MasterCard’s revised policy to comply with US FDA’s tobacco products regulations

As a consequence of recent changes in US FDA’s authority over tobacco products, including vaping products, MasterCard revised their policy for vaping businesses to include Business Risk Assessment and Mitigation (BRAM) compliance program on August 2016. A change that may be detrimental to small businesses.

Last week, MasterCard sent out an email to vaping companies, updating what the e-liquid vendor onlyeliquid.com judges an “anti-vaping policy” with companies that process their cards:

  • A $500/year registration fee,
  • “Adult Signature Required” and “Adult Signatures on delivery” features.

In response to age restrictions imposed by the federal and the state laws, MasterCard enables signature when ordering and on delivery with the “adult signature” functions. It does not only set a de facto age limit to 21 (even if some states allow the 18-20 to vape), this new regime also sets shipping costs at a higher rate than with a normal transaction. With the “Adult Signatures on delivery”, USPS, UPS, and FedEx also require the presentation of a valid government issued ID to sign on delivery.

With these measures, MasterCard adds to an existing complicated situation, especially for the smallest vaping businesses that are facing the elevated costs of pre-market authorizations imposed by the US FDA to distribute their products.

There are only few chances that other payment methods escape from this regulation, according to the source. Hence, American Express and Visa credit cards are supposed to follow the same billing procedure and add their costs and constraints to the current procedure launched by MasterCard.

A petition has been released to express disagreement with MasterCard’s policy and to ask for a reversion.

 

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