Tobacco Merchant Account | IBS Payment Solutions

A deathly business, tobacco sales have shown no signs of declining even with health professionals and lawmakers ramping up their efforts in the prevention of tobacco sales. Despite the many taboos and legal issues plaguing the industry, tobacco businesses continue to thrive with major profits and increasing sales.

Although the industry’s lose governing laws and subsequent changes in the financial industry surrounding the tobacco market makes it difficult for businesses to find a decent merchant account provider. With credit card processing challenges and increase in scrutiny while applying for a merchant account, obtaining a tobacco merchant account has become one of the expensive parts of running a tobacco business.

Often, Tobacco merchants are forced to pay unfairly high processing fees or look for an offshore credit card processing option because of the complexities involved in setting up a tobacco merchant account.

But the industry growth, as well as rise in credit card payments, showcases the need to offer payment options to its customers in order to stay relevant in the business.

Why is it difficult to obtain a tobacco merchant account?

Strict Government laws and regulations
Age restrictions
Inconsistent and constantly changing rules and policies
Tax issues
Obvious ethical and health concerns
Chargebacks at high rates

Tobacco Merchant Account & Credit Card Processing Solutions

With the anticipation of any future sanctions and increase in government restrictions, tobacco merchants require a reliable merchant account provider offering quality tobacco merchant account solutions with reasonable processing fees limiting the risk of merchants losing their payment solutions in the future.

Additionally, the tobacco industry also expanded and opened up new segments of niche businesses operating within the industry. Hence, growing businesses, as well as related niche merchants, are looking also for merchant account providers that specialize in all types of tobacco sales, whether it be a retail store or online.

If you happen to be a new business operating within the niche tobacco market or even just an existing business looking to expand into an online store, there are several reputable merchant account providers that have a strong understanding and experience working in the tobacco industry that provides transparent fees and customized credit card processing solutions.

Merchant Account Solutions for all types of Tobacco Businesses:

E-Cigarette & Vape Merchant Account
Cigar Credit Card Processing
Merchant Account for Hookah & Related Accessories
Head Shops & Smoke Shops Merchant Account

Obtaining a tobacco merchant account with a specialized processor will help you in avoiding costly fines and will continue to provide high-quality solutions for your business.

The gradual shift towards e-cigarettes and vape in recent times has not affected the tobacco and cigars industry. Despite the health risks involved and smoking being a taboo among some social circles, the percentage of smokers has not seen a major decline.

With the rising tobacco consumption in certain emerging markets, the global tobacco industry is showcasing an increase in revenues and profits. According to reports, the industry generated worldwide revenue of US$11.9 billion in 2017 and is expected to increase to US$13.4 billion by 2021.

Over the last decade or so, health professionals and the government have implemented measures and spread awareness to prevent smoking, yet the industry is going strong as ever. It is safe to say that tobacco & cigar products still have a huge demand and face no threat of going out of business anytime soon.

Although there are restrictions in place to curb the use of tobacco, there is not a single law prohibiting the sale of cigarettes, cigars or tobacco. Yet, the uncertain laws governing tobacco businesses make banks wary of dealing with them & placing them in the high-risk category.

Why is Tobacco considered a High-Risk Industry?

Health Concerns: It is no secret that tobacco used in cigars and cigarettes results in health risks. Lung diseases that include emphysema and chronic bronchitis, Lung Cancer, Heart complications are caused by smoking.

Unpredictable Industry laws: The government continues to introduce tough laws in order to stub out the tobacco industry. The sudden change in rules and regulations does not help merchants either. The murky laws placed on businesses who sell it and the taboo surrounding those who use it raises red flags in the eyes of the merchant account provider and sponsor banks.

High Chargebacks: One of the major reasons tobacco merchants are considered high risk is due to the high amount of chargebacks that occur. Online retailers are more vulnerable to chargebacks than a brick-and-mortar store. Card-not-present transactions, delay in delivery and fraudulent activities causes a surge in chargebacks.

Use High-Risk Merchant Account Solutions for your Cigars & Tobacco Business

Yes, you may face many challenges trying to obtain credit card processing solutions but in order to elevate and expand your business, it is of extreme importance.

Because of stringent industry laws, underwriters will need to examine and ensure that your business is in compliance with the rules and regulations.

Tobacco-related businesses are also known to sell marijuana-related products. In this case, make sure the products are not sold as marijuana paraphernalia while also being transparent about your business nature and the products you sell.

Positive credit card processing history, credit scores and low chargeback ratio will increase your chances of obtaining a high-risk merchant account while approaching a merchant account provider.

High-Risk Merchant Account Providers that specialize in tobacco industry are more likely to understand your business and provide high-risk tobacco merchant account solutions that suit your requirements. This also ensures smooth and fast underwriting process.

Beware of credit card processors offering easy merchant account services. These providers take advantage by charging hidden fees or high processing rates.

Choose the right high-risk merchant account provider and start processing today!

Tag: Tobacco Merchant Account

Tobacco Merchant Account & Credit Card Processing Solutions for the Tobacco Industry

Cigars & Tobacco Business: High Risk Merchant Account Solutions