We offer credit card processing and ACH/Check processing for online tobacco companies. Our rates are very low and competitive.
These days, it is virtually impossible to get a merchant service provider to setup a credit card account for online tobacco companies. If it’s a physical retail store where your customers are coming in to swipe their credit cards in person and verification is done, then just about any company can offer Visa, Mastercard, Discover and American Express for you to process transaction.
But it’s a completely different ball game when it comes to online processing of cigarette and tobacco products. Due to the restrictions by the bankcard industry, it’s a violation of Association policy for any processor to process tobacco products online with a credit card. It does not matter if the account is based offshore, if a processor blatantly violates bankcard Association rules, they will get shut down or loose their license to operate.
Why are the credit card companies so concerned? It’s simple: It is really due to public health concerns, mostly an attempt to prevent under age teens from ordering smokes online…thus justified Bankcard rules and regulations. Also the federal government has pressured the bankcard industry in an attempt to collect taxes from online tobacco companies that were not taxing their customers.
Due to the fact that there are no NACHA rules that prohibit tobacco/cigarette processing, most online tobacco website utilize ACH or e-check processing by phone or by integrating into their website to allow for their customers to use their check/savings account to purchase tobacco products over the internet.
Even with ACH and electronic check processing of tobacco products online, companies still have to have a process or a system in place to verify one identity and ago before they actually process an order. The large online retailers have sophisticated systems in place to verify ago. And not to say this will prevent under ago kids from purchasing online if someone else does the purchasing for a kid that is not of ago. Same is true for a physical retail store when someone else does the purchasing.
Many processors try to offer high risk accounts for this type of business by going offshore but are still in violation of Visa and Mastercard terms and policies when it comes to processing these products online.
For high volume merchants, we offer a flat rate per transaction fee. If the merchant is not high volume, we typically tack on a discount rate. We specialize in high risk and low risk.
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