Thursday, June 11th, 2020
Gun sales went up in March—amid the COVID-19 pandemic— for some reason, which meant more revenue for firearm retailers.
“March firearm sales went up 20 percent,” according to Steve Burnsides, the owner of Brown Loans. “For the first time, I’m seeing many newbie firearm owners walk into my store.”
Mr. Burnsides ties this increase in firearm purchase to Coronavirus. He believes Americans were getting ready for insecurity, which was viewed as a ripple effect of the impacts of the virus, particularly unemployment.
The Vital Role of a Gun Merchant Account
Whatever it was, it meant gun sellers had to deal with many new customers with different payment expectations.
And of course, credit card enthusiasts led the group. To process customer credit card payments, a retailer must own a firearm merchant account. A merchant account allows a gun seller to take all credit card payments made via a Point-of-Sale, card terminals, and other payment gateways.
The account is linked to an online store so that each transaction initiated via the payment terminals is processed from the acquiring bank to the card network, whether Visa, MasterCard, American Express, etc.
But the road to acquiring one isn’t as smooth sailing for reasons we are about to discuss. Yet the ability to take card payments opens new opportunities and quick business for a gun merchant.
Guns are Considered High-risk which Poses a Significant Challenge
And because guns aren’t your ordinary toy, they are classified as high-risk and highly regulated to maintain public safety.
All business merchant accounts come with a merchant category code (MCC). A gun-seller receives a code for a high-risk account linked to firearms.
This high-risk classification is applied to sectors that are prone to excessive chargebacks and fraud, and those that are regulated or have age restrictions. And the gun retail industry has a background of legal problems and excessive chargeback, so they are seen as risky.
As a result, traditional banks won’t support gun-selling merchants, even though the sector billion rakes in billions of dollars every year.
So who supports this flourishing industry?
Gun Friendly Credit Card Processors
Relatively new players like Best Payment Providers US who understand high-risk processing will onboard your gun business as long as it is perfectly legal.
First, the business owner must obtain a Federal Firearm License, the legal permit for gun sales in the US. It’s also essential to comply with all local and national regulations.
Next, you will need to get these ready upfront.
- Legal government ID
- Employer Identification Number (EIN)
- Social Security Number (SSN)
- Three months of the latest payment processing statements
- Three months of the latest bank statements
- Voided check
Some service providers will also check your chargeback ratio to determine whether you are a fit candidate.
You’ll need an active web store with crystal clear Terms & Conditions. And to increase your chances, maintain a desirable credit score, and pay out all unsettled debts.