Introduction
There are many reasons why firearm payment processing is known as high-risk. One of the most important things that you should know is that, firearms connected business should follow the different forms of vast regulations which starts from the state level to federal level. Besides all of that, selling firearms or connected accessories can expose your business to different kinds of fiscal and legal liability. Add-on to the regulatory changes, firearms merchant services are known as high-risk in the payment processor. Now, let us look at some of the reasons for the same. The first and the foremost reason is that of likelihood of chargebacks. The ammunition and gun industry tends to have more chargebacks as compared to other companies or industries. Then, comes the reason of high possibility of fraud.
Liability – Legal & Financial in Nature
Weapon buying or purchases that is paid with a debit or credit card, cannot always be traced back definitively to the buyer, which in turn makes the industry a very appealing target or soft target for fraudsters. Besides all of that, several acquiring banks mostly do not service guns businesses to avert being linked with disputes pertaining to gun law or over gun purchases. Then, comes the reason of high-ticket sales in which the average or common cost of a firearm can differ from several hundreds to 1000 of dollars. Besides all of that, a payment dispute of that size can affect your cash flow, enhancing the likelihood of your business defaulting on payments. There are many benefits of a gun-friendly credit card processor. Let’s have a look at it.
Merits of Credit Card Processor that Are Gun-Friendly
It can happen that the businesses working in other industries can turn to payment service providers like Square, Stripe or PayPal – for processing of the credit card, but these firms do not extend their services to firearms businesses. That said, the firearms businesses should depend on traditional payment processor in order to accept the payments. But the processors who are unfamiliar with the industries of firearms can stop your working or operations more than they can help. There are several issues that the firearms merchants most of the time encounter when they partner with a payment processor unequipped to meet the needs of the industry. The first and the foremost issue is of account closure. One of the things that you should know is that, your merchant account can be closed by the payment processor without any warning, if they get it that it is being used to sell the firearms or connected accessories. Next, is frozen funds issue, in which if your ratio of chargeback is very high – a common occurrence in the firearm industry due to high transactions being processed less frequently – so your funds can be frozen for around 6 months. Cash flow problem and loss of income are other related issues.