It is no secret that the tobacco industry is treated as a pariah by government and health officials alike for selling a deadly product. Despite the many efforts taken in order to curb the use and sale of tobacco products, the industry has only seen enormous profits in recent years. With its highly diversified portfolio of products, tobacco is claimed be one of the most profitable industries in the world. Reports suggest the industry generated worldwide revenue of US$11.9 billion in 2017 and is expected to increase to US$13.4 billion by 2021. New developments suggesting big tobacco firms buying stakes and expanding into the cannabis industry will only help further its growth. Safe to say, tobacco products have a demand and have shown no signs of going out of business any time soon. Although the industry may be plagued with various restrictions and strict laws, selling tobacco and related products is not prohibited and is still very much legal.
The ultra competitive nature of the industry means businesses have to step up in order to survive in the longer run. One of the ways is to follow consumer trends with credit card payments being a rapidly growing customer requirement. Retail stores, smoke bars, kiosks or online shops, regardless of the type of tobacco business you operate, you will need tobacco merchant account solutions to offer credit card processing and other payment options. They not only present a choice to consumers but also help you run a smooth and cost efficient business. But obtaining merchant account solutions for tobacco business is not easy. The uncertainty surrounding the industry has led to banks and financial institutions reluctant in engaging with and offering services to tobacco merchants.
If you walk into a bank and ask for merchant account solutions for your tobacco business, chances are you will be turned down. The reason being, tobacco industry is tagged as high risk. As with other high risk businesses, obtaining a merchant account becomes difficult due to various reasons such as business nature, strict regulations, high chargebacks, etc. Uncertain Laws and Regulations governing the industry The obvious ethical and health concerns related to the tobacco industry means the rules governing business operations are strict. There have been several efforts to clampdown the tobacco industry leading to sudden change in laws which does not help the merchant’s case. Tobacco businesses are also under high scrutiny by banks as well as governing officials due to the sale of cigarettes to underage consumers. The various restrictions placed on businesses who sell these products and the stigma attached to those who use it certainly makes merchant account providers and banks wary of being associated with the industry. Health Risks associated with the products sold Consumption of Cigarettes, Cigars, Tobacco products have shown clear signs of terminal health risks. Lung Disease, Heart complications, Cancer and various such deathly illnesses are caused by smoking. High Chargebacks Chargebacks are highly prevalent in the tobacco industry. Online stores selling tobacco products especially are highly vulnerable to chargebacks due to CNP transactions that take place. Also, due to the age restrictions in place, many young buyers find creative ways by using fake credit card information leading to too many chargebacks for the merchant. Delay in delivery, unsatisfied customers and fraudulent activities also cause chargebacks.
If you run a business, you need to find a way to accept and process payments made via credit cards. In order to do so, a Tobacco Merchant Account becomes a necessity. A reliable merchant account provider offering tobacco merchant account solutions that are customized to meet the needs and demands of your industry should be the perfect choice for your business. A provider with strong understanding of the workings of the business will most likely give you the best solutions and prices that will help you operate business without any hassles.
Do you require a tobacco merchant account but don’t know where to start? Sit back and let IBS assist you! IBS provides expert tobacco merchant account solutions to businesses around Europe that offer features and benefits as any other regular merchant account. In fact, with our tailor-made services have additional advantages that suit your business and allow our merchants to operate smoothly without any restrictions while also lowering the risk of getting terminated.
InternationalBankServices.com, headquartered in London, U.K., offers customized and affordable merchant account services for all business sizes and types. InternationalBankServices.com establishes strong relationships with our merchants as well as our banking partners for long term success. We are one of the best tobacco merchant account providers for small businesses in all of UK and Europe including :