- June 8, 2020
- Posted by: iPay Editor
- Categories: best high risk merchant account provider, best high risk merchant services, Tobacco merchant account, Uncategorized
It is really hard to find a merchant account for Tobacconists. Due to this Tobacco merchants end up paying high rates and processing fees and also due to the unique regulation on the tobacco business. The tobacco product line is quite interesting thus the tobacco merchants will be mostly excited about their product line. And now due to the Covid-19 situation panic buyers have brought in a sudden surge in requirement.
What is Tobacco merchant account?
Tobacco merchant account allows a merchant to accept credit and debit card payments from customers who shop products from smoke shops. The card might be Visa, MasterCard, American Express etc. Most of the times the payment processor will tie up with an acquiring bank who will complete the transaction.
It is much easier to find a payment processing solution for retail tobacco shops. Payment processors find it safer because the customer will be present at the time of purchase. However, during a card not present (CNP) transaction merchants experience resistance. Card not present(CNP) transactions include online sales, telephone order(MOTO) etc.
Merchants can accept payments through a payment gateway otherwise with Point-of-sale (POS) terminal. By using POS or gateway the customer account details will be captured and quickly facilitate the transaction. Then an authorization request will be sent by the acquirer and then the transaction will be either approved or declined. Then the funds are deposited into merchant’s bank account. It sounds like a really long process and sometimes it may take about 24 to 48 hours to complete this process.
What’s the current situation of online Tobacconists due to Covid-19?
Due to the Covid 19 situation it is quite difficult to find smoke shops open. Most of the shops across the globe is shut due to lockdown. Now the only option left for the regular shoppers is online shopping. People are searching various online shopping options to find tobacco products.
Due to this there has been a significant increase in sales. And most of the customers are purchasing extra just to keep stock assuming situation might get more worst. Most of the merchants adapted to the current situation and trying to do the best for their customers. Most of the shops have started providing online shopping option for their customers.
What to expect when you apply for an online tobacco account application:
First of all when you apply for a merchant account the underwriters will look if your business complies with all rules and restrictions. They also check the potential financial risk factor to payment processors and acquiring banks. Based on this review the application will be either approved or declined.
Business owners need to make sure that they have a clean and clear website because the underwriters will have a look at the website and check about the products since some products like pipes might prompt marijuana use. Policies should be clearly mentioned otherwise the underwriters might ask business owners to update policies on the website before approval. The underwriters will consider few factors to determine risk such as credit score, bank statements, processing history etc. If they find any fault like late payments, high chargeback ratio etc. that will result in higher risk factor.
There are few good points which the underwriters will note if you have a clean account such as outstanding debts, good bank balance, great credit history etc.
If you are looking for a Tobacco merchant account call iPayTotal now. We are happy to help you. We have worked with thousands of merchants and understand the difficulty high risk merchants face. We can offer you with tailor made solutions with reasonable rates.