Key facts
- Fiserv and BP are warning U.S. store owners not to sell illegal vapes.
- This is part of a crackdown by U.S. law enforcement on the $9 billion illegal vape market.
- Mastercard has warned partners about processing illegal vape transactions.
- BP, Marathon, and Valero have issued notices to their operators regarding illegal vape sales.
- Selling unauthorized vapes risks heavy fines and contract violations.
- The FDA has authorized only 45 vaping products for legal sale.
Payments platform Fiserv and service station operators including BP have begun warning their U.S. partners and store owners not to deal in illegal vapes, or risk significant penalties. These warnings come as a coalition of state and city law enforcement officials intensify efforts to clamp down on the booming market for illegal vapes, estimated to be worth $9 billion or more annually.
Backed by attorneys general from states like California, Illinois, and Arizona, along with authorities from New York City, the District of Columbia, and Puerto Rico, the crackdown has already led to actions such as Shopify banning vapes. Mastercard has also alerted its partners that it will investigate any instances of illegal vape transactions on its network.
Notices seen by Reuters indicate that BP has informed its gas station operators about Mastercard's compliance violation notices being issued to merchants for processing sales of illegal electronic nicotine delivery system products. Selling such products also violates store agreements with BP. Similarly, Marathon Petroleum and Valero have issued warnings about potential mid-six-figure fines or revocation of card processing services for a single violation related to illegal vapes.
CardConnect, a subsidiary of Fiserv, has also sent notices to its partners, stating that vape sales must comply with all relevant laws or face corrective action. The company plans to message all merchants using its services, advising them not to sell vapes lacking authorization from the U.S. Food and Drug Administration. The FDA has so far granted marketing authorization to only 45 vaping products, despite unauthorized brands being widely sold online and in physical locations across the U.S.