Gun stores can’t always rely on standard payment processing services to accept credit cards. If you own a firearms business, you will probably need to find a company that offers high-risk merchant accounts and gun-friendly credit card processing.
As a gun merchant, you face many of the same challenges as businesses that work in other “high-risk” industries. Businesses that need high-risk merchant accounts often operate in legal industries. They include credit repair companies, online pharmacies, CBD sellers, private airlines, and payday lenders.
Bankcard provides gun-friendly credit card processing and other services that can help your business succeed. The payment processor also works with other high-risk merchants, so it has plenty of experience handling complicated situations without charging exorbitant fees.
Why Do So Many Gun Dealers Need High-Risk Merchant Accounts?
Most firearms sales are perfectly legal because adult citizens of the U.S. have Second Amendment rights that allow gun ownership. Since that’s the case, you might wonder why so many payment processors require high-risk merchant accounts for firearms sales.
The reasons differ, even among gun-friendly payment processors. You will likely find that the following reasons make your store or ecommerce site seem riskier to payment processors.
Gun Laws Are Complicated
Whether you process gun and ammo sales in person or online, most payment processors will consider you a high risk because laws vary so much by state. In some states, such as California, Colorado, and Connecticut, you can only sell handguns to people with permits. Other states, including Alaska, Iowa, and Kentucky, don’t have permit requirements for buyers.
You might not think this sounds very confusing because you probably live in the state where you sell firearms. Payment processors, however, often serve national and international clients. Many of them find it too intimidating to become gun-friendly credit card processors.
Laws become even more complicated when you consider how quickly they can change. In most places, it only takes one legislative session for the state to change its law. It probably won’t happen, but Alaska could choose to require handgun permits by the end of the year. The possibility, however small, looks too risky to most payment processors.
Are Payment Processors Liable?
What happens when a payment processor gives you a firearms merchant account, and you accidentally don’t follow state and federal laws? Are merchant service providers legally responsible when a business doesn’t have a federal firearms license (FFL) from the Bureau of Alcohol, Tobacco, Firearm, and Explosives (ATF)?
Most credit card processors don’t want to find out, so they would rather avoid the firearms industry.
Criminals Could Use Credit Card Fraud to Buy Guns
Credit card fraud increases the risk of lost payments and chargebacks, two things that payment processors do not want to handle. Unfortunately, criminals can use stolen credit cards to purchase firearms for people who cannot legally own them.
In 2021, the ATF busted a crime ring for conducting “straw purchases.” A straw purchase is when someone purchases a legal product through illegal means. In this case, a group of 10 people in Detroit faced federal charges for buying guns with stolen credit cards.
Gun-friendly payment processors know that crimes like this don’t happen often and that most firearms dealers do everything possible to confirm customer identities before selling weapons. While there is some risk for gun-friendly credit card processors, it’s an acceptable level.
Popular Gun-Friendly Payment Processors
Payment gateways will almost always give you reliable gun-friendly credit card processing that limits risk. Payment gateways simplify your payment processing by giving you and your customers a virtual terminal that works like in-store credit card processing. With a payment gateway, you get secure firearms credit card processing with a lower risk of chargebacks or canceled charges.
Some gun-friendly payment processors to consider include:
Unfortunately, you can’t use Stripe, Square, or PayPal because the companies refuse to process payments for gun shops. Some of these companies used to work with gun brokers, but decided to stop because of pressure from the public. Apparently, some of their clients didn’t like that they offered gun-friendly payment processing solutions. Eventually, they faced enough pressure that they canceled accounts with gun sales.
The good news is that Bankcard partners with Maverick and PaySafe, so you have a reliable way to process payments without worrying about hidden fees.
What To Look for When Choosing a Gun-Friendly Payment Processor
The specific features that you need from a gun-friendly payment processor depend on where you sell firearms. More likely than not, you want to accept credit card payments. When it comes to in-person payments, 31% of consumers choose credit cards, and 34% choose debit cards. Of course, nearly everyone uses credit and debit card accounts for online shopping. You can, however, also accept ACH payments, which come directly from the buyer’s bank, without relying on paper checks.
Features of an Excellent Gun-Friendly Payment Processor
Some of the features to look for when comparing gun-friendly payment processors include:
- Low high-risk credit card processing fees.
- Standardized fees so you’re never surprised by a higher-than-usual cost.
- Customer support for point of sale (POS) transactions.
- Support for online sales.
- Mobile payments support so you can sell items at gun shows and other events.
- Guest checkouts that don’t force your customers to create accounts.
- Fast payment processing.
Avoiding High Fees for Gun-Friendly Credit Card Processing
Gun-friendly credit card processing can come with high fees, especially when you choose a service provider that wants to take advantage of your business’s “high risk” status to charge more than necessary.
