PayPal no longer accepts payments for e-cigarettes & e-liquid shops! 0

PayPal blocks accounts of e-cigarette shops

The widespread payment service provider PayPal blocks large-scale accounts of online shops that offer e-cigarettes. Specific reasons for the blockage are not given, but there are no apparent violations of rules by the shop operator. Not all shops are affected, which leads to massive market distortions due to PayPal's market power.

For several weeks now, an increasing number of cases have been known in which the payment service provider PayPal has blocked the merchant accounts of e-cigarette online shops. The blocks are due to an alleged "violation of the guidelines" but without giving specific reasons. Affected dealers assure, however, that they will comply with the applicable regulations for mail order e-cigarettes and are not aware of any violation. Even when asked, PayPal does not explain which violations should have occurred.

In addition, in individual cases and apparently only in high-turnover shops, a “legal opinion from a reputable law firm” is requested from shop operators. This is to confirm that the retailer meets the applicable legal requirements for the sale of e-cigarettes. The number of merchant accounts blocked without such a requirement and without any prior warning, however, exceeds the number of these individual cases many times over and almost exclusively affects smaller providers.

“It is worrying that such a widespread payment service provider like PayPal is blocking access to its payment service in such a non-transparent and apparently unfounded manner. According to current studies, PayPal is the second most popular payment method on the Internet and is therefore practically indispensable for online shops, ”says Michal Dobrajc, first chairman of the VdeH.

Informal talks between PayPal and the VdeH did not lead to a satisfactory result. The reason for the blocking is apparently the need to reduce possible liability risks when trading these products. Dobrajc says: “That is grotesque. E-cigarettes are a safe product that is subject to clearly defined legal regulations in Ireland and the EU that retailers adhere to. Scientists and politicians have recently called for greater efforts to educate smokers about low-risk products, of which the e-cigarette is undoubtedly one of the 95 percent less harmful substances compared to tobacco smoke. And then a powerful payment service provider decides single-handedly to effectively exclude countless low-threshold offers to quit smoking from the market. "

The obvious differentiation according to sales volume when assessing whether a shop is allowed to continue to offer the payment method or not leads to a significant market distortion. Smaller providers and new market participants suffer a clearly noticeable competitive disadvantage.

“An international group like PayPal should be aware of its market power. One obviously discriminates against a large number of providers here. Shops with high sales are tolerated, as the risk-benefit assessment is obviously sufficiently positive for PayPal. It remains to be seen whether this will stand up to legal scrutiny, ”concludes Michal Dobrajc.

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