Vape & E-Cigarette Merchant Accounts:Insiders Guide
A vape merchant account is a specialized credit card processing account designed for companies that sell vaping products and related items. With a vape payment gateway, merchants can accept credit and debit card payments for the sale of vape devices such as vape pens, pod systems, batteries, heating elements (coils), containers, and mods.
As per a report published by Global Information Inc. (Source), the international vape and e-cigarette industry can reach a size of USD 247.13 billion by the year 2030, with a CAGR of 32.72%.The market shows enormous potential for all types of players, such as e-commerce sites, retail vape shops, wholesalers, and manufacturers.
However, recently, the vape industry has hit a major roadblock. Now, due to newer government regulations and card company guidelines, it has become extremely tough to onboard merchants from the vape industry for card processing. Most banks have started considering vape to be a high-risk industry.
However, there are still various specialized vape merchant services companies that are able to support merchants with credit card processing. As a seasoned merchant services reseller company, QuadraPay has been assisting vape retailers, e-tailers, wholesalers, and manufacturers. We have established partnerships with various vape-friendly payment processors. You can apply with QuadraPay to get stable vape credit card processing solutions.
Top Reasons That Make Vape Payment Processing High Risk
Vape activists claim that vapes are less harmful than cigars and tobacco, but many governments are not convinced. Consequently, many of these nations have either imposed a complete or partial ban on selling vapes. This ambiguity makes underwriting vape merchant accounts extremely difficult, time-consuming, and risky. Underwriters must ensure that the merchant is approved after checking all the relevant laws and guidelines for all the nations where the merchant wishes to sell vapes.
The industry has recently encountered issues linked to high chargebacks and return ratios. Chargebacks occur when a customer receives a defective product or does not receive the product at all. Sometimes customers also raise chargebacks when the product does not match what the seller claimed.
Vape merchants are generally targeted by fraudsters who place orders using stolen cards. They receive the product in 2-3 days, but when the cardholder receives the statement, chargebacks occur.
To overcome these challenges, it is crucial for you to promptly partner with QuadraPay, a leader in providing high-risk merchant processing solutions. QuadraPay knows the vape industry better than many providers.
Multiple Vape Merchant Processing Solutions By QuadraPay
The Vape E-commerce Payment Gateway is for websites. This payment gateway performs the same function online as a payment terminal does in a vape shop. When customers add vape products to their website cart and proceed to checkout, the vape payment gateway processes the entire transaction by interacting with various parties such as the merchant acquirer, card scheme, and card issuer. Merchants using the vape payment gateway must implement an age verification feature on their website to comply with legal requirements.
A Vape Shop Credit Card Processing Terminal is a card processing machine used at retail vape shops. These terminals can accept credit, debit, and QR code payments. Our terminals are brand new and can be easily connected to POS systems. We offer various types of Vape shop credit card terminals, including countertop terminals, wireless terminals, and mobile card readers.
B2B Credit Card Processing for Vape Manufacturers is for processing high-volume transactions. This solution is used by vape manufacturers to accept credit card payments from other businesses, such as distributors, retailers, and suppliers.
Payment Processing for Vape Wholesalers is a perfect fit for companies that sell vape products in bulk but are not manufacturers of these products. A vape wholesaler can also be a retailer. However, for wholesale orders, the company may offer volume discounts and invoicing payment links.
Each of these listed payment solutions is for different types of companies that are part of the global vape sales industry. Our solutions are a great fit for any vape payment processing requirements, including B2B to B2C transactions.
KYC requirements for vape merchant account
The KYC requirements for vape merchant accounts are stringent due to health risks and regulatory guidelines. Here is a general list of documents required to apply for a vape merchant account:
Merchant account application form: This document provides primary details about the company, its financial strength, and its owners.
Business registration certificate: Confirms the legal status of the vape company. A merchant can submit the certificate of incorporation or any similar documents issued by the company registry.
Voided check: Helps the bank ensure that the merchant has a valid bank account under the applied company’s name.
Driver’s license: A photo identification document. This helps underwriters identify the real person who will be accountable for all account activities.
Card Present Addendum: This document outlines various measures and additional terms that a vape merchant must accept to get approval for the merchant account. It covers procedures for Card Not Present (CNP) transactions, processing restrictions, delegation of duties, suspension terms, and early termination fees.
Proof of inventory: Assures underwriters that the merchant has enough stock to fulfill orders.
Bank statement and processing history: Show the current and past financial strength of the company. Based on these, underwriters can calculate the future potential of the merchant.
Utility bill: Confirms the address of directors and the company.
Fees for Vape merchant account
The rates and fees for a vape merchant account depend on many factors. These include the processor, monthly volume, type of business, risk level, type of cards to be used, and value-added services. Let’s see these in detail.
Setup/Application Fee is charged at the time of account approval. Please note that sometimes, simply by negotiating with the payment processor, merchants can get a full waiver of the setup fee.
Discount rate is paid on each transaction. It is generally between 0.99% to 3%.
Chargeback Fees are applicable when the merchant loses a chargeback case.
Rolling Reserve is a security deposit. It is a fixed percentage of each order. Generally, the rolling reserve is 5-10%.
