The 10 Best Cigarette Merchant Account

The Food and Drug Administration (FDA) is responsible for regulating tobacco products in all forms, including e-cigarettes, hookah tobacco, and cigars.

The Prevent All Cigarette Trafficking Act of 2009 (PACT Act) was specifically created to prohibit the online sale of cigarettes and smokeless tobacco to anyone under the legal age as defined by their state.

Under the PACT Act, the specific measures that the online cigarette retailer should take is to label their packages to state that it contains tobacco. They must also verify the age and identity of customers at the time of purchase.

With the myriad of laws and regulations, the evident health risks, the risks of tobacco products falling into the hands of minors, and more, banks are unwilling to grant cigarette businesses a merchant account.

Below are 10 highly recommended merchant service providers who have a solid reputation and expertise in the cigarette business and are ready to help you launch yours. Take the time to analyze your options that would suit your cigarette business best.

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Allied Payments

With offices in North Palm Beach, Florida, Allied Payments specialises in providing high risk processing services for online cigarette merchants.

The Pros

One of their features, an e-Check solution, has the following benefits: low costs, account stability (transaction disputes are 2-3%), increased protection from chargebacks, a fraud protection system which is linked to their fraud scrubbing platform, check conversion processing solutions, check verification, check guarantee, and check drafting.

In addition, there are no volume limits.

Both the approval and setup fall within the same timeframe of 1-3 days. Deposits will be received within 48 hours.

They offer integration with payment gateways such as: WooCommerce, Shopify, BigCommerce, Ecwid, Limelight, Magento, Opencart, and Prestashop.

The Cons

This company only offers communication by phone, mail and contact form. Would be best to have a live chat feature that merchants can utilize for pressing matters and urgent questions.

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Total Processing

Founded in 2015 and headquartered in Manchester, UK, Total Processing offers customised payment solutions for businesses. They specialise in high risk merchant accounts for cigarette merchants.

The Pros

Their expertise lies in the following: high availability account servicing, high availability and redundancy, scalability and change speed reactivity, independent from an acquiring bank, dedicated expert support, robust and simple integrations, cost effective solutions, PCI level 1 compliant, and business critical cash flow delivery timescales.

Additional benefits for their merchants include: a secure payment gateway, hotlists, flexible card verification, security tools, enhanced reporting functions, fixed bonds, rolling reserves, deferred payments, online risk analysis, and recurring payments. Accepting all traditional and alternative payments, including ApplePay ( a total of 198 payment methods).

They also provide great customer service and chargeback prevention.

The Cons

Although there is a phone number, search bar and chat feature for questions, the live chat feature is only available during office hours, which doesn’t help if there are emergencies after office hours. Having 24/7 support is key to putting out any potential fires.

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Durango Merchant Services

Founded in 2004 and located in Durango, Colorado, Durango Merchant Services works with many gateway processors and suppliers with sponsor banking relationships that offer credit processing solutions for both the US-based and internationally based companies.

The Pros

Features in the contract include: variable contract lengths (month-to-month), free application processing, direct financing with regular deposits (daily or weekly, depending on whether onshore vs offshore), recurring billing, competitive rates, acceptance of multiple currencies and deposits, compatibility with major gateways and shopping carts, integration assistance with more than 100 shopping carts, chargeback prevention tools and advice, eCheck processing, gateway includes fraud detection and prevention tools.

The Cons

The only complaints received about this company were about Durango’s inability to get approval for a high risk merchant account and about a partnering bank withholding a merchant’s funds.

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Headquartered in Chicago, Illinois, and founded in 2009, Payline offers its merchants the following benefits: access to a virtual terminal, no cancellation or termination fees, next day deposit of funds, direct integration with Quickbooks, and a chargeback prevention platform.

The application process is quick and painless in which their high risk experts work to create a customised solution.

They also offer a dedicated support team to navigate the different options available to high risk merchants.

The Pros

Their virtual terminal alone, has a vast array of features, including: invoicing, a hosted payment page, billing plans and scheduled payments, shopping cart integrations, ACH payments, Mobile App, securely stored customer data, in-depth reporting, emailed receipts, void and refund capabilities, free PCI compliance, and unlimited users.

