In an unprecedented year marked by significant social events, the firearms and ammunition industry has seen a surge in demand. Record-breaking gun purchases, influenced by various factors such as the pandemic, social unrest, and political changes, have put the spotlight on this sector.
The Growing Significance of Firearms Industry
The firearms sector is not just about selling guns and ammunition; it’s a substantial contributor to the U.S. economy. Generating over $60.02 billion in economic impact and $6.82 billion in state and federal taxes, this industry is vital. However, this economic powerhouse faces unique challenges in acquiring merchant services, particularly for Federal Firearms License (FFL) holders.
The Struggle for FFL Merchant Accounts
Despite its economic contribution, firearms dealers often encounter difficulties in securing FFL merchant accounts for credit card processing. High-risk categorization by banks due to potential liabilities, chargeback rates, and regulatory complexities makes this process challenging.
Why are Firearms Dealers Considered High-Risk?
FFLs fall into the high-risk merchant category due to a combination of factors including strict government regulations, age restrictions, and the inherent risks associated with firearms sales. Online gun sales add another layer of complexity with shipping and delivery regulations.
The High Cost of High-Risk
Traditionally, being a high-risk merchant comes with its downsides – higher processing fees, funding delays, and even account terminations. Volume caps and reserve requirements can strain cash flow, hindering business operations. This categorization often extends to related businesses like hunting and outdoor stores, even if their primary products are less risky.
Finding the Right Merchant Services for FFLs
Finding a merchant account that understands and caters to the specific needs of FFLs and the broader firearms industry is crucial. A reliable high-risk merchant account should offer fair terms and be adaptable to the business’s volume and history.
For FFLs and related businesses, the task of obtaining suitable merchant services might seem daunting. However, with the right approach and a clear understanding of the industry’s needs, securing an appropriate merchant account is achievable and should not come at an unreasonable cost.
At Bankcard International Group, we understand the intricacies of the firearms industry and offer tailored merchant services to meet these unique challenges. Our goal is to support your business’s growth while navigating the high-risk landscape effectively.
Contact us today to explore how we can provide the merchant services your firearms or ammunition business needs to thrive in this dynamic industry.
