Compliant Payment Processing for Vape and E-Cigarette Businesses

The vaping industry faces unprecedented regulatory challenges and payment processing obstacles, despite being a legal alternative to traditional tobacco products. From FDA's Deeming Rule and the PACT Act to state-specific flavor bans and shipping restrictions, vape shops and e-cigarette retailers must navigate a complex landscape while maintaining reliable payment processing. KeraPay specializes in providing stable, compliant merchant accounts for the vaping industry, supporting both brick-and-mortar vape shops and online e-cigarette retailers with solutions designed for long-term success.

The Vaping Industry Payment Challenge

Vape businesses face multiple layers of complexity in payment processing:

Regulatory Compliance Burden

The vaping industry operates under intense regulatory scrutiny that affects payment processing:

FDA's Deeming Rule classifying e-cigarettes as tobacco products
PACT Act requirements for online sales and tax reporting
State-by-state flavor bans and product restrictions
Tobacco 21 federal age verification mandates
PMTA (Premarket Tobacco Product Application) requirements
Jenkins Act registration and reporting obligations

Banking Industry Discrimination

Many financial institutions refuse to work with vape businesses due to:

Reputational risk concerns from anti-vaping advocacy
Regulatory uncertainty and enforcement fears
Youth access prevention responsibilities
Confusion about federal vs. state regulations
ESG policies excluding nicotine products

PACT Act Compliance for Online Sales

The Prevent All Cigarette Trafficking Act creates specific requirements for online vape sales:

Registration Requirements

ATF Registration: Register with Bureau of Alcohol, Tobacco, Firearms and Explosives
State Registration: Register with tobacco tax administrators in all states you ship to
Jenkins Act Compliance: Monthly reporting of interstate sales to state tax authorities
Tax Collection: Collect and remit excise taxes for destination states
Record Keeping: Maintain detailed records for 4 years minimum

Shipping Requirements

Use private shipping carriers (USPS prohibited for vape products)
Adult signature required upon delivery (21+)
Verify age of purchaser at time of order and delivery
Label packages to identify contents as tobacco products
Maintain shipping records and proof of age verification
Report non-deliverable packages to ATF

Age Verification Solutions

Robust age verification is critical for vape payment processing:

Online Age Verification

Third-party age verification services that check government databases, credit bureaus, and public records to confirm customers are 21+. Integration with Veratad, AgeChecker.Net, and BlueCheck for real-time validation.

In-Store ID Scanning

POS-integrated ID scanners that verify authenticity and age, creating compliance records for every transaction. Automatic flagging of expired or suspicious IDs.

Delivery Verification

Coordination with shipping carriers to ensure adult signature capture at delivery, with digital records linked to payment transactions for compliance documentation.

State-Specific Compliance Management

Navigate the patchwork of state regulations with automated compliance:

Flavor Ban States

Massachusetts: All flavored vape products prohibited
New Jersey: Flavored cartridge-based products banned
New York: Flavored e-cigarettes prohibited except tobacco/menthol
Rhode Island: Flavored vape products banned except at age-restricted stores
California: Comprehensive flavor ban with limited exemptions

Online Sales Restrictions

Arkansas: Online sales prohibited
Maine: Online sales banned
Oregon: Online sales require special license
South Dakota: Online sales prohibited
Utah: Online sales restricted
Vermont: Online sales banned

Product Categories We Support

Hardware & Devices

Disposable vapes
Pod systems
Box mods
Vape pens
Tanks and atomizers
Batteries and chargers

E-Liquids & Consumables

Nicotine e-liquids
Salt nicotine products
Zero-nicotine e-liquids
CBD vape products
Replacement coils
Replacement pods

PMTA Compliance and Payment Processing

FDA's Premarket Tobacco Product Application requirements affect payment processing:

PMTA Status Verification

We help ensure your products meet FDA requirements:

Products with granted marketing orders
Products under substantive scientific review
Products marketed before August 8, 2016 (grandfathered)
Documentation of PMTA submission and status
Removal of non-compliant products from processing

Risk Management for Vape Businesses

Minimize chargebacks and disputes with vape-specific strategies:

Common Chargeback Reasons

Product not as described (flavor/strength differences)
Shipping delays from carrier restrictions
Age verification failures
Subscription billing disputes
Defective hardware claims
Regulatory shipping blocks

Prevention Strategies

Clear Product Information

Detailed descriptions of nicotine strengths, VG/PG ratios, flavor profiles, and device compatibility. Include warnings about state restrictions and shipping limitations.

