By Emma Rumney
LONDON, July 3 (Reuters) – Payments platform Fiserv and service station operators including BP have warned their U.S. partners and store owners not to deal in illegal vapes or risk heavy fines as a consequence, notices seen by Reuters show.
A coalition of state and city law enforcement officials in the U.S. is pressuring shippers, e-commerce platforms and payment networks in a bid to clamp down on a booming market in illegal vapes worth $9 billion or more in annual sales according to some estimates.
Backed by attorneys general from states including California, Illinois and Arizona as well as authorities from the city of New York, the District of Columbia and Puerto Rico, the crackdown has in recent weeks helped secure a ban on vapes by Shopify. Mastercard has also warned its partners that it would investigate if they enabled illegal vape transactions on its network.
Now, the documents seen by Reuters show, this stricter approach to illegal vape sales is gathering pace.
“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,” BP wrote in an undated notice to its gas station operators.
The notice seen by Reuters said that selling illegal vapes was also a violation of a store’s agreement with BP.
Gas station operators Marathon Petroleum and Valero issued similar notices warning that Mastercard or similar firms could issue mid-six-figure fines for a single violation or revoke their card processing services. Valero’s notice was dated June 17.
CardConnect, a payment technology provider and subsidiary of Fiserv, issued a notice to its partners stating that vape sales must comply with all relevant laws or risk “corrective action”.
The notice said that CardConnect would send out a message warning all merchants using its services not to sell vapes lacking authorisation from the U.S. Food and Drug Administration.
The FDA has granted only 45 vaping products authorisation to market legally, but unauthorised brands are sold illegally nationwide both online and face-to-face in locations including convenience stores and bodegas.
Fiserv, BP, Marathon and Valero did not immediately respond to requests for comment. Friday was a public holiday in the United States.
(Reporting by Emma Rumney; Editing by Joe Bavier)