The Cons

The few complaints filed against the company include withheld funds, product malfunctions, and slow customer service.

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Host Merchant Services

Based in Newark, Delaware and founded in 2008, Host Merchant Services provides customizable payment processing solutions for high risk merchants, including cigarette businesses.

The Pros

Their features include a guaranteed lowest rate, free mobile options, affordable point of sale, free equipment for qualified accounts, transparent statements, online marketing tools, multiple payment gateways (Transaction Express and Authorize.NET), virtual terminals, online shopping carts, PCI compliance, merchant cash advances, EMV credit card machines (including traditional, mobile/wireless, and PIN Debit PIN Pads), point of sales systems, gift and loyalty programs, cash discount programs, small and large ticket processing, and data breach protection.

The Cons

Only a handful of complaints have been reported and were related to merchants being denied an account or malfunctioning hardware. The others were about a misrepresentation of rates and an unexpected equipment lease. It is imperative that merchants read the fine print thoroughly to avoid these unnecessary charges.

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iPay Total

Founded in 2018 and headquartered in London, iPay Total is a payment processor that offers end-to-end high risk merchant solutions to cigarette merchants around the world.

The Pros

Some features offered on cigarette merchant accounts include: multi-bank processing (including offshore), secure payment gateway, chargeback alerts, chargeback disputes, ACH/Check 21 processing, repeat/recurring billing, fraud prevention and protection, and competitive processing rates (below 6%), as well as 24/7 support online or by phone.

The Cons

High risk merchant account contract terms are not disclosed to the public. iPay Total also claims to charge a set up fee of up to £4,500, an incredibly exorbitant and prohibitive amount, especially for small businesses starting out.

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Located in Portsmouth, New Hampshire, Instabill was founded in 2001 by CEO Jason Field to help high risk merchants secure credit card payment solutions.

The Pros

Tobacco merchant benefits include the following: easy person to person transfers, no debit/credit card or PIN use, a convenient storage solution on your PC or smartphone, traceable transactions to deter fraud.

The Cons

Due to Instabill’s focus on high risk accounts, it may feature tiered pricing, early termination fees, and PCI Compliance fees. Most complaints against Instabill are about the company’s fraud prevention policies. Merchants report cancellation of their merchant accounts or withholding funds.

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Radiant Pay

London-based Radiant Pay is an agency offering payment solutions to merchants across all “legal” industries, including cigarette merchants. It is a leading payment solution provider in the UK, European, and Asian countries.

The Pros

Some of the advantages offered include quick approvals, partnership with banks around the world, round the clock support, affordable pricing plans, quick payouts, minimal transaction charges, no deductions from revenues, uncapped transaction volumes, multi-currency processing, low taxes, risk management solutions, and personalised consultations.

The Cons

Some complaints about the company have to do with sales agents imposing highly undesirable contract terms. It is best to read the fine print thoroughly before signing anything with this company.

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Based in Los Angeles, California, eMerchantBroker offers high risk processing solutions. They offer unique payment solutions for cigarette businesses.

The Pros

EMB offers custom-made paid solutions, excellent customer service, approval rates between 24 and 48 hours, chargeback management tools, PCI-compliant payment gateways, as well as fraud filters.

The Cons

Very little information about the standard contract. This could only mean that the contract terms vary widely from merchant to merchant. There are early termination fees that are up to $295 for 1 year contracts and up to $595 for 3 year contracts.

Provider of the Month

Although more federal and state bodies are considering banning Internet sales of tobacco altogether, the move is more about preventing youth access to tobacco products.

It appears that a great majority of the online tobacco businesses have not complied with having effective age-verification methods. Some of them are not sophisticated enough to circumvent tech-savvy youth, while an alarming number of these tobacco businesses have no age-verification software in place.

Regardless of this challenging environment, cigarette businesses are more likely to secure a merchant service account if they do their due diligence and remain legally compliant, have secure websites, and prominently display their privacy and refund policies.