UPDATE: Mastercard Replies to NACS Request for Clarification on ENDS Product Fines
Mastercard is ‘temporarily pausing’ assessments after NACS sent a letter raising concern that network fines do not match FDA’s federal enforcement standards for illicit nicotine products.
Jul 23, 2026 | 3 min read
NACS, along with cosigners last week, sent letters to Mastercard and Global Payments regarding violations and fines the networks have been issuing to retailers selling any electronic nicotine delivery system (ENDS) product outside of the FDA’s approved list of 45 products, despite a change in FDA guidance in May.
NACS highlighted that while premarket authorization for ENDS is required under the Federal Food, Drug, and Cosmetic Act (FFDCA), the FDA does not strictly enforce such a requirement, and instead opts to exercise its enforcement discretion as to certain products. Accordingly, it is not correct that all “unapproved ENDS items” are currently subject to enforcement action by FDA.
On July 27, Mastercard replied to NACS, stating:
“Our May 2026 update to acquirers simply reminded them to be aware and mindful of U.S. Food, and Drug Administration (FDA) and other jurisdictions’ requirements regarding legal vaping and ENDS products and implement robust controls.
Mastercard’s compliance programs are designed to ensure adherence to applicable laws and our network standards. It is with that in mind – and in light of additional information being provided to Mastercard regarding the acquirers’ specific merchant customers – we have decided to temporarily pause any assessments to provide customers additional time to execute their remediation plans and ensure compliance.”
“We’re encouraged that Mastercard seems to be reevaluating their approach and temporarily pausing assessments in light of recent regulatory guidance from the FDA,” said Margaret Mannion, NACS director of government relations. “We’re hopeful that they will make changes to match current federal guidance so responsible retailers aren’t subject to multiple, conflicting standards.”
Earlier this month, payments platform Fiserv and c-store operators, including major oil brands like BP, warned their U.S. partners and store owners that they could face heavy fines by credit card networks for selling any ENDS item not expressly approved by FDA, Reuters reported, even though those warnings conflict with FDA guidance.
Marathon Petroleum and Valero issued similar notices in June warning that Mastercard or similar firms could issue mid-six-figure fines for a single violation or revoke their card processing services.
According to the report, a coalition of state attorneys general in the U.S. is pressuring shippers, e-commerce platforms and payment networks to clamp down on the illegal vapes market—worth $9 billion or more in annual sales, according to some estimates.
The AGs stated that “combating illegal e-cigarette sales requires proactive efforts between government entities and credit card and payment processing companies to stop these unlawful transactions.”
The FDA has granted only 45 vaping product authorizations to date.
