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Small gun retailers, do you ever feel like you’re missing out on some kind of secret that everyone else is in on? You’re hemorrhaging money with every sale from payment processing fees, struggling to make a profit, but you just don’t see another solution.
It’s not just you. Many other gun retailers are struggling with the same thing, and even the big gun retailers likely had to deal with overcharged payment processing fees at one point. The difference is that they figured out what the problem is and how to fix it — and now you can, too.
The truth is that most traditional banks and lenders shy away from firearm payment processing because it’s considered a “high-risk” merchant account. There is a higher risk of fraudulent purchases and constantly fluctuating regulation on firearms. Because of this, firearm accounts are often rejected or accepted but only with exorbitant payment processing fees. Big processors like Square and PayPal even explicitly prohibit firearm sales.
Part of this makes sense. There is a lot that goes into payment processing for gun retailers, especially when there’s an online shop involved. You need secure payment gateways, an understanding of all gun regulations and data privacy regulations to ensure compliance, good charge management and risk management strategies that are structured for high risk merchants such as firearm dealers.
Still, a gun retailer needs to be able to make a profit, which can be difficult when they’re overcharged with processing fees. So what’s the solution? Knowing the current trends of the firearm payment processing world may help to get on top of this.
The good news is there are payment processing servers who are equipped to work with high risk merchants and may even specialize in firearm payment processing. When searching for your payment processor, instead of going for the biggest names who may be intransigent, consider seeking out payment processors with high risk merchant services.
The rise of eCommerce has made a significant impact on the gun retail industry. With so many purchases made online, consumer data privacy and secure payment portals have also become an important part of payment processing. Because of this, many gun retail payment processors have begun using blockchain to encrypt consumer data and protect it from the reach of cyberhackers. Payment processors must also have protections in place for things like chargeback or fraud cases. One way to do this is with EMV chips, which generate one-time, randomized encryptions for heightened security.
While federal discussions of firearm regulations seem to be constantly ongoing, some states — such as California — have begun to require firearm merchants to do business under a specific merchant category code (MCC). Other states — such as Texas, Florida, and West Virginia — have blocked the legislation that requires this code. Firearm friendly payment processors are thus working to stay compliant on the fluctuating regulations from state to state, especially where eCommerce is concerned and gun dealers may sell to multiple states.
So with all these recent trends, and all the challenges that gun retailers face when it comes to firearm payment processing, how do you set yourself up for success? How do you avoid the exorbitantly high payment processing fees or even being outright denied by the payment processors you apply for? Here are a few tips:
At the end of the day, you need payment processing solutions you can trust. BKW Servicing works with high-risk merchants like gun retailers regularly, providing compliant and cutting edge firearm payment processing. We work with over 20 banks and processors, which allows us to customize the perfect payment processing solution for your specific business. Contact us today to learn more about how we can help you break through all the rejections and high processing fees.