In a surprise move, online payment processor, Paypal banned payments made towards vaping products. This move will lock out vaping product suppliers out of their accounts for 180 days.
The entire vaping industry has been hit hard with this sudden move from the world’s largest payment processing company. In these times of pandemic adversely affecting the businesses, this move has dealt a severe blow to the already impacted vaping businesses.
Initially, the company stated that it was merely complying with the terms rolled out by other payment processors. But surprisingly, post the ban, their terms have now been updated to this effect. They now say that it is due to their updated policy.
Vaping businesses are already bearing the brunt of a disastrous 2020. This move means that they have to move and re-align themselves to this new policy quickly. This step involves several steps and many touchpoints like contacting vendors and customers.
Moreover, the lack of any kind of support from these payment processors themselves is compounding the problem a lot.
What do industry experts say?
Many companies have come forward expressing strong reservations against Paypal’s ban of vaping companies on its platform. SuperGood e-liquid’s David Gilberts was vocal in a recent interview. He said that cash is a small business’ lifeline, and holding cash will yield a negative impact on the company.
Paypal’s view that vaping is not a safe practice is seen as a primary reason or this ban. However, David counters by citing numerous scientific studies which state that the method of vaping is safe. He is also worried that the vaping industry might shun Paypal in the future due to this step.
Online vape shop Creme de Vape was also severely hit with this move. They have been dealing with Paypal for more than 11 years, and this abrupt shutdown of account was totally unexpected. In their case, the hit wasn’t so bad as they were already preparing to transition to an alternative payment processor.
Can anything be done about this ban?
Paypal is offering a workaround as per its updated website usage policy. The site’s modified Acceptable Use Policy mentions that Pre-Approval is required for: PROVIDING FILE SHARING SERVICES OR ACCESS TO NEWSGROUPS; OR SELLING ALCOHOLIC BEVERAGES, NON-CIGARETTE TOBACCO PRODUCTS, E-CIGARETTES OR PRESCRIPTION DRUGS/DEVICES.
This seems like an easy workaround. But the ground reality is totally different. A US-based e-liquid company requested pre-approval. Surprisingly, they were turned down as per this statement – UNDER PAYPAL’S ACCEPTABLE USE POLICY, PAYPAL MAY NOT BE USED FOR THE SALE OF E-CIGARETTES, INCLUDING E-LIQUIDS CONTAINING NICOTINE, WITHOUT PRE-APPROVAL.
This means that while there is a pre-approval protocol in place, it is useless for vaping companies to use this avenue. So the end result is that the payments and transaction will still remain blocked.
The Need For A Powerful Global Vape Advocacy Group?
Such drastic steps have been detrimental to the survival of the vaping industry. The year has sent shockwaves of bad news to the industry, and such stunts from Paypal will force the last nail on the coffin of many businesses reeling from the loss of income. Many experts feel that this is the last thing they needed.
They feel that the continuous pressure from different fronts on the industry is not viable for the industry’s future. Such issues call for the industry to get together and counter the challenges that it sees on a regular basis. They hope that in the coming months, the industry forms an advocacy group to take on the anti-vaping lobby.
After all, their overall market is poised to touch north of $15 billion in 2020 itself! This number can be a compelling point to go for a powerful lobby, only if the industry experts come together as a collective force to save the vaping industry. They can take on challenges from government policies, various bodies like EU and WHO, and a biased mainstream media.
To sum it up
The future might look hazy for vaping. But the war is still on. It would prove to be beneficial if the industry has a global advocacy organization backed by the big vape companies is formed. But time would be of the essence so that companies don’t perish and vape lovers don’t suffer.
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