NFC payments like Apple Pay. These terminals are perfect for cigar lounges or shops with foot traffic. On the other hand, online payment gateways allow cigar merchants to accept payments directly on the website using a secure hosted checkout page or API.

We offer hybrid solutions that include virtual terminals for phone orders, countertop point-of-sale systems for walking customers, and online payment gateways for sales on web all of this is offered under one merchant account contract.

Feature	In-Store Cigar POS Terminal	Online Cigar Payment Gateway
Ideal For	Brick-and-mortar cigar shops	Cigar websites and online stores
Age Verification	Manual ID checks at checkout	Integrated DOB field & IP filter
Hardware Required	Yes (terminal device)	No (browser-based system)
Mobile Compatibility	Via portable terminals	Mobile-optimized checkout
Integration Time	5–10 business days	2–4 business days
Refund/Chargeback Handling	Via POS dashboard	Through gateway control panel

Cigar POS Systems and Terminals: What Works Best?

In the world of retail cigar sales, smooth transactions and elegant ambiance are just as important as the quality of the leaf. Whether you operate a walk-in humidor, a cigar lounge, or both, for you, selecting the right cigar shop point-of-sale system is a vital step. This will help ensure compliance, better customer satisfaction, and excellent inventory control.

Modern cigar lounge POS systems must do more than just accept card transactions. The terminals must allow you to manage SKUs, support age verification, track loyalty, and enable tipping or split payments in real time.

That is where QuadraPay steps in. We offer end-to-end solutions integrated with powerful point-of-sale devices. At this time our retail point-of-sale terminals for cigar shops are available in the United States, the United Kingdom, Malta, Australia, and New Zealand.

We partner with top-rated payment processors that provide highly efficient terminals from Valor, Dejavoo, Clover, Pax, Ingenico, and Castles. Whether you are going for a fixed countertop terminal or you need a mobile point of sale device for your lounge seating or cigar events, we have got them all for you.

A well-designed cigar shop POS system should include:

• Barcode scanner compatibility (for both boxes and single cigars)
• SKU-based inventory management
• Integrated age verification at checkout
• Loyalty and rewards program modules
• EMV and NFC payment support
• Tip adjustments and split-bill functionality
• Cloud reporting and remote access dashboard

If you run a hybrid cigar business that means you sell both in-store and online, then you should go for the omnichannel payment solution. It will allow you to automate reporting and avoid overselling, which is especially important when you are dealing with limited-edition cigar boxes.

“The right POS system doesn’t just sell cigars; it enhances the in-store experience.”

POS Terminals We Recommend (Sorted by Date, Newest First)

We believe that cigar shop retail credit card processing should be simple, and that is why we offer terminals that are easy to use and can fit the requirements of different types of cigar retail outlets. You can find these terminals at cigar lounges, mobile events, boutique retailers, and also at your nationwide chains.

Our current Inventory of point-of-sale terminals is listed below. Please note that the Dejavoo, Valor, and Clover terminals are available in the US. Castle and Ingenico terminals are available in the UK and Malta. And we also offer some terminals in Australia and New Zealand.

Whether you are looking forward to setting up a sleek cigar lounge with a mobile POS device or you want to launch your own online subscription service for cigar boxes, QuadraPay can offer excellent solutions to you.

Terminal Name	Brand	Type	Key Features
Dejavoo P5 Android mPOS Terminal	Dejavoo	Mobile	Android OS, portable, EMV, touchscreen
Dejavoo P3 Android POS Terminal	Dejavoo	Desktop	Android, larger screen, tip function
Castles Saturn 1000	Castles	Mobile	Contactless, EMV, compact build
Castle Vega 3000C	Castles	Desktop	PCI-certified, high-speed processor
Ingenico Move/5000	Ingenico	Mobile	4G, Wi-Fi, NFC, long battery life
Clover Flex 2	Clover	Hybrid	Full-scale POS, tip adjustment, portable
Valor VL550	Valor	Desktop	Smart tipping, receipt printing
Valor VP550E	Valor	Mobile	Compact, Wi-Fi capable, e-receipts
Valor RCKT	Valor	Mobile	Android-based, digital signature
Dejavoo QD5, QD4, QD2	Dejavoo	Desktop	Compact, customizable, EMV-ready
Dejavoo Z Series (Z3, Z6, Z8, Z9, Z11)	Dejavoo	Range	Varying form factors, Wi-Fi, NFC

Do you want to impress lounge patrons with super sleek mobile terminals, or do you want to manage complex SKUs across different franchises? QuadraPay can recommend you options for every setup, most of the time pre-configured and plug-and-play ready.

