Australia Post has become the chief courier service for illicit tobacco, with payments provided by a raft of companies including PayPal, Visa, Mastercard, Klarna, Stripe, Link, and CBA and ANZ BSBs.
Australia Post chief executive Paul Graham said in response to a question about the service being ‘a very big courier of illicit tobacco’ that “I won’t challenge your assertion that we are involved in that movement.”
By Michael Sainsbury, Senior Business Correspondent
Illicit tobacco and vaping products in Australia are increasingly being marketed and purchased via online payments platforms, as law enforcement agencies across the country intensify crackdowns on physical stores and wholesale distributors.
Australia Post is providing the delivery service for the illegal trade that has punched a $78.5 billion hole in the budget since 2020-2021.
PayDay News understands that customers for illicit tobacco had been picking up parcels at businesses registered as Australia Post agents – including pharmacies.
Traders of contraband have shifted strategic operations to websites, social media and encrypted messaging apps including Instagram accounts, Telegram channels and WhatsApp ordering groups enabling wider reach and rapid pivoting when stores are shut down.
“I was in Queensland in November last year and I approached nearly everyone I saw smoking illicit products, which is everyone – no one smokes proper cigarettes in country Queensland,” an Australian retailer who did not want to be named for safety reasons told PayDay News.
“Every one of them was ordering them online or via an SMS, via a phone number, there are no shops selling products in rural Queensland at all.
It’s all done online, and these guys, the crooks, are putting posters up on lamp posts with a QR code for you to find their websites to buy cheap smokes.”
The online trade is also being enabled by global digital networks such as PayPal and Stripe, some of Australia’s biggest banks via BSBs, and Australia Payments Plus NPP platform via PayID.
PayDay News has evidence that the Commonwealth Bank, NAB, ANZ and Newcastle Permanent are also being used for payments via BSBs and NPP, as well as Stripe, Klarna and Link – and plentiful options to use Visa, Mastercard and PayPal.
One website suggested that customers use “Australian cards.”
Adding the extra sting, Australia Post has been brought into the burgeoning group of companies facilitating the illicit trade estimated to be worth $10 billion.
In a Senate hearing in December last year Australia Post chief executive Paul Graham said in response to a question about the service being ‘a very big courier of illicit tobacco’ that “I won’t challenge your assertion that we are involved in that movement.”
He said that the challenge Australia Post had is that it is almost impossible to detect “and we are not privy as to what the contents of packages are.”
Graham said that Australia Post has been working with the Australian Federal Police, leading to some arrests.
“I think that probably is the tip of the iceberg, unfortunately, but it is impossible for us to detect unless we were to put in very expensive machines to try to detect that.
For a business that moves two billion parcels a year, that would be almost statistically impossible,” Graham said.
With bank accounts clearly provided on many sites for payment, it is unclear how rigorously banks have been following the know your customer rules set out by money laundering agency AUSTRAC.
This digital pivot reflects the lucrative price gap between legal cigarette prices (often over $50 per pack) and the deeply discounted contraband sold via web and social channels at $10–$15 a pack or less.
Web analytics tools show substantial traffic to major sites advertising cheap tobacco products thecornerstoreau.com, cheapsmokesonline.com, thecornerstoreau.com, supercheapsmoke.com.au and vapewarehousesaustralia.com are among the most visited, each drawing thousands of monthly visitors seeking cartons well below legal retail prices.
For example, thecornerstoreau.com is estimated to receive roughly 27,000 monthly visits (~6–7 k per week), while cheapsmokesonline.com draws an estimated 10k–20k visits monthly — traffic that suggests these domains have become major entry points for consumers turning to the illicit market.
These sites typically list cigarette cartons for $120–$180-equivalent, sharply undercutting legal prices.
Illicit vape and tobacco sellers have also shifted onto encrypted messaging platforms such as Telegram, where dozens of channels openly advertise products to Australian buyers.
Channels including Australia IGET Shop (@AustraliaIGETS), IGET Vapes Australia (@igetvapesshop1) and Just Vapes Australia (@justvapeaustralia) promote disposable nicotine devices such as IGET Bar and IGET Legend vapes and offer bulk deals shipped nationwide.
Alongside them are channels selling cigarettes and loose tobacco, including Australia Cigarettes (@Cigarettesaus), Cigarettes/Tobacco for Sale USA & Australia (@cigarettestobaccoforsale) and groups such as BonsBoutique Vapes, Cigarettes & Tobacco, which openly advertise cartons of imported brands and duty-free tobacco.
Some of the larger channels have thousands of subscribers and advertise wholesale prices, delivery and payment through bank transfer or cryptocurrency.
In early March 2026, state authorities in New South Wales leveraged strengthened tobacco control laws to issue 105 temporary closure orders on premises selling contraband cigarettes and illegal vapes, seizing hundreds of thousands of illicit tobacco products in the process.
These actions form part of a broader multi-jurisdictional effort that includes federal interdictions of cross-border shipments of illegal stock at ports and freight facilities.
Yet enforcement officials acknowledge that online marketing and messaging networks have become deeply embedded channels for illicit tobacco distribution, requiring coordinated digital enforcement as well as traditional seizures.
This digital ecosystem has been described as part of a “whack-a-mole” problem where authorities seize stock or close retail premises, sellers reappear with new domains and social pages, often guided by the same operators behind the biggest online storefronts.
The retailer said that any payments companies were “too scared to shut them down”.
“These criminal gangs have got power now.
They’re too embedded into the market.
You go into one of these shops, and they’ll find out who you are, find out what your kids’ names are, and threaten your family, right?
No one wants to get involved in that,” he said.
The proliferation of online channels complicates enforcement, with investigations now tracking domain registrations, social traffic and encrypted chat groups as part of broader strategies to disrupt supply networks long after physical store closures.
“The government can do two simple things, but they won’t – cut excise by half and legalise and regulate vapes.
The vapes will hurt the crooks by 50% if they legalise them tomorrow and they will have a new revenue stream,” the retailer said.
In the instore Point of Sale environment, PayDay News has previous reported that illegal tobacco merchants are using terminals from a range of providers including banks and the growing army of mainly US-owned payment service providers including Shift4, Square, Fiserv’s Clover and local groups Zeller and Tyro Payments.
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