Transparent Policies

Clear return policies acknowledging e-liquid sales are final. Device warranty terms and defect handling procedures. Age verification failure protocols.

Customer Communication

Proactive shipping updates with carrier tracking. Education about PACT Act requirements and delivery procedures. Support channels for product questions and issues.

Wholesale and B2B Vape Sales

Support for vape distributors and wholesale operations:

Volume Pricing: Tiered rates for high-volume wholesale transactions
Net Terms: Invoice and ACH payment options for established accounts
Multi-Store Support: Centralized processing for chain vape shops
Trade Show Processing: Mobile solutions for industry events
International Trade: Import/export payment facilitation

Alternative Nicotine Products

Expanding beyond traditional vaping to new nicotine categories:

Heated Tobacco

Heat-not-burn devices
Tobacco heating systems
Hybrid products
Heated tobacco sticks

Oral Nicotine

Nicotine pouches
Nicotine gum
Nicotine lozenges
Nicotine toothpicks

Marketing Compliance and Payment Risk

Maintain payment processing with compliant marketing:

Acceptable Marketing Practices

Age-gated websites and social media
Harm reduction messaging for adult smokers
Product education and safety information
Adult lifestyle content and imagery
Compliance with FDA warning requirements

Prohibited Marketing Activities

Youth-appealing imagery or messaging
Health benefit claims
Modified risk claims without FDA approval
Free sample distribution
Sponsorship of youth events

Integration with Vape Industry Systems

Seamless integration with vape-specific software:

POS Systems

VaporWare
Tobacco Station
Verifone Carbon
Square for Retail
Clover POS

E-Commerce Platforms

Age Checker integrations
WooCommerce with age gate
Shopify (where permitted)
Custom vape platforms
B2B wholesale portals

Building Customer Loyalty

Payment features that enhance customer retention:

Loyalty Programs: Points-based rewards for repeat purchases
Subscription Services: Auto-ship programs for e-liquids and coils
VIP Tiers: Exclusive discounts for high-volume customers
Referral Rewards: Incentives for customer referrals
Birthday Promotions: Special offers for verified adult customers

Transparent Pricing for Vape Businesses

Clear, competitive rates for vape and e-cigarette merchants:

Retail Vape Shops: 4.2% - 4.8% + $0.30 per transaction
Online Vape Stores: 4.8% - 5.5% + $0.35 per transaction
Wholesale/B2B: 3.5% - 4.2% + $0.40 per transaction
Monthly Fee: $25 - $75 based on volume
PACT Act Compliance: Included in base pricing
Chargeback Fee: $25 per occurrence

Getting Started with Vape Payment Processing

Our streamlined application process for vape businesses:

Compliance Review: Verify PACT Act registration and state licenses
Product Verification: Confirm PMTA compliance status
Age Verification Setup: Integrate verification systems
State Restriction Configuration: Set up geographic blocking
Go Live: Start processing with full compliance

Why Choose KeraPay for Vape Payment Processing?

KeraPay understands the unique challenges facing the vaping industry:

Industry Expertise: Deep understanding of vape regulations and compliance
PACT Act Compliant: Full support for federal and state requirements
Stable Banking: Long-term relationships with vape-friendly banks
Compliance Tools: Automated age verification and state blocking
Growth Support: Scale from single shop to national chain
Advocacy Partner: Supporting reasonable vaping regulations

Supporting the Vaping Industry

We believe in harm reduction and the role of vaping in helping adult smokers transition away from combustible cigarettes. KeraPay is committed to supporting legitimate vape businesses that prioritize compliance, age verification, and responsible marketing. Together, we can ensure the vaping industry continues to provide adult consumers with safer alternatives while maintaining the highest standards of regulatory compliance and youth access prevention.

Vape Payment Processing

Industry Challenges We Solve