Why Are Cigar Merchant Accounts High Risk?

Cigar credit card processing is considered high risk by acquiring banks because of several reasons. It will not be wrong to say that at this point in time, onboarding cigar merchants can be one of the most complex assignments for credit card processors. Let’s explore the key reasons.

Regulatory Challenges

Selling cigars, tobacco, and related products (paraphernalia) is a highly regulated activity. Merchants must adhere to various health and age related guidelines. It is mandatory for cigar shops and websites to display disclaimers and checks to ensure that the product is not available to the underage population.

Another mandatory requirement is ensuring health related compliances. Such as putting warning notices regarding the ill effects of nicotine on health. Not adhering to these regulatory guidelines and compliances can result in permanent closure of the merchant accounts and may also impact the payment processor.

Fraud & Reputation Risks

Cigar is a premium product and can be easily sold at secondhand markets. This is why many fraudsters may try to place orders online using stolen credit cards. A high fraud ratio can attract huge credit risk for processors. Some banks prefer to stay away from the cigar business because of the social stigma and reputational risk.

High Chargebacks

The cigar industry experiences slightly higher chargebacks than regular industries. This can be because of the quality of cigars not meeting customer expectations. It may also be because of delays in delivery. Merchant service providers avoid working in industries that can attract high chargebacks.

Complex Compliance

The cigar industry is highly compliance-oriented. Low-risk merchant account providers often avoid the cigar industry. All these factors contribute to the classification of cigar credit card processing as high risk.

Apply for a high-risk merchant account accepted worldwide

Did You Know?

Over 30% of cigar businesses face payment processing challenges, leading to lost sales and operational delays.

Top Challenges in Cigar Website Merchant Account Approval

Launching a Cigar website is a bold move, but getting approved for a cigar website merchant account is not always the easiest thing you can imagine. This is because cigars are regulated and age-restricted products most payment processes examine your website with great scrutiny, and some may outright decline the application.

The biggest challenge is compliance readiness. Your cigar website must have an age verification system, such as a tool that verifies the date of birth of the individual when they access the website or a system to upload the photo ID at the time of entry on site. The checkout process on your website must be secure with SSL encryption. Remember, if your site lacks legal disclaimers, a return policy, a shipping policy, and a privacy policy, then the underwriters will definitely flag your application.

Another challenge with cigar websites is the wrong marketing approach. You should stay away from any suggestive language that increases reputational or legal risk for the acquiring banks. Make sure that on your website you mention clear delivery timelines, shipping restrictions, and return terms for tobacco products.

Common Roadblocks in Cigar Website Merchant Approval

Issue Detected by Underwriters	Impact on Application	Recommended Fix
No Age Gate on Homepage	Declined due to compliance risk	Add DOB gate or ID verification
Missing Terms or Policies	Low trust score from processor	Add refund, privacy, and T&C pages
No SSL Certificate (HTTPS)	Application auto-rejected	Install HTTPS immediately
Health Claims in Product Listings	Risk of legal violations	Remove or reword any health claims
No Product Disclaimers	Higher chargeback risk	Add warnings per local regulations
Missing Tobacconist License	Rejected for non-compliance with local laws	Obtain and upload a valid tobacconist license
Missing Public Health Licence	Fails regional compliance checks	Acquire and display a valid public health license

We offer a chargeback alert system that will notify you in near-real time about disputes so that you can issue refunds before the dispute becomes irreversible.

“A strong chargeback strategy today protects your business tomorrow.”

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 basic details of your cigar business. On this form you will share details about the structure of your company, ownership, sales traffic, expected volume, desired payment instruments, and previous processing experience.

Along with the application, you will also have to share personal and business documents for verification.

For the business registration proof, you can submit the incorporation certificate or any other similar document.

For the photo ID, you can submit the passport or driver’s license of directors.

