Due to the recent rise in violence throughout the world as well as the push for gun control laws by politicians, more and more people are shopping for guns online.

These people want the security that comes with owning a firearm. To handle threats to their property, their families, themselves. Feeling powerful and defended in a time like this is unparalleled when it comes to owning a gun.

Which is exactly why you need to have a firearm merchant account to match demand, provide value, and ensure protection for your customers.

E-Commerce Firearm Sales Are on the Rise

It’s a good time to be a gun manufacturer. Sales increased 40% recently, leading to a rebound in the value of the publicly traded companies in the industry.

Gun manufacturers are cashing in on fears that the government is going to ban certain weapons or restrict them through legislation. With a rise in police brutality, mass shootings, hysteria from the pandemic, and recent world affairs, many states want to impose legislation that would restrict gun ownership.

But that’s a two-sided street, isn’t it? The violence, outbursts, and activity going on around the world is leading even more people to seek out protection by means of purchasing a firearm. And because of the threat of legislation against it, sales are on the rise.

When people are fearful of the world around them, they seek safety. It turns out that many of those people find the highest amount of safety behind a firearm.

You, as a merchant, should be able to provide that level of safety for them and tap even further into this increased interest without challenges from your payment processor, bank, or financial institution.

Challenges of Processing Firearm Sales Online

The rise in online firearm sales is a good thing for online firearm retailers. It means more people are interested in owning a gun and more of these people are turning to the Internet to do so.

However, this also means that it is becoming increasingly difficult for firearm retailers to find the merchant account services they need. Banks are hesitant to open accounts for these high-risk businesses, meaning that these retailers may have a hard time finding payment processing services.

Licensing, Regulation, and Compliance

The U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) regulates the sale of firearms in the United States. It’s important for online retailers to be aware of these regulations and licensing requirements when selling guns online.

Federal requirements include a valid license from the ATF. They require that all firearms dealers hold a Federal Firearms License (FFL) before engaging in business. While some states have their own licenses for firearms dealers, the FFL merchant license is a must for conducting business online.

Maintaining compliance with all of these is a full-time job, but that isn’t the only thing you need to focus on. When you have an online gun shop, you also have to find a way to accept payments online and ship those firearms to your customers in an efficient manner.

Fraud Prevention

As with any other type of online purchase, fraud prevention is an issue for sellers and processors alike. For example, the buyer might use stolen credit card information or attempt to commit identity theft — both of which can result in chargebacks and a loss of money for the merchant.

Chargeback Management

Chargebacks are another major concern with online firearm purchases. A customer might make a fraudulent claim to get his money back or he might simply file for a chargeback after realizing he doesn’t like the weapon or it does not suit his needs as expected. With higher-value items such as firearms and ammunition, chargebacks can be far costlier than those arising from other industries. This is one of the reasons why gun sales online is considered high-risk.

The Only Way Forward Is with a Firearm Merchant Account

As firearms become more popular, the demand for online sales also increases. For merchants to keep up with the pace, they have to meet strict guidelines. The only way to do that is with a firearm merchant account.

Why Selling Guns Online Can Be Difficult

Because of the high-risk nature of selling guns, it’s not always easy to find banks willing to work with your firearms business. This is especially true for new businesses that have no credit history. As a new business owner you might face some challenges when trying to open an account with a bank or processor because you don’t have any credit history yet.

Additionally, if your business has an active account and suddenly begins selling firearms – this could cause your account to be shut down with no warning. Because merchant processors consider guns and other weapons as high risk products, they may close your account without notice once they find out that you’re selling them.

It’s important to understand why you can’t just use any merchant account to sell guns online. Your customers have to prove they have an FFL before completing their purchases, and this requires additional verification. Only after this verification process is complete can the firearm be shipped or picked up by the buyer.

A traditional merchant account doesn’t have this functionality built in, which makes it impossible for you to verify if your customers are legally allowed to purchase firearms. This is why an e-commerce store needs a firearm merchant account instead.

How Do Firearm Merchant Accounts Work

Firearms merchant accounts are a specialized type of merchant account that allows you to accept credit card payments for firearm purchases. These merchant accounts usually have higher processing costs than regular merchant accounts and stricter underwriting guidelines.

But keep in mind that all high-risk industries are met with potentially higher pricing and strict underwriting. And before you think, “I’ll take the risk and just use Stripe,” remember that all firearms sales are high-risk. You cannot sell these products with a standard merchant account (including on platforms like PayPal or Square), nor can you legally sell without being licensed (which a standard merchant account won’t check for in your case).

How to Get a Merchant Account for Gun Sales

Credit card processing is necessary for any gun store, but getting a conventional merchant account isn’t easy. The laws concerning gun sales vary from one state to another, and many states restrict people’s right to carry guns. It’s not surprising that most banks don’t want to get involved with an industry that is so controversial, even though it does have loyal customers, like the firearms industry.

If you need to accept credit or debit cards for your gun store, you’ll need a firearm merchant account.

Specifying exactly what you plan on selling is a good start in finding the right account for you. This is because not all processors allow the same types of sales.

For example, some processors allow firearm organizations but not retail sales, while others may allow only ammo sales but none of the weapons themselves. There are also processors that allow hunting rifle sales but not other gun sales.

Being transparent about what you’re sales plans as an online gun dealer is necessary when finding a processor and bank that will work with you.

DirectPayNet Connects You with High-Risk Payment Processors and Banks for Your Firearms Store

DirectPayNet is a merchant service provider that specializes in providing high-risk merchant accounts to higher risk industries like firearms. We will set you up with a payment gateway and connect you with a payment processing company that supports your business type so you can continue processing payments without risk to your bottom line.

As an online firearm merchant, you need a gun-friendly credit card processor if you want to keep your business up and operational.

Get in touch with our customer support team of merchant service experts to get set up with a firearm merchant account today.