Why vape shops require a high-risk merchant account in order to process credit cards.

The vape and e-cigarette industry has exploded in popularity throughout the world in the past few years, offering entrepreneurs an unparalleled opportunity to provide the alternative to traditional smoking methods that customers are demanding. However, if you are looking to launch your own online or brick-and-mortar store specializing in e-cigarettes, vape pens, juices, cartridges, liquids, and/or drip tips, there is one important aspect of this sector that you may have overlooked. Without it, you will be unable to establish your company or increase traffic and sales.

Accepting customer payments.

Whether you have a physical store, a website, or both, your customers will need to have a way to pay that complies with the credit card industry’s data security standards. In order for this to happen, you need to establish a relationship with a high-risk merchant account provider.

You may be wondering why your shop is automatically placed in the category of “high-risk” businesses. After all, you are selling only legal products and abide by all the regulations pertaining to the industry. The main reasons for this designation include the following.

• The e-cigarette and vaping sector is complex and subject to numerous legal regulations. Therefore, more supervision is required on the part of your account provider to ensure that their risk is minimized.
• The products you sell, while legal, carry elevated health concerns. Conventional lenders are often reluctant to take on the reputational woes of the e-cig and vaping industry.
• Some of the merchandise you sell may not be approved by the FDA.
• This sector has age restrictions that require additional enforcement, which means an elevated risk of noncompliance.

Now that you have a better idea of why your business is considered high-risk, you’re probably wondering how this categorization will affect you.

What to expect from your high-risk merchant account provider.

You may be concerned that your high-risk status will affect your ability to succeed, but never fear. Although you will not be able to apply for a standard payment processing account, there are numerous reputable providers who specialize in this lucrative industry and already have relationships with multiple banks and processors. That being said, this specialization comes at a price. You can expect to undergo more scrutiny during the application process, pay higher per-transaction fees and may be required to sign contracts. You might even have to set up a reserve account that the lender can access should you be unable to keep up with your payments.

Qualities of a high-risk account provider.

Although your vape or e-cig business will not qualify for a so-called conventional merchant account, you will not need to break the bank in order to get the secure payment services you need. Only establish a partnership with a high-risk provider that accomplishes the following.

• Charges reasonable, transparent fees.
• Does not lock you into protracted contracts or exorbitant penalties for early cancellation.
• Integrates with your ecommerce platform.
• Furnishes multiple payment options.
• Has reliable customer service in multiple channels including phone, email, online chat, and user forums to ensure that your business does not experience long downtimes should problems arise.
• Is compliant with all industry and security regulations and has robust anti-fraud measures in place.

If you take the time to do thorough research and demand both affordability and quality now, you can look forward to a productive relationship with your high-risk merchant provider for years to come.