Additional documents that may be requested include a tobacconist license/registration with the local Public Health Organization or any other documents that may be mandatory for operations at the time of application.

Tobacco CNP Addendum: In addition to the merchant account application, cigar businesses are sometimes asked to fill in a tobacco CNP addendum. It is an additional part of the agreement. It outlines special terms and conditions that educate the merchant about risk factors as well as dos and don’ts that the merchant must be aware of.

All merchants that sell cigars must undergo high-risk registration. This means the merchant will have to commit to paying a fixed fee per year for each card brand they wish to process.

Apart from the above-mentioned documents, the payment processing company may ask for more documents as required to complete the underwriting review.

Best Practices for Reducing Chargebacks in the Cigar Industry

Chargebacks are the biggest threats for any cigar merchant account, no matter which payment processor you get it from. Since cigars are considered high-value, age-restricted products, issues such as delivery delays, misunderstood product quality, or underage misuse can result in disputes and chargebacks. Remember, if your overall chargeback ratio reaches close to 1%, then it may lead to higher processing fees, account hold, or even termination.

To keep your cigar credit card processing account in good standing, it is important for you to have a proactive chargeback management strategy in place. You can start by offering accurate product descriptions, uploading real photos of cigars, and including tasting notes, ring gauge, and strength level.

Also ensure that you are transparent with the refund and return policy; this will help your customers to set the right expectation.

Another good strategy is to offer signature-required shipping. The approach ensures that the proof of delivery is collected at the time of item delivery. This proof of delivery will deter unauthorized claims. To stay safe, you should also use age verification at checkout and display mandatory disclaimers prominently.

Proven Chargeback Reduction Strategies for Cigar Sellers

Risk Trigger	Preventive Strategy
Product Not as Described	Use detailed images, flavor profiles, and specs
Item Not Received	Provide real-time shipping & require signatures
Fraudulent Use by Minors	Add DOB input + third-party ID verification
Long Shipping Times	Display estimated delivery & carrier info
Refund Misunderstanding	Clear refund/cancellation policy on checkout page

Cigar Credit Card Processing Rates & Fees

There are very few credit card processing companies that onboard cigar merchants. Since the demand for such providers is higher, the pricing is slightly elevated in comparison to regular low-risk accounts.

The actual rate can only be provided after a full evaluation of the merchant’s risk profile. However, it will be great if you know about some mandatory fees that you will have to pay for using a cigar website merchant account.

Transaction fee. On every transaction, the merchant pays a fixed percentage. This is also called MDR or sometimes TDR. The processor may charge you a fixed fee or an interchange plus fee. In a fixed fee model you pay a fixed percent irrespective of card type. However, in the interchange model, you pay different fees as per card type. The interchange model is preferred by large cigar merchants. While startups and low-volume merchants prefer fixed rates.

Monthly Fee. The processor will charge a monthly fixed fee. Consider this as a monthly maintenance or usage fee for the payment gateway. Usually this is under $50.

Chargeback Fee/Refund Fees. For refunds and chargebacks, you pay a fee. This ranges from $10 to $50.

Cigar Merchant Services: What’s Included in a Full-Service Account?

A full-service cigar merchant account that you get from QuadraPay partners will give your business far more than just the ability to accept credit and debit card payments. It will allow you access to a complete suite of high-risk merchant services that are designed for cigar retailers and websites.

Cigar merchant services generally include a virtual terminal for phone orders and an online payment gateway, as well as support for mobile credit card readers or countertop point-of-sale devices. You will also get a chargeback protection mechanism that will help you to keep your chargeback ratio under control.

Whether you operate a Cigar lounge, kiosk, or an online shop, these tools will help you optimize your business operation, improve customer satisfaction, and reduce the risk exposure to your payment solution.

Features Included in Full-Service Cigar Merchant Services

Component	Description
Online Payment Gateway	Secure checkout, fraud filters, AVS, 3D Secure enabled
Virtual Terminal	Browser-based tool to accept MOTO/phone orders
POS System Integration	Compatible with top brands like Clover and Dejavoo
PCI Compliance Support	Assistance with meeting security certification standards
Recurring Billing Tools	Ideal for cigar clubs & subscription models
Multi-Currency Support	Accept USD, EUR, GBP and more

We understand that every merchant has unique needs. That is why we help match your cigar business with a high-risk processor that supports your vertical, your country, and your monthly volume.

