PayFast dropping the hammer - Valley Vapour

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drew

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Hey All

I'm sure most of you have already heard the news that PayFast will no longer be accepting credit card payments for vaping related purchases: https://www.ecigssa.co.za/disturbing-news-from-payfast.t33775/

I was really hoping that we had slipped under the radar, but unfortunately not. We received a notification yesterday stating that they would be de-activating our credit card processing service in 48H. I sent an appeal but have yet to hear back from them so that leaves us with about 24H left on the clock.

We will continue accepting Instant EFT via PF and Direct EFT via ABSA and hope to see a solution to the CC problem but with VISA/MasterCard at the source it doesn't look good.
 
@drew what is the reason for this? I read something about Payfast not allowing purchases with regards to vaping a while ago but I cant recall the reason.
 
I just did an order and paid on pay fast with no problems. The order was for pg vg and flavors.
 
OPium46 said:
@drew what is the reason for this? I read something about Payfast not allowing purchases with regards to vaping a while ago but I cant recall the reason.
Click to expand...

In a nutshell... FDA ruled that Vaping (and associated products) falls under the Tobacco act... Tobacco cannot be purchased online. SA has not implemented such regulations (yet), so EFT can still work seeing as though its direct with the banks and no involvement with VISA/MASTERCARD.
 
@OPium46 It has to do with Visa and MasterCard now classifying the vaping industry as "high-risk". Which I believe is due to compliance with the FDA tobacco regulations which vaping has been lumped into.

"You are being sent this notification as the primary contact on PayFast account ID ........... (Valley Vapour)

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.

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 within 48 hours.

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.

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."
 
Arthur said:
I just did an order and paid on pay fast with no problems. The order was for pg vg and flavors.
Click to expand...

We expect the credit card processing service to be de-activated within 24H but right now it's still working.
 
@drew Well this is some proper bs. How can they classify vaping in the same class as tobacco? The only similarity they have is the nicotine.
 
This is so not cool. Going to create big problems with orders. will need to add everybody as beneficiaries on my online banking. o_O;)
 
In my opinion, as long as they allow for the instant EFT it is good. But that is just me, as my Credit Card is worthless, "computer says NO".

But in all seriousness. When I have the option between CC and instand EFT, I always opt for the EFT route. I know some banks, looking at you Capitec, have issues with instant EFT. Lets hope that gets sorted out soon.

@drew I hope they answer your appeal.
 
Stand under correction but instant EFT is also a problem using C/C. Apparently you have to sign into your bank account and then use payment option from there using your C/C


Sent from my iPhone using Tapatalk Pro
 
@drew, as long as you keep up with stock I will keep my stock levels high no matter how I pay. I personally prefer to do a EFT, to receive my goodies a day later is no problem.
 
Blends Of Distinction said:
Stand under correction but instant EFT is also a problem using C/C. Apparently you have to sign into your bank account and then use payment option from there using your C/C


Sent from my iPhone using Tapatalk Pro
Click to expand...

But how difficult is that ha ha. We have had a number of people shouting at us about it but I mean all you got to do is login :)
 
drew said:
Hey All

I'm sure most of you have already heard the news that PayFast will no longer be accepting credit card payments for vaping related purchases: https://www.ecigssa.co.za/disturbing-news-from-payfast.t33775/

I was really hoping that we had slipped under the radar, but unfortunately not. We received a notification yesterday stating that they would be de-activating our credit card processing service in 48H. I sent an appeal but have yet to hear back from them so that leaves us with about 24H left on the clock.

We will continue accepting Instant EFT via PF and Direct EFT via ABSA and hope to see a solution to the CC problem but with VISA/MasterCard at the source it doesn't look good.
Click to expand...

Does this apply to online transactions only or also to in store purchases?


Sent from my iPhone using Tapatalk
 
@Sir Vape
I have a Capitec account and bank from my cellphone so I dont have this option to sign into my bank account
Unless I'm having a blonde moment


Sent from my iPhone using Tapatalk Pro
 
It's because they sell nicotine as well


Sent from my iPhone using Tapatalk Pro
 
It's not even just DIY vendors. ATF, the DIY recipe site, got chopped by Stripe, an American PayFast style processor. The bulk of their online trade is just subscribers buying subscriptions to the site.

But there are two aspects to high-risk merchants that make processors wary. The first is if the product is restricted, such as guns, alcohol, gambling, sex, etc. Then there are the sectors where there are many chargebacks and refunds - travel agents, timeshares, chatlines, infomercial products and so on. Vaping unfortunately falls into both categories apparently.
 
Hi All

Just an update as to where we stand with the credit card situation. We applied for a merchant account with our bank which is a requirement to make use of the payment gateways other than PayFast, like PayGate, MyGate & VCS. After a long wait we received news that the application was declined, the very brief explanation was along the same lines as PF... classifying us as tobacco :notagain: and high risk.

"We are waiting for approval as it is part of the tobacco industry and is deemed as high risk."

This was followed by:

"The application was declined by VISA."

This unfortunately leaves us out of options for processing credit cards directly...
 
and Paypal? I see a lot of international sites use paypal as a credit card gateway
 
Soutie said:
and Paypal? I see a lot of international sites use paypal as a credit card gateway
Click to expand...

PayPal also has an anti-tobacco policy, so until vaping is separately categorised by the FDA and the credit card companies all CC payment gateways will have issues processing for us.
 
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