Disturbing news from PayFast

Eish, that is bad news indeed. Not too catastrophic for us in the bigger centres as collection is always an option. But I really feel for the guys out in the sticks who can't get to a store easily. I suppose the powers-that-be don't want any age-restricted products to be online as the "You must be 18 to use this website" is, if anything, more an inducement than a deterrent. @YeOldeOke, any idea on the timeline for EFTs being stopped?

https://www.ecigssa.co.za/payfast-compliance-notice-ecigarette-and-vape-merchants.t37829/

Suspension of card processing services

As per recent card scheme (VISA & Mastercard) communication, all merchants in the business of sales relating to ecigarettes, vaping and their accessories are now considered "High Risk" merchants and subject to additional compliance requirements on the part of acquirers and payment processors.

Unfortunately, PayFast and our partner banks cannot process payments for "High Risk" merchants and as a result of this change by the card schemes, it will not be possible for PayFast to continue providing you with card processing services.

While we value your business and this state of affairs is regrettable, we must comply with the card schemes and our partner banks' requirements in this regard and will de-activate card payments on your account with effect from COB 12 June 2017.

We will currently still be able to process payment by non-card payment mechanisms (Instant EFT, bitcoin and mobicred) but all card payment mechanisms (credit, cheque and debit cards) are required to be deactivated as soon as possible. We are providing notice of 3 working weeks in terms of this communication.

Our only recommendation in this regard is that you seek an acquirer (bank) who is able to process transactions for "High Risk" merchants and engage with a payment service provider who is able to process transactions against your own high risk merchant account held with such acquirer.

It should be noted however, that to the best of our knowledge, the majority of acquirers in South Africa do not support high risk merchant processing and you might want to revise your systems, processes and business model to assume that payment by card will no longer be possible in the future.

It should further be noted that, in the United States, the FDA recently set out Deeming Rights (guidelines) that ecigarettes should be classified as "tobacco products". Should South African legislation follow suit (which is likely), the sale of ecigarettes and their accessories (whether they contain nicotine or not) will no longer be allowed online as per the Tobacco Products Control Act, 1993 (Act No. 83 of 1993) which prohibits such.

Should that come to pass, we will be forced to suspend payment processing on your account entirely as the nature of your business will then be deemed illegal under South African Law.

We apologise for this state of affairs, but hope that you understand that the matter is out of our hands and affects all acquirers and payment service providers providing card services from VISA and Mastercard.

Our customer services team is available to answer questions you may have in this regard, but this communication is intended to be as comprehensive as possible regarding this matter and it is unlikely that they will be able to provide any further information than has not already been provided here. They will also, regrettably, be unable to offer an extension to the deadline communicated above.

If you feel that you are being sent this notice incorrectly, and your account with PayFast is not involved with sales relating to ecigarettes, vaping and their accessories, please do contact our customer services team and inform them of such as soon as possible.

RichJB said:

Eish, that is bad news indeed. Not too catastrophic for us in the bigger centres as collection is always an option. But I really feel for the guys out in the sticks who can't get to a store easily. I suppose the powers-that-be don't want any age-restricted products to be online as the "You must be 18 to use this website" is, if anything, more an inducement than a deterrent. @YeOldeOke, any idea on the timeline for EFTs being stopped?

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EFT's would be stopped once Parliament passes a law (most likely an amendment to the Tobacco Act) classifying vape gear etc as tobacco products. I'd assume it'd have to be gazetted first (correct me if I'm wrong), so not all that soon, I'd think.
However, I'm not a lawyer - we have a few on here. I'm hoping they respond here, cos right now there's a LOT of questions

I need to move to KZN then to get the latest and greatest

incredible_hullk said:

I need to move to KZN then to get the latest and greatest

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Just stock up on some Reo's,OL16s and some DIY stuffs.

RichJB said:

Eish, that is bad news indeed. Not too catastrophic for us in the bigger centres as collection is always an option. But I really feel for the guys out in the sticks who can't get to a store easily. I suppose the powers-that-be don't want any age-restricted products to be online as the "You must be 18 to use this website" is, if anything, more an inducement than a deterrent. @YeOldeOke, any idea on the timeline for EFTs being stopped?

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As @aktorsyl said. However the timeline may be sooner than we think, after this move by MC/Visa.

But I am seriously concerned about the impact even before that. I've been in e-commerce for decades, in the US, UK and Asia markets. For online transactions trust, user confidence and efficiency are absolutely critical. People from the forum know most of us, so apart from the turnoff and irritation of having to do an EFT, even through Payfast, vs a quick cc transaction they will continue to do business. However, the bulk of customers isn't necessarily of the forum or even aware of the forum. That is where the big whammy will come from first, even while EFT is still available.