Cigar Merchant Account Application Process

The application process for a cigar credit card processing account is fairly simple if you get hold of the right processor. It starts with a pre-application, where you submit basic details like your name, email, and website. These details are reviewed by the merchant service providers, and they contact you for additional details.

Next you send a merchant account application with the copies of the KYC documents. The underwriters review the KYC documents. They can either approve or decline your application. Whatever the case may be, you will be notified. Once approved, the team will share login information and an integration guide.

If you apply for a retail cigar shop payment terminal, then the device will be shipped to your business address. If you apply for an online credit card processing account, then you will get API information and a ready-to-use plugin.

Throughout the process, the technical team of the processing company will be in touch with you and will provide assistance. After integration you will make some test transactions using test card details. After successful test transactions, the merchant processor will switch your account to live mode.

Comparison: Cigar Merchant Account vs. General Tobacco Merchant Account

Cigars are often placed in a broader category with tobacco, but processors differentiate cigar merchant accounts from general tobacco merchant accounts. This distinction matters when it comes to risk, underwriting, compliance, and pricing.

Cigar merchants typically involve high ticket value and slow usage, and they target a more niche customer base. In contrast, general tobacco merchant accounts may include products like vapes, nicotine pouches, cigarettes, and accessories, which are governed by different health and advertising rules.

Cigar transactions typically involve higher ticket values, slower usage rates, and a more niche customer base. In contrast, general tobacco accounts may include products like cigarettes, e-liquids, chewing tobacco, nicotine gum, tobaccoless pouches, and vapes, which are governed by different health and advertising rules.

Understand the differences, and you can ensure that your processor is experienced, especially with cigars and not just with generic tobacco.

Cigar vs Tobacco Merchant Accounts

Factor	Cigar Merchant Account	General Tobacco Account
Product Type	Hand-rolled cigars, humidors	Cigarettes, vapes, chew, rolling papers
Ticket Size	Medium to high ($15–$100+)	Low to medium ($5–$25)
Chargeback Rate	Moderate	High (especially with vapes)
Ad & Labeling Compliance	Strict but lifestyle-oriented	Stricter, especially for flavored items
Ideal Setup	Online stores, cigar lounges	Kiosks, smoke shops, vape retailers

If your catalog includes both cigars and tobacco products, then we can help you structure your application in a way so that it reflects the true risk profile of your business this way you merchant account will get the most appropriate merchant classification code (MCC).

Supported Countries for Cigar Payment Processing

Cigar sellers often wonder whether they can get approved for a payment processing account in the specific country or not. At QuadraPay we support cigar merchants in over 20 countries. We do it in association with strong acquiring partners in North America, Europe, and oceania

The key to success basically lies in ensuring that your business meets local tobacco compliance laws and age verification requirements. For example, merchants in the USA must hold valid tobacco licenses and are often required to comply with FDA mandates. In the European Union, sellers must follow the tobacco products directive (TPD). While in the UK strict labeling and promotional limitations requirements must be met. The regulations vary based on jurisdiction and type of product being sold.

Cigar Shop Merchant Services FAQ

What Is the MCC for Cigar Businesses?

The MCC 5993 is for cigar stores and stands. Merchants classified with this MCC sell various tobacco-related products, including vapes, cigars, and pipes.

What Are Good POS Systems for Cigar Lounges?

There are many, but you can explore Toast, Clover, and SkyTab.

How to Integrate Cigar Payment Gateways on Popular Platforms

Integrating the cigar merchant account on your e-commerce platform is the final and most crucial step. Whether you are using Shopify, WooCommerce, Magento, or OpenCart, or you have a custom site built on PHP or ASP QuadraPay partners can offer easy integration.

• API integration for custom platforms
• Hosted payment pages (HPP) that require no development
• Plug-and-play gateway modules for major platforms

For Shopify, if we don’t have direct integration in your geo, we can recommend external software like Checkout Champ that can help with smooth integration.

https://help.shopify.com/en/manual/payments/third-party-providers

Our team will provide you full integration assistance, including test mode walkthrough, sandboxing, and live activation guidance.