Since there aren’t many gun-friendly credit card processors, you don’t have to do much work to find an affordable option for your business. Since Bankcard and Authorize.net stand out as the two most popular options, you can save yourself some time and effort by comparing their fees and payments. You will find that Bankcard has lower costs in almost every category.
Setup fees get you started with your gun-friendly payment processor. Authorize.net charges $49. Bankcard charges $0. You can even get a free EMV terminal or mobile credit card reader from Bankcard.
Since so many consumers prefer using credit cards, you want a payment gateway that can act as a virtual terminal. Bankcard doesn’t charge a monthly fee for processing credit cards. Authorize.net charges $25 per month.
Payment processors typically make money by charging a small amount for processing credit card payments. Bankcard charges a flat fee ($0.08) per transaction. Authorize.net charges $0.30 and 2.9% of the purchase price. That means you lose 2.9% of every sale you make. It might sound like a small percentage, but it adds up quickly.
Your monthly gateway fee covers the security features you need for a high-risk merchant account. You pay $10 per month to use Bankcard gateway. Authorize.net charges you $25 per month. That comes to an extra $180 per year.
Bankcard and Authorize.net charge the same prices for cancellations and gateway transactions. Regardless of which gun-friendly payment processor you pick, you will pay $0.10 per gateway transaction. Cancellations don’t cost anything from either processor.
What If You Sell Guns and Ammo Online?
Selling firearms, ammo, and related products online can seem complicated. A lot of questions come up, such as:
- Can I ship guns to buyers?
- How can I ensure that a buyer meets my state’s gun law requirements?
- Do the laws differ when I sell antique guns online?
Obviously, you don’t want to violate any federal or state gun laws, so these are serious topics to consider before you start selling products online.
As someone who owns a gun store, you almost certainly have an FFL that lets you ship firearms. If you were an unlicensed individual, you couldn’t ship guns to anyone. Instead, you would have to ask someone with an FFL to complete the task for you. That’s federal law, so it applies to every gunbroker regardless of location.
Here’s the catch, though: you can only ship guns out of state to a licensed FFL dealer. You can’t send the package across state lines to an individual without the right license. That would make it much too easy for criminals to buy guns online without revealing their real identities.
When you send an order, you will need to get a copy of the buyer’s license or the license of a dealer handling the delivery. Then, you can use your gun-friendly payment processor to get paid and ship the gun to the address on the license. You can only send the weapon to the address on the license.
If an unlicensed individual wants to buy a gun from you online, they could make arrangements with a store or licensed dealer within their state. It’s a little inconvenient, but it helps ensure that you follow the law and prevent weapons from falling into the wrong hands.
For the most part, you don’t need to worry about these requirements when you ship an antique firearm. You might still need gun-friendly credit card processing, though. After all, you can’t expect the typical payment processor to know the difference between an antique and a modern firearm.
Bankcard specializes in helping high-risk merchants thrive. While low-risk providers worry about working with gun sellers and other high-risk industries, Bankcard offers flexible solutions, including payment gateways, ACH processing, and gun-friendly credit card processing.
Can You Sell Guns Directly to Customers Through Your Website
As long as you follow federal and state laws, licensed dealers can legally sell guns directly to customers through your website. Obviously, you need a gun-friendly payment processor to accept payments.
Realistically, it makes the most sense for large stores to sell guns online. Bankcard does more than serve as a gun-friendly payment processor. You can also use your payment gateway API to integrate with tools used for inventory management and resource management. That way, you get a streamlined approach to ecommerce that helps you keep all of your valuable information in one place.
Small stores can also benefit from gun-friendly credit card processors. You might not want to invest in creating and managing an independent ecommerce site, though. Instead, you could use an established site like GunBroker to connect with buyers. You might need to charge slightly higher prices or sacrifice a small percentage of your profits, but you get the convenience of relying on a system someone else maintains.
Even if you ultimately want to sell all of your firearms, ammo, and other merchandise through an independent ecommerce site, it could make sense for you to start with a hosted system like GunBroker. As you build your business, you can explore opportunities to transition to a separate site.
You could also manage an ecommerce store while using online auction sites. Your website could even serve as a way for potential customers to browse your products and services. When they decide to buy, your site can send them to a larger website to complete the sale. It’s not very different from websites that redirect shoppers to Amazon.
Bankcard Stands Out as an Excellent Gun-Friendly Payment Processor
Bankcard excels at giving business owners flexible features that match their unique needs. If you need a gun-friendly payment processor that works quickly and charges fair rates, Bankcard is probably the right option for you.
Learn more about how Bankcard can help your business thrive by getting in touch today.