Posted by admin on Feb 10, 2015


ecigarette merchant accounts

Payment Processing for Ecigarette Merchants

Are you facing exorbitant transaction costs from your current payment processor who is citing reasons like ‘high risk’ industry for the obnoxious premium?

Now, there is a better way to accept payments while keeping the transaction expenses under control.

Diversify Payment Processing to Protect Your Business

All indications are that the growth for the industry is straight up. Brand loyalty is high among e-cigarette users who tend to buy over and over from the same site.

Some payment processors put caps on processing accounts, making it difficult to grow.  In other cases, a particular acquiring bank may stop accepting ecigarette accounts due to changes in bank policies towards the industry.

Payment processing is too important to depend on a single acquiring bank.  As your volume of processing increases, the wisest strategy to establish more than one merchant account to mitigate risk.  Load balancing the accounts on a single payment processing gateway makes management, customer service, and accounting reconciliation a breeze.

Make sure to add as many alternative payments as possible as well.  In the US, cards are the first choice of payments.  Echecks are also gaining wide acceptance and 30% of US sites now offer buyers the option to pay with a direct debit from a bank account.

Exponential Growth in e-Cigarette Market

Ecigarettes were developed as an alternative to tobacco cigarettes to reduce the health problems caused due to smoking.  E-cigarette or electronic cigarettes were first introduced by Chinese retailers in the US in 2005 .

Sales of ecigarettes have soared in recent years.  One out of every five adults who smoke has tried an e-cigarette. According to a study by Wells Fargo as of July, 2014, there are 2.5 million e-cigarette smokers in United States with a projected market of $1.7 billion.

In fact, according to the Wells Fargo analyst, Bonnie Herzog, in 10 years the e-cigarette industry is predicted to be as big as the tobacco industry itself.


There are some banks and payment processors who are not willing to offer ecigarette accounts because they are put in the same classification as online tobacco sales. Other processors charge exorbitant rates with high reserves.

But you have better choices.  You can get ecigarette merchant accounts with fair rates and no reserves.  And, the news gets better.  The more volume you process, the lower your rates can be.   

Are you are an online retailer for e-cigarettes and need to establish or diversify your payment processing accounts?

Contact today.