Tobacco Merchant Accounts & Payment Processing

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Last Updated on July 10, 2024 by Corepay

Are you looking to accept payments for your tobacco company and having trouble? You’re not alone.Accepting payments for tobacco merchants has never been more difficult than it is now. VIRP has cracked down on Card-not-present transactions, making it more difficult to achieve and maintain a reliable payment processor. At Corepay, we frequently work with high-risk merchants such as tobacco merchants and understand exactly what it takes to get you approved and ensure you stay approved.

We are the most reliable option available for accepting tobacco payments, and we would love to take your business to the next level as we can offer both online payment acceptance and in-store terminals.

Key Takeaways

  • We offer transparent pricing, the appetitie for tobacco billing, and reliability in an unstable industry, all with our proprietary gateway.
  • Finding reliable payment processing for tobacco merchants is extremely difficult.
  • Depending on volume, tobacco merchants may pay more in fees than other high-risk verticals.
  • Snus has become one of the leading tobacco products as it is an alternative to smoking ciggaretes. It is used the most in Sweden with nearly 13% of the entire population partaking.

What Is A Tobacco Merchant Account

A tobacco merchant account is bank account that enables you to accept credit and debit card payments for tobacco-related products. It provides a secure payment gateway that allows customers to make purchases conveniently.

By setting up a tobacco merchant account, you can expand your customer base and increase sales by offering multiple payment options.

You will need a reliable, high-risk payment processor to set up payment processing for your tobacco store.

Why Are CNP Tobcacco/Snus Purchases High-Risk?

Many tobacco stores rely on CNP transactions to make sales. Card-not-present transactions do not require the cardholder’s physical presence during the purchase, making them susceptible to fraud and chargebacks. With VIRPcracking down on CNP payments and high-risk verticals in general, banks and processors simply do not want to take the risk and eat the additional fees/penalties associated with the industry.

Additionally, tobacco products have a higher likelihood of being resold illegally, leading to increased risks for financial institutions processing these transactions.

Types Of Products Sold By Tobacco Companies

Here are some of the main types of products you will find in an online tobacco store:

  • Snus
  • Cigarettes
  • Cigars
  • Chew
  • Hooka

These products showcase the vast array of options available from tobacco companies, each catering to different consumer preferences.

Tobacco Payment Processing Compliance

When managing your tobacco merchant account, ensure compliance with payment processing regulations. It’s crucial to follow all guidelines set forth by payment processors to avoid any potential issues.

Tobacco Fees

Fees related to tobacco products will typically be on the higher side as it’s an incredibly risky industry. That said, we are here to help our clients grow, and we continuously work on making sure fees are as aggressively priced as possible given the volume.

The only mandatory fees for processing are not on our end, as they are regulated by the card brands below:

While we waive all setup and annual fees on our end, Visa and Mastercard require $950 for registration fees, due to the changes to VIRP on April 1, 2024.

Why Choose Corepay?

At Corepay, we are proud to offer the following:

  • Fast tobacco approvals within 24-72 hours
  • No application, setup fees, or annual fees
  • Risk mitigation with Order Insight, RDR, & chargeback prevention alerts
  • Traditional chargeback alerts
  • Maximize approval ratios based on your target customer base
  • High-risk rates as low as blended 2.95%

When clients choose Corepay, they choose:

  • Extremely Competitive Rates: We always do our part to make sure we set your business up with the most affordable processing rates possible to keep optimal profitability.
  • Customer Service: We pride ourselves on having reliable customer service that is always there to answer questions and give you solutions.
  • High-Volume Processing: Our processing solutions are explicitly designed for high-volume/high-ticket companies.
  • Equipment needed for in-store purchases
  • Waived set up, application, and annual fees
  • Anti-fraud/chargeback solutions through our partner product CB-ALERT.
  • Quick Approvals: We understand the importance of approval times, and we typically can get you approved with 24-72 hours.
  • Security: We have a PCI-Level 1 secure payment gateway, Netvalve, that is monitored 24/7.


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