The United States Food and Drug Administration (FDA) finalized a new rule earlier this year that gives them the authority to regulate all devices related to e-cigarettes and vapor-producing products in the same way that cigarettes have been regulated under the Family Smoking Prevention & Tobacco Control Act of 2007. These new FDA regulations have begun to dramatically affect how merchants in the e-cig industry accept credit cards.

MasterCard revised their Business Risk Assessment and Mitigation (BRAM) compliance program to include e-cigarettes and vape pens. This revision came to be thanks to the FDA’s authority extension on vapor-producing products and electronic nicotine delivery systems (ENDS) and is being referred to by vape business owners as the “anti-vaping” policy.

Merchants must now:

  • implement an age restriction on shopping for their products in-store and online;
  • meet all new FDA requirements for labeling, marketing, advertising, promotion and manufacturing for vape and e-cigarette products;
  • ensure that they follow all state and federal law requirements at their business;
  • and follow e-commerce rules that include
    • registration costs with MasterCard at $500/year per merchant (effective January 15, 2017);
    • health warning labels displayed visibly on the website;
    • signature from an adult upon delivery of product;
    • and full disclosure of billing terms

Merchants will also now require legal compliance verification, as well as acceptance of the registration fee required by MasterCard. Previously, some e-cig businesses did not have to register with credit card brands to accept credit cards so long as they were not selling tobacco products. As of January 15, 2017, however, businesses that sell ENDS and vapor products will have to pay $500 to MasterCard (with Visa and Amex likely to follow, adding a burdensome fee to your business operations).

Understandably, this is not an easy (or inexpensive) process for merchants, and we are helping to make this a clean transition for businesses in the e-cig industry. Payline Data has been supportive of many e-cig merchants and helps business owners transition whenever new FDA regulations may impact how you accept credit cards.

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