Why are online firearms merchant accounts considered high risk?

Jul 24, 2013

The online Gun business is one that is not understood by many, including acquiring banks. It’s this element of not being understood that this type of business finds itself being categorized as a high risk business venture. A merchant account for firearms is exactly what firearms businesses need to be able to accept payments via credit cards. With the acquisition of a merchant account, a firearms dealer would find their business competing favorably with others.

Despite the fact that gun dealerships are viewed as high risk, the identification process and paperwork involved in these types of transactions turn purchasing guns into a more secure business transaction. Gun dealerships experience minimal amounts of credit card chargebacks, due to the extensive verification process carried out before completing a transaction.

For a firearm merchant account to be approved, the bank would ordinarily consider the credit history, the absence of disputable business activities and the dealer’s ability to make payments. As with other merchant account applications, firearm merchant accounts can be applied online and take as little as a couple of hours to process.

Some of the requirements a firearms dealer is likely to be asked during the application of a firearms merchant account include:

  • Copy of a Federal Firearms License (FFL)
  • Business license
  • Dealer’s website

The Federal Firearms License (FFL) is an important requirement when applying for a firearm merchant account. Merchant account providers have been known to physically send a representative to a dealer’s location to help with the confirmation of the dealer’s location.

Gun dealers face challenges in accessing merchant services from providers, simply because of the negative publicity and high value fraud associated with this industry. The arms and ammunitions industry has in the recent past been the receipt of bad publicity. It’s this negative publicity that has led to some banks shying away from offering their merchant services to gun dealers. High value fraud of guns with firearms costing a substantial amount of money to purchase, the risk a dealer faces if there is a chargeback to a purchase would be costly. Hence the subsequent grouping of firearms in the same category as precious metals or any other item that could be sold for cash anywhere.

A firearm merchant account comes with two different types of payment processing services; these are real time and manual payment processing. Real time payment processing is a web based solution that processes the credit card at the point of placing an order while generating email notifications on order acceptance and transfer of funds. Whereas the manual payment processing option entails the delivery of a credit card number via telephone, an online order form or fax processes an order when the payment processing company is contacted. According to industry experts, the manual payment processing offers merchants and their acquiring banks a more secure environment to transact from.

Despite the hurdles associated with acquiring a firearm merchant account and the un-wiliness of some merchant providers to work with gun dealerships. Prospective gun dealerships are advised to take their search for reliable merchant account providers online. The internet makes it possible for gun dealership to access credit card processing services tailored for their firearm business. EMerchantBroker is familiar with the challenges associated with obtaining a firearm merchant account and it’s because of this understanding that the company has established reliable and dependable links with firearms merchant account providers. Our services benefits applicants of firearm merchant accounts who are paired with provider’s best suited for their needs.

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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.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

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.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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