Firearms-related businesses must comply with a multitude of regulations imposed at both state and federal levels. Consequently, engaging in the sale of firearms or related accessories can subject your business to legal and financial risks. Alongside regulatory hurdles, several factors contribute to firearms businesses being classified as high risk by payment processors:

Likelihood of chargebacks
The firearms and ammunition sector typically experiences a higher incidence of chargebacks compared to other industries.

High possibility of fraud
Transactions involving the purchase of weapons paid for via credit or debit cards may not always be readily traceable back to the buyer, rendering this industry an appealing target for fraudsters.

Legal and financial liability
Many acquiring banks commonly refrain from providing services to firearm businesses to evade entanglement in legal disputes concerning gun purchases and gun laws.

High ticket sales
The typical cost of a firearm varies from several hundred to several thousand dollars. A payment dispute of such magnitude can affect your cash flow, raising the risk of your business defaulting on payments.

While businesses in various industries might utilize payment service providers like Stripe, Square, and PayPal for credit card processing, these entities typically do not cater to firearms businesses. Consequently, firearms businesses must resort to traditional payment processors to facilitate payments. However, partnering with processors lacking familiarity with the firearms industry can impede operations rather than facilitate them.

Outlined below are common challenges firearms merchants often face when collaborating with a payment processor ill-equipped to meet the unique demands of their industry:

1. Account closure: Payment processors have the authority to abruptly close your merchant account if they detect its utilization for the sale of firearms or associated accessories.
2. Frozen funds: In cases where your chargeback ratio exceeds a certain threshold—which is common in the firearms industry due to infrequent processing of higher-value transactions—your funds may be frozen for a duration of up to six months.
3. Cash flow problems: Extended immobilization of funds can pose significant challenges in sustaining your business operations over prolonged periods. Cash flow issues stand as the primary cause of closure for numerous small businesses.
4. Loss of income: Many customers in the firearms and ammunition sector depend on flexible payment methods to afford their substantial purchases. Inability to accept credit cards may result in lost sales from customers unable to make immediate payments for their desired items.

When selecting a payment processor accommodating firearm transactions, take into account the following factors:

1. Honest sales practices: Evaluate customer reviews to gauge the processor's commitment to honest dealings.
2. Specialities: Select a processor specifically catering to firearms businesses, as most mainstream processors do not.
3. Transparent onboarding and underwriting process: Ensure transparency in the processor's vetting process during onboarding, as it reflects their ongoing approach to your account.
4. Personalized customer service: Look for prompt assistance from the customer service team in addressing any equipment, technical, or funding-related issues you encounter.

Based on your business activities, you will require a minimum of one of the following merchant accounts for your firearms enterprise:

Online

Should you intend to establish an online store selling firearms, accessories, or ammunition, you'll require an eCommerce merchant account. Upon approval and integration with your website, you can seamlessly process payments on your eCommerce platform.

Retail

If your intention is to run a physical storefront, you'll need a retail merchant account. Such an account usually comes with either a point-of-sale system or a standalone terminal.

Over-the-Phone

If you intend to accept payments via phone, you'll require a MOTO (Mail Order/Telephone Order) merchant account. A MOTO transaction entails using a payment gateway to input transaction details.

Prior to obtaining gun-friendly merchant services, providers typically require that you have acquired the following:

• Federal firearms license (FFL)
• State-required licenses
• Business bank account
• Social security number
• Merchant account application

O3 Merchant Services has a unique understanding of  the intricacies within the firearms industry. With our 98% approval rate for merchant accounts and our proficiency in catering to high-risk enterprises, we deliver dependable services that firearms merchants can rely on. At O3 Merchant, we take immense pride in empowering businesses in the firearms industry to thrive!

O3 Merchant Services seamlessly integrates with your existing firearm-specific software solutions, facilitating a smooth transition and processing experience. Our range of payment gateway options seamlessly integrates with thousands of website platforms via API connections.

For retail merchants, we provide state-of-the-art terminals that securely process transactions within seconds. We ensure everything is interconnected, leaving no loose ends or missed connections. Explore all that O3 Merchant has to offer for your firearms business today!