Gun Control Debate: Can Credit Card Companies and Card-Issuing Banks Help Unite to help Curb Gun Sales?

Aug 15, 2018

U.S lawmakers have failed to hold the fort for American citizens—shootings have continued in different states, and Mr. Andrew Ross Sorkin, a New York Times columnist, thinks the credit card companies that handle the payments for firearms could help control gun sales?

The business analyst suggested that it would be an excellent idea if finance industry masters, e.g., major credit card companies (Visa, MasterCard, and American Express); leading Card Processors like First Data; and big banks like Wells Fargo and JPMorgan Chase would set new regulations for firearm sales in America. “Together, these firms have more power over the firearm industry than any policymaker. All they need to do is take a stand.” He wrote

By saying no to processing gun payments, or rejecting firearm merchant account owners, these card companies could make it much difficult for citizens to get guns — unless they’re making the payments in cash, Andrew suggested.

On the opposing end of this idea is James Wester, research director for international payment trends at International Data Corporation, who feels that the thought is not as realistic as it is intriguing.

Why Credit Card Firms Are Reluctant Or Incapable of Curbing Firearm Sales

According to Wester, payment giants like Visa and Mastercard form business rapports with retailers and lay down rules to oversee the use of their cards, but do not support or turn down individual payments for specific products. Instead, they offer payment processing services to any sale a merchant makes.

In other words, if you purchase a from a gun-dealing store like Walmart, a card company like Visa, or a card-issuing bank (e.g., Chase and Wells Fargo) would view the transaction as a purchase from Walmart and not primarily a firearm sale.

And Wester thinks this tough decision to quit doing business with gun-selling merchants is why card companies won’t unite to curb gun sales.

What measures could card companies take to control gun purchases?

Brendan Miller, a chief analyst at Forrester, says forcing gun retailers to set up distinct checkout and payment systems for their firearm products is the first thing that comes to mind. But that would only complicate the issue further as we would require a whole new set of compliance rules for which products can and cannot be purchased using a credit card.

In response, Mastercard, through a spokesman said they work to ensure their “cards are only used for legal transactions,” but did not make it clear whether they would stop processing firearm purchases. Visa did not respond when asked to comment.

PayPal and Square said they’ll Curb fire Arm sales

Unlike credit card companies, payment firms like PayPal, Square, Stripe and Apple Pay have said they would not allow gun sales on their platforms.

Gun Enthusiasts Say Gun Sales Won’t Stop

If major credit card companies unite against gun sales, another payment processor may rise to occupy the niche! It happened with pornography; American Express refused to process payments for the porn industry, and other processors took over.

Some industry enthusiasts have even proposed cryptocurrency as a payment option for firearms.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

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Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

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