In order for a business to be truly successful, it has to provide various payment options to customers. Nowadays, digital payments are considered more convenient than cash transactions, hence becoming absolutely essential for e-commerce businesses.
Most firearms dealers fail to provide such services to their customers simply because payment credit card processors refuse to collaborate with high-risk companies. Nevertheless, some gun-friendly credit card processors are willing to provide merchant services account for firearms businesses at affordable rates.
The following guide explains the most common challenges firearms vendors face as well as the process of setting up a merchant account.
The challenges of firearms dealers
Weapon dealers cope with numerous challenges when it comes to finding a credit card processing company. Most of the processors are reluctant to handle transactions for firearms stores due to the high level of risk, referring to the great likelihood of fraud and chargebacks. The high-risk nature of such businesses is what makes processors unwilling to collaborate with arms dealers, not the type of products they sell to customers.
Another challenging aspect for arms vendors is the process of online selling, which differs from conventional internet sales. Although firearms are legal to be purchased online in the USA, these aren’t directly shipped to customers. The guns are supposed to be firstly shipped to a licensed arms dealer from whom the customer is expected to get the weapons they’ve ordered over the internet.
In terms of payment, the transaction process is handled in the same way as in the case of traditional online sales. Consumers are expected to pay for the weapons to the vendor they’ve purchased the products from, as well as pay for a transfer fee upon picking up the firearms if requested by the dealer that received them.
What is a merchant account?
In order for a business to be allowed to process electronic payment transactions, it’s supposed to set up a merchant account. Without such a bank account, businesses are incapable of accepting debit and credit card payments. Therefore, gun dealers are expected to partner up with a payment processor in order for the transactions to be properly settled. Read more about the way in which merchant accounts work.
For instance, brick-and-mortar businesses that are unwilling to introduce electronic payments need no merchant account, solely a deposit bank account. In contrast, e-commerce companies are obliged to set up such an account, as it’s the only way to charge for their goods or services.
Moreover, the journey to obtaining a merchant account is rather demanding, involving a myriad of eligibility criteria. The providers consider the potential risk of credit card fraud, the business history and years of existence in the respective industry, the credit history of the owner, as well as the previous experience with merchant accounts.
As previously mentioned, gun sales involve a tremendous risk of fraud, but it doesn’t necessarily mean that no processor would be willing to partner up with such company owners. Some processors are disposed to partner up with firearms dealers in return for higher fees. After the client proves to be reliable, the fees will most likely be reduced.
Keep in mind that the expenses for internet merchant accounts are much higher due to the greater risk related to online payments. The following link, https://www.forbes.com/sites/louiscolumbus/2020/05/18/how-e-commerces-explosive-growth-is-attracting-fraud/#1cdd5d546c4b, explains how e-commerce growth has increased the likelihood of fraud.
Finding a credit card processor
In order to find an electronic payment processor, gun dealers are advised to compile a list of all gun-friendly providers, which have no problem to support weapon sales. Afterward, they are supposed to ask for quotes in order to compare pricing models.
In addition, it’s paramount for the quotes to disclose all fees involved in the process so as to choose the most affordable pricing model. Anyhow, always be prepared for hidden fees, as most processors fail to list certain expenses in the estimate. The most common ones included in estimates are application, setup, per-transaction, cross-border, monthly, and rental credit card terminal fees.
Finding a gun-friendly credit card processor is challenging but feasible.
Be prepared to pay higher fees in return for offering an electronic payment option to customers!