Reason being, vapor merchants are considered high risk merchants. Why? Well simply because the scope of business they are in, is considered to be risky by most banks. To add fuel to the fire, the FDA has threatened in the past to ban E-Cigarettes and Vaporizers. Some city's across the United States have already banned the use of E-Cigarettes and Vaporizers, giving even more reason for banks to not issue Merchant Accounts. Even behemoths such PayPal and Square don't want the risk associated with E-Cigs and Vaporizers. Countless merchant accounts have been shut down by them. This constitutes a major problem to processing credit cards within the industry.
However, the electronic cigarette market and vaporizing market is booming and growing by leaps and bounds. This industry cannot be ignored! This segment represents a viable opportunity for certain types of card processing companies that can undertake the risk. The two major types of companies that would be a willing to underwrite the risk are direct credit card processors and an Independent Sales Organization (ISO's).
A direct credit card processor have a relationship with Visa, Mastercard and with an acquiring bank. The credit card processor will assess risk and process the credit card transactions for the acquiring bank. Credit card processing companies will also team up with ISO's to capture new business opportunities.
ISO's are another avenue for Ecig merchants and Vaporizer merchants to obtain a merchant account. Some ISO's will underwrite risk and partner up with a direct credit card processor that has a relationship with an acquiring bank. ISO's offer high risk merchant solutions for various industries including Ecig Merchants and Vapor merchants. It is important to do your homework in searching for an merchant account that fits your needs. Also ask about what triggers an account to be closed.