If you are processing card-not-present (CNP) payments for tobacco products, you need to be aware that you must register with Visa® and MasterCard®. If this sounds bizarre, you may be at risk of your merchant account being terminated. Worse yet, you could be fined in excess of $20,000.00 or more for failing to do so.
You may not have heard about this requirement because your payment processor has already registered your business with Visa and MasterCard on your behalf. If your processor failed to do so, you should contact the company and tell them they need to register you. Here’s another important piece of information, Visa® and Mastercard® require a $500 annual fee to register CNP Tobacco businesses. This fee is passed along to you as the merchant account holder. Most processors that register their high-risk clients are transparent about the $500 annual fee and disclose it on your statement. This is the best way as you know they are charging you exactly what Visa and MasterCard charge and not a penny more. If you’ve not seen a fee for registration, your processor may not have registered your business as required. While industry-leading payment processors have transparent fees, some try to hide fees by charging a higher rate for processing to accommodate for required fees. So while you don’t see a separate fee on your statement, you are being charged a higher effective rate overall. Regardless, if you don’t see a fee charged for registering your company with Visa and MasterCard, you should immediately call your payment processor to ensure you’ve been registered.
If this information is an eye-opener, you may want to consider if your merchant processing company is doing all it can to look out for you. Not all high-risk processors operate with complete transparency or to the same level of compliance. For e-commerce tobacco and cigar merchants, one example that does is Premium Tobacco Payment Processing(PTP). As a Premium Cigar Association partner, PTP is proud to offer its members the industry’s lowest processing rates. Their rates and fees are guaranteed never to increase. And they never require a contract or charge a cancellation fee. If you are or plan to become a PCA member, PTP will cover members’ first-year MasterCard registration fee for card-not-present sales.
PTP is powered by Nuvo Merchant Services, a leading credit card processing company with over 35 years of experience. Nuvo Merchant Services founded Premium Tobacco Payment Processing to specifically meet the demands of merchants’ in the tobacco and cigar industry. If you are ready to change processors or would like a free audit of your existing processor, call Premium Tobacco Payment Processing today at (321) 972-9838.