Top 4 Things A Merchant Needs for online FFL Credit Card Processing

Accounts Wizard
December 01, 2020

What’s the outlook online for FFL credit card processing as a gun dealer?

To say the firearm industry is growing in the US is a huge understatement at this point. Guns are flying off shelves nationwide, and there’s been a near-critical ammo shortage for most of 2020. Year-to-year, the industry has grown by over 7.5%, compared to a projected 2.3% before the COVID-19 pandemic, which spurred a surprise growth period in 2020. There has been a record in background checks in 2020 with 16.5 million from January to October 2020, which broke the previous full-year record of 14.9 million in 2016. Consumer demand is growing overall and online sales of firearms, ammunition, and gun accessories are also increasing exponentially. Online FFL Credit Card Processing transfers, in particular, are growing at a tremendous rate amid the pandemic due to consumers who want to purchase firearms from the safety of their homes.

Online Gun Sales are a huge industry but require expert knowledge to process credit card transactions

Customers looking to purchase a firearm online can do so with a credit card; however, several major credit card processors–including PayPal, Stripe, and Square–do not accept gun purchases. They classify firearms as a “high risk” purchase, a designation used for transactions with a high potential for chargebacks and/or fraud. This applies both online and in person.

To ensure safety and mitigate some of the risks associated with purchasing firearms, the 1968 gun control act required all gun dealers to have a federal firearms license through the ATF. This created a heavily regulated industry for gun shops and dealers. The political issues associated with gun control and the 2nd amendment spur constant changes in processing sales for gun dealers, making it hard for a merchant to keep up with all the changes that may happen to their merchant processing accounts.

Finding merchant services for firearms can be difficult because many banks and other processors refuse to partner with gun dealers. By working with an FFL credit card processing company like WizoPay, businesses can find competitive rates and fees with a simple application process and find a long-term partner that can help keep them informed on any changes in the industry that may affect their merchant processing.

The Top 4 Things A Merchant Needs To Process Gun Sales With A Credit Card Online

  1. Make sure you’re diligently fighting fraud by requiring another form of identification with the purchase of a firearm in addition to a credit card.
  2. Let consumers know that if they can buy a gun from you online, the weapon will not be sent directly to their home. It will be sent to a dealer with a Federal Firearms License, where they’ll have to retrieve it after completing all the necessary paperwork as well as a background check. In addition to the weapon’s price, they will also be charged for transferring the gun.
  3. The rules are slightly different for private, online gun sales compared to in-person gun sales or purchasing from an online dealer. A private seller can post a gun online in a classified ad and sell it to someone online, but it is illegal for a gun to be sold to anyone who would not likely be able to pass a background check. However, these regulations are hard to enforce over the internet. Of course, online shopping always carries certain risks, even if you aren’t buying guns or other regulated products.
  4. As a merchant, you need to have top-notch fulfillment and delivery services to ensure the sales process is as smooth as possible after the transaction. Customers are still getting used to the idea of buying a gun online, and if the process isn’t easy, they won’t do it again.

A personal, supportive approach to FFL credit card processing is vital to an easy transaction

Some credit processors will only provide a gun dealer a merchant processing account if they have a long history of sales with documentation proving they can stay in business long-term. The main reason for this is because the firearm industry is often labeled as high-risk by most merchant processors.

The firearm industry is labeled as high-risk by the financial institutions for various reasons:

  • Uncertainties of Future Regulations
  • High Chargeback Rates
  • Frequency of Fraudulent Sales
  • Large Ticket/Transaction Amounts

The biggest perk a merchant services partner can provide an FFL dealer is a long-term partner with a personal, supportive approach that’s willing to help them combat fraud and chargebacks as if it’s affecting their bottom line.

At WizoPay, our extensive working relationships with high-risk merchant accounts give us a considerable advantage when it comes to working with gun dealers and FFLs. In addition to understanding the regulations and industry, we also know how to deal with fraud and chargeback issues as they’re a daily part of our business. We offer low, flexible rates, no contracts, next-day funding, and USA-based technical support. As your FFL or gun dealer merchant account, we guarantee the quality, custom support that will exceed your expectations.


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