A growing enforcement push against illegal vaping products is prompting major payment processors and fuel retailers to put their U.S. business partners on notice: stop selling unauthorized vapes or face serious financial consequences.
Payments platform Fiserv and service station companies including BP have sent warnings to their partners and store operators, according to documents reviewed by Reuters. The notices caution that dealing in illegal vaping products could result in heavy fines or other penalties.
The pressure is coming from a broad coalition of law enforcement officials at the state and city level. Attorneys general from California, Illinois, and Arizona, along with authorities from New York City, the District of Columbia, and Puerto Rico, have been pushing shippers, online marketplaces, and payment networks to choke off what some estimates put at a $9 billion-plus annual market in illegal vapes.
That effort has already produced results. E-commerce platform Shopify recently banned vapes from its platform, and Mastercard has told its partners it will investigate any transactions on its network that involve illegal vape sales.
BP’s warning to its gas station operators referenced Mastercard’s actions directly. “BP has learned that MasterCard has begun issuing… compliance violation notices to merchants throughout the industry for processing sales transactions for illegal electronic nicotine delivery system products,” the company wrote in an undated notice. BP also reminded operators that selling illegal vapes violates their agreement with the company.
Fellow fuel retailers Marathon Petroleum and Valero sent out comparable warnings. Those notices spelled out that Mastercard or similar companies could impose fines reaching into the mid-six figures for a single violation, or cut off card processing services altogether. Valero’s notice was dated June 17.
On the payments side, CardConnect — a payment technology company that operates as a subsidiary of Fiserv — notified its partners that any vape sales must comply with all applicable laws or face “corrective action.” CardConnect also said it would be sending a message to all merchants using its services, instructing them not to sell vaping products that have not received authorization from the U.S. Food and Drug Administration.
The FDA has approved only 45 vaping products for legal sale. Despite that narrow list, unauthorized vape brands are widely sold across the country — both online and in person at locations such as convenience stores and bodegas.
Fiserv, BP, Marathon, and Valero had not responded to requests for comment at the time of reporting. Friday was a federal public holiday in the United States.
