Problems with contracts and suspended payment services. This has affected several companies selling e-cigarettes and e-juice in recent months.
"I had to start the vejp shop with swish payment. That's not optimal" says Swedish e-juice maker Linus "Koyuki" Gustafsson
For over a month now, e-cigarette retailers have been experiencing problems with their payment systems. There are reports from all over the world that, among others PayPal stopped all payments for vejp products. The reason is that PayPal no longer considers e-cigarettes to be "ethically sustainable" for the company, according to Planet of the Vapes. Companies that have been affected include, among others, British Vaping101, Creme de Vape, the essence manufacturer Molinberry. Also Chinese tech giant FastTech has stopped payments via PayPal.
Dispute with credit card companies
In Sweden, companies have also encountered problems with payments. And this applies not only to PayPal, but also to other credit services, such as Klarna.
"It's really the credit card companies VISA and MasterCard which dictates the terms and conditions and charges a fee annually to companies dealing in 'tobacco products'. And e-cigarettes are often categorized as 'tobacco' in international contexts - nicotine or not" says Niklas Linder, President of the Electronic Cigarette Industry Association, to Vejpkollen.
This has reportedly led to disputes between card issuers such as Mastercard and VISA and credit companies such as Klarna.
Closed the cash register without warning
One of the Swedish entrepreneurs in trouble is the e-juice maker Linus "Koyuki" GustafssonIn 2018, he opened an online shop to sell his nicotine-free e-liquids. To get paid, he used a standard agreement with Klarna. However, after just three days, Klarna closed the checkout. The reason given was that the sale requires a special agreement.
"But it took over a week for Klarna to explain what had happened. And several more weeks to sort it out. In the meantime, the money from the sale was frozen" says Linus Gustafsson.
Contract requirements clash with legislation
The special high-risk agreement requires a retailer to present an official authorization from the authorities to sell e-cigarettes, whether they are nicotine-free products or not. This turned out to be easier said than done. Especially as Swedish law does not regulate nicotine-free e-liquids.
"And to sell regulated e-cigs in Sweden, the authorities only require a notification, so no formal authorization exists" says Linus Gustavsson to Vejpkollen.
No new agreements "for the foreseeable future"
Now it all worked out for Linus Gustafsson through a new agreement with Klarna. But only after an arduous puzzle with various papers and supervisory decisions from the municipality (it is the municipalities that supervise stores that sell e-cigarettes and tobacco).
But when he recently started another vejpshop (eliquids.se), it was time again. And this time, the door was already closed.
"Now I asked for a so-called high-risk agreement right away. But the message was that Klarna was in dispute with its card provider and that no new agreements could be relevant "for the foreseeable future". So I had to start the vejp shop with swish payment instead. Which is not optimal" says Linus Gustavsson.
The problems should be solved
According to Klarna, the potential problems that Linus Gustafsson encountered are no longer relevant. At least not when Vejpollen asks.
"We have no stop on applications or sales with e-retailers selling e-cigarettes." says Niklas Gillström, press officer at Klarna.
Tough controls on e-cigarettes
At the same time, he confirms that Klarna's requirements for retailers selling e-cigarettes are strict, in the same way as for tobacco and alcohol sales.
"Most of the segments that Klarna accepts require us to gain a deeper understanding of how merchants work in order for us to approve an application. When selling e-cigarettes, as well as through segments such as tobacco and alcohol, we follow up on how stores handle age checks and how goods are handed over to customers after an age check has been made. Some countries also require a license to sell e-cigarettes. In these cases, we also ask for the shop's license" says Niklas Gillström to Vejpkollen.
Did not receive any feedback
But Linus "Koyuki" Gustafsson is still critical of how Klarna communicates with its business customers.
"To begin with, the information I received when I entered into the agreement with Klarna did not mention this 'high-risk agreement'," he tells Vejpkollen.
And he hasn't noticed that the problems with the cardholders have been solved. At least not yet.
"In any case, they have not informed me, or any of us who are in line to open a checkout at Klarna, that the problems would be solved. I have not received any feedback at all, even though this was promised." states Linus Gustafsson.
