More than one-third of American households owned one or more firearms in 2016, according to Statista. The statistics further show that an estimated 83 privately-owned firearms are owned for every 100 people in the country.
Despite some segments of the population clamoring about new gun control measures, the sale of firearms for hunting and personal defense weapons continues to remain steady in the United States. Due to the demand, the number of online firearm and ammunition businesses continue to grow. However, the mostly cash gun business is no more, and now, everyone wants the option to use credit cards. A business that wants to accept and process credit card transactions must have a merchant account. The problem is that getting approved for an online firearm merchant account is challenging.
Unfortunately, it is not rare for firearm businesses to spend time applying for accounts with traditional banks only to be rejected because their work is considered high risk due to excessive chargebacks, fraud, and unclear laws. The best way to move forward successfully is to know the laws, what you are getting into, and be prepared to prove everything.
Know What to Expect
Before you move forward, know that the strict federal regulations controlling the sale and servicing of firearms make legally get into the online firearms business very difficult.
First, you must be a federally licensed firearms dealer or have access to one to be considered legal. You can apply for a Federal Firearms License (FFL) from the Bureau of Alcohol, Tobacco, and Firearms (ATF), and applications are processed within 60 days. Not only are you prohibited from conducting business until you have your FFL, all interstate firearms transfers are done between FFL holders.
Also, it is important to understand that purchasing guns over the internet is legal, but federal laws prohibit merchants from shipping serial numbered parts, handguns, or long guns directly to consumers that are not in the same state as the business. According to law, firearms have to be transferred to a federal firearms licensed dealer or (FFL) in the same state of residence.
When a dealer accepts a transfer on a purchaser’s behalf, the person will require the buyer to fill out a 4473 Form and conduct a background check. Though there are many federal regulations, private, unlicensed sellers are not bound by them.
Though federal guidelines are clear, individual state laws muddy the waters. Some states, such as Colorado and New York, require background checks through the National Instant Criminal Background Check System (NICS) for those who try and buy guns through private sales. Montana, Louisiana, and Arkansas, however, have few restrictions when it comes to the private gun sales.
Documents Needed to Get an Online Firearm Merchant Account
Some providers only want businesses to have a long history of sales with the documentation to prove that they have the ability to stay in business. However, all providers will want to see that you make timely payments to creditors and other billing institutions. Also, payment providers want to know you have a loyal base that shows you have stable income. Due to these factors, providers want to see that you don’t have any hanging threads. Additionally, when you are ready to apply, you will need fill out an application and submit supporting documents.
You will need:
- A valid, government-issued ID, such as a driver’s license or a passport
- A bank letter or a pre-printed voided check
- 3 months of the most recent bank statements
- 3 months of the most recent processing statements, if applicable
- A SSN (Social Security Number) or EIN (Employer Identification Number)
Additionally, you will need to have a chargeback ratio of below 2%, a fully functional website, and clear terms and conditions, and a privacy policy. In addition to submitting this information, it is important that you prepare in other areas. Take care of any outstanding debts, maintain a good credit score, and have some savings in your bank. All of these factors increase your chances of getting approved for an online firearm merchant account.
When It’s Time to Apply
When you are ready to apply for an online firearm merchant account, consider WolfofPayments.com (WOP), a high-risk merchant account provider. WOP has custom solutions for online firearm retailers. Additionally, it works with businesses of all sizes and industries, and its application process is streamlined and quick.
