Posted October 19, 2020 2:49 pm by Comments

Nowadays, it’s getting more difficult to find a firearm credit card processing service, especially if you are a gun shop or an FFL dealer. You can know more about why it’s difficult for sellers to trade guns because of arms trafficking on this site here. Many banks and financial institutions online are restricting and tightening their merchant account services policies without heeding the rise of consumer demands.

As many people require firearms for their safety, governments are doing over 20 million background checks annually. At the same time, there’s an estimate of about 300 million guns and other ammunition circulating the world today.

There are also accessories to be considered, and they represent staggering numbers in terms of people who need them. Many consumers are now shopping online because it’s safer, and they don’t have to deal with a lot of questions. As many customers today are shopping online, the demand for credit card processing services regarding firearms also grows every year.

The Bureau of Alcohol, Tobacco, Firearms, and Explosives or the ATF requires dealers to have a license since the 1968 Gun Control Act was passed. This was a pain for many sellers as the environment for gun shops and dealers became heavily regulated. If you add the 2nd amendment and other regulations’ polarization, it’s becoming clear why many online payment gateways like PayPal, Square, or Stripe are avoiding the ammo industry.

However, there are individual companies online that offer Federal Firearms License merchant accounts that are offering credit card processing and payment gateways. This only requires a small fee and a simple application process. The process of firearms credit card processing is simple and easy as long as you know where to go. If you are a weapons dealer, you can check websites and companies with high ratings and ask about their services.

What is a Firearms Merchant Account?

Gun shops and dealers need credit card or debit card payment services so that customers can pay them without any hassle. Merchant accounts are considered financial products, and they are generally tied to Discover, Visa, MasterCard, and AMEX networks.

Most payment processors will manage the account on behalf of the business, and they provide monthly reports and online support whenever needed. Different types of payment processors can accept various merchants, and finding one that specializes in the firearms business is a must.

The accounts can do authorizations to transactions done online or in the shop’s location. Many retail merchants will have to swipe a customer’s credit card through a point-of-sale terminal that is generally located at the store. The transactions are then accepted into a gateway that provides a secure link between the merchant’s webpage and the payment processor.

Knowing More about Credit Card Processing

Once the transaction is initiated in the merchant location, its pathway will have to go through different financial organizations when attempting to authorize the sale. The paths that are included in the authorization are the following:

  • Merchant
  • Payment Processor
  • Merchant Bank or the acquiring bank
  • Card Association
  • Customer Bank or the Issuing Bank of the Card

The account information on many cards is captured during this authorization process. The capture is done by a payment gateway or a credit card terminal, and a secure file is then created. Know more about payment gateways here: The file is sent to the payment processing area, and this contains the transaction details and the card information.

If you pass through a firearms credit card processor, the resulting file will enter into the card’s association network by the acquiring bank. The card association determines the issuing bank, and it will then send over the secured file with the account and transaction information over an encrypted file.

The customers issuing bank will need to run several security checks to confirm this authorization request. Once the answer is established, the response is then sent to the gateway machine found in the shop. An approved transaction will show an ID number, while a declined one will have a response code. This process often takes minutes when a customer buys ammo, swipes his card, and gets a response on the computer, showing that everything has been approved and can go home with the things he bought.

It’s Not as Easy as it Sounds

For dealers, the entire process is more straightforward said than done. Most payment gateways will prohibit any transaction that is related to firearms and ammunition.

Selling ammo, guns, and accessories are becoming difficult for many due to the excessive rules and regulations surrounding this business’s nature. There are also issues with legal and financial liabilities, and traditional payment processors like Square, PayPal, Stripe, and Braintree will not work with these merchants because of the following reasons:

Fraud: Because of the vast industry surrounding ammo and guns, this is a business that is often littered with fraud. Some of the fraudulent transactions are resulting in chargebacks, and many payment processors avoid this industry altogether.

Frequent Chargebacks: The ammo and gun industries are popular because of their high return and chargeback rates. If there are alarming figures regarding chargebacks in a specific business, many low-risk payment gateways like Stripe and PayPal will not accept new merchants’ applications.

Financial and Legal Liabilities: If you are the merchant, selling your goods should never lead to issues with suing and financial liabilities, but this is not always the case at all. In the past, many manufacturers and gun sellers were involved in a legal backlash, all because of the outcome of a gun sale. Conservative banks are not staying away from this industry, and it’s essential to look for merchant accounts that you can rely on.

A Final Word

Obtaining a firearms merchant account is easy once you find the right credit card processor company. You won’t have to worry about frozen accounts, which are common with people selling ammo and guns. There are no inaccessible funds, which is the result of a frozen payment processor. You can get your revenue as fast as possible, and there are no account holds to worry about. You won’t also need to encounter the risk of losing income as your business will begin to thrive and grow when more customers are coming in to make a hassle-free transaction with you.

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