That doesn't mean that in that period forum dwellers won't feel the impact. If any business loses a substantial % of it's revenue, it is either close down or raise prices (which has it's own negative spiral). Increased marketing is of course an option in a steady market, but if the market is wobbly and threatened from various angles that option disappears, unless you're a high risk player.

Not good!

What are the additional compliance requirements?

And no more eBucks (((

aktorsyl said:

EFT's would be stopped once Parliament passes a law (most likely an amendment to the Tobacco Act) classifying vape gear etc as tobacco products. I'd assume it'd have to be gazetted first (correct me if I'm wrong), so not all that soon, I'd think.

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Yes, it would have to go through the "stakeholder engagement" and public comments phases as all other laws do. Although I think that could happen quite quickly. Seeing as both NA and the EU have chosen to regulate vaping, it's pretty much a slam-dunk for the legislators. I foresee us following the EU's TPD quite closely. There doesn't seem to be any great urgency on government's part but that could change in a hurry as well. Anyway, let's hope they get sidetracked with other health issues for as long as possible.

Time to start accepting bitcoin

Yup, I warned all of you that payfast were going to do this.. Here it comes unfortunately

So the two major CC companies have managed to dent global trade in as large a manner as people were worried big pharmaceutical and tobacco were going to.

Maybe we need to get an influential South African family to invest in a few vape shops to ensure the local industry's future

So it's happening!

Anyone think of any ways around this yet? The vendors who figure it out will be the one's to come out smiling since the business will naturally go to him.

Hey, Take A Lot is still selling vape goodies without any issue so maybe just join them as a lot of suppliers do (the sold by X, fullfilled by Take A Lot...)

Why not sell virtual value vouchers on BoB and then we simply pay for that which has a value and we use that code on your website on goods?

Maybe register a florist as a separate business that processes payments and only have a vape website for informative purposes but does not process any payments if you get my drift.

As I said, it's happening. We can cry about PayFast/Mastercard/Visa, the FDA and our government all we want until it kills a business or you can find an alternative already because someone who wants it's bad enough will find one and they will steal your lunch.

SnapScan is a definite option - I use it to pay on a few websites/online stores (OneDayOnly as example) and works like a dream - never had any hassles paying like this.

Allenh1 said:

SnapScan is a definite option - I use it to pay on a few websites/online stores (OneDayOnly as example) and works like a dream - never had any hassles paying like this.

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Nope, it's still processing through your cards. EFT or a smoke screen shop is needed.

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Can anyone confirm this? Cannot seem to find anything on the net apart from this thread and old stuff from 2016

So how do Visa and Mastercard allow the major retailers and petrol stations selling cigarettes to accept credit cards? Is this only for online shops or all vape shops?

Online shops I would think. Isn't the big issue that kids can buy online, and this is why cigarette sales are banned online but not in supermarkets?

RichJB said:

Online shops I would think. Isn't the big issue that kids can buy online, and this is why cigarette sales are banned online but not in supermarkets?

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Online sales of vaping equipment isn't banned anywhere yet, that I know of. Oz I've heard some things but haven't been paying attention to what's happening there. Visa/Mastercard has followed the FDA regs a while back already in classifying vaping stuff as tobacco. It isn't banned by them, it was declared high risk. If you look at international merchant accounts you'll see this.

SA is a backwater, and MC/V hasn't clamped down on processors here until it seems now. The problem isn't that it is banned, it is that the processors have to adhere to stricter standards and probably higher fees in processing transactions and the local ones are not geared up for it or regard the market as too small to bother with it.

For me it isn't so disturbing, from the first thread, if I order say from the Sirs, they send me an invoice and I do an EFT. I must admit what is disturbing is the fact that so many minors is walking around with vapes, THAT my friends is making it difficult for all of us.

Petrus said:

For me it isn't so disturbing, from the first thread, if I order say from the Sirs, they send me an invoice and I do an EFT. I must admit what is disturbing is the fact that so many minors is walking around with vapes, THAT my friends is making it difficult for all of us.

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It has zero to do with minors, everything to do with pharma. Minors are just the acceptable excuse. If no minors were ever vaping there would be another excuse.

Thanks for the clarification, @YeOldeOke. What do the "stricter standards" relate to, though, if not sales to minors? I was chatting about this in Discord and American vapers don't seem to have any problems with Visa/Mastercard there. Is this because their processors are willing to go the extra mile?

I still have some friends in the online CC processing business. I started my career working for an online CC processing company. Will ask them if they've heard anything official from MC/V

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