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 voucher shop with swish payment. It's not optimal," says Swedish e-juice maker Linus "Koyuki" Gustafsson.
For over a month, e-cigarette retailers have been experiencing problems with their payment systems. There are reports from around the world that, among others PayPal stopped all payments related to vaping products. The reason for this is that PayPal no longer considers e-cigarettes to be "ethically sustainable" for the company. Planet of the Vapes. Companies that have been affected include, among others, the British Vaping101, Creme de Vape, the essence producer Molinberry. Even the Chinese tech giant FastTech has stopped payments via PayPal.
Dispute with credit card companies
In Sweden, too, companies have encountered problems with payments. Not only PayPal, but also other credit services such as Klarna.
"It's really the credit card companies VISA and MasterCard which dictates the terms and conditions and levies an annual fee on companies dealing in 'tobacco products'. And e-cigarettes are most often categorised as 'tobacco' in international contexts - nicotine or not," he said. Niklas Linder, President of the Electronic Cigarette Industry Association, told Vejpkollen.
This has reportedly led to disputes between card issuers like Mastercard and VISA and credit companies like Klarna.
Closed the cash register without warning
One of the Swedish entrepreneurs who have experienced problems is an 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. But after just three days, Klarna closed the checkout. The justification was that the sale requires a special contract.
"But it took over a week for Klarna to explain what had happened. And another several weeks to sort it out. Meanwhile, the money from the sale was frozen," says Linus Gustafsson.
Contractual requirements clash with legislation
The special high-risk agreement requires a retailer to present an official authorisation 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 since 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 authorisation exists" says Linus Gustavsson to Vejpkollen.
No new agreements "for the foreseeable future"
For Linus Gustafsson, the situation was resolved through a new agreement with Klarna. But only after an arduous puzzle with various papers and supervision decisions from the municipality (it is the municipalities that supervise stores that sell e-cigarettes and tobacco).
But when he recently started another vape shop (eliquids.se), it was time again. And this time there was a stop at the door.
"Now I asked for a so-called high-risk contract right away. But the message was that Klarna was in a dispute with its card provider and that no new agreements could be considered "in the foreseeable future". So I had to start vejpshoppen 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
He also confirms that Klarna's requirements for retailers selling e-cigarettes are strict, similar to those for tobacco and alcohol sales.
"The majority of 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 the stores handle age checks and how goods are handed over to the customer after an age check has been made. Some countries also require a licence to sell e-cigarettes. In these cases, we also ask for the store's licence," says the Commissioner. Niklas Gillström to Vejpkollen.
Did not receive feedback
But Linus "Koyuki" Gustafsson is still critical of the way Klarna communicates with its business customers.
"To begin with, this "high-risk agreement" was not included in the information I received when I entered into the agreement with Klarna," he tells Vejpkollen.
And he hasn't noticed that the problems with cardholders have been solved. At least not yet.
"In any case, they have not informed me that the problems have been resolved, or any of us in the queue to open a checkout with Klarna. I have not received any feedback at all, even though this was promised." states Linus Gustafsson.