Merchant Account for Firearms, Gun Shops, Weapons Dealers

Even during late 80s trade settlements were primarily done using cash. But in the present scenario, it is tough to run a business with hard and fast payment terms. Even the practice of getting a cardholder signature in the card slip after a swipe is not followed these days. E-commerce constitutes an important channel for selling goods and services. While selling through the website, the risk is high since the seller does not even see the face of the buyer. Business houses constantly feel the need for a reliable Gateway setup.

Online Merchants, Ecommerce, Card Not Present

Only in a few countries, it is legal to buy these weapons online. In most countries, such trading is termed as Illegal.

Banks and financial institutions eagerly take risk- free online businesses as their customers. The major reason is that serving these accounts incur only low costs. Besides the other income, they earn from POS related services is an attraction. Even for businesses which are slightly riskier, multiple underwriting banks come to rescue. These banks help in vetting your business to get a merchant account easily. There are payment gateways which help the online merchants to process payments using any type of card- Visa/Mastercard/Discover/Amex. The payment processing vendor ensures data security of the details entered in the terminals.

For most businesses the financial institutions offer various features like

1. No Application fees

2. No setup fees

3. Lowered/waived fees, rates

4. Faster Application processing

There is a concept called rolling reserve in the scenario or merchant account. This refers to an amount which the online merchant has to maintain with the payment processing vendor/bank. The purpose of this reserve is to eliminate the risk of huge amounts of chargebacks from cardholders. Where the business model has a small average delivery time or billing cycle, the bank can even waive this reserve. In such cases, bank offer merchant accounts with no rolling reserve requirement. This frees the reserve amount being locked up. The business firm which enjoys such a waiver has more free funds for usage.

How friendly the banker/payment processing vendor depends on the business/Industry of the customer. The various waivers and concessions circle around High risk vs low risk of the goods and services dealt with.

In the case of online weapon sale, there is a high risk of huge chargebacks. Banks basically fear this risk. Businesses like gun shops or weapon dealers have typically a larger delivery time. The payment cycle is too long. Besides getting all the above-listed sops for such merchant accounts from banks is very difficult.

Denied /shutoff/closed by other credit card processors like First Data, Paypal Square, Stripe

Normally merchant accounts face the risk of online frauds. Issues like ‘card not present’ has to be dealt with frequently. Another issue is customers prefer to walk away instead of waiting for a long time. Hence merchant accounts need an accurate and faster ACH processing/check processing. When even ordinary businesses face such issues, getting a merchant account itself is tougher for a few other types.

At times businesses face the difficulty of merchant account request being denied by banks. The basic reasons for such denial are:

1. Low credit rating

2. When the business involves huge risk such as firearms, gun shops, weapon dealers.

3. When there are tax liens

Dealing with firearms and weapons require businesses to undergo difficult underwriting norms. Practically underwriting banks try to reject these applications. Few payment processors do not offer merchant account to such businesses as a part of their policy.

Startup/ New Business OK

All the below factors make it tough for startups/new businesses to get a merchant account easily. Especially when the nature of business involves more risk -for example, weapons dealing.

The major issue faced by businesses while requesting a merchant account is credit history. When it is a startup/ business newly started, there would not be any history. Nowadays even the startups are technologically advanced. They provide iPhone/Droid mobile Apps for the customer to place online orders. These startups even sell using their own and third-party sites. The customer simply uses the virtual terminal in these sites to make payment.

Banks are interested in providing merchant accounts to even business houses which had faced card-fraud issues. The irony is that they are reluctant towards new businesses without a proper credit history. As a result, the rates vary by startup vs History. When high rates are charged for new businesses, they find it difficult.

Established business houses have regular customers who consent for charging their cards on an on-going basis. These customers readily give their one-time consent for charging the card whenever goods are supplied. The customers easily give such consent because of the trust and long-time experience. More established firms have a huge volume of transactions in their merchant accounts. Their customers buy frequently and buy for large amounts. As a result, payment processing vendors/banks offer rewards for cardholders. This type of recurring billing (or) Retail/card present/signature transactions will be poor for startups. They do not have the choice of ignoring customers based on criteria until they get established.

Domestic and Offshore options

When it comes to weapon selling online sales cannot be restricted to geographies. Domestic options have lower rates and better security. The situation will be more complex when an international customer raises a dispute. It would be better if the payment processing vendor can withhold the money until the chargeback claim is resolved. This process of check drafting may not be offered by all payment processing vendors/banks. In normal ACH processing, the amount is automatically refunded to the customer.