It is legal for anyone who passes a background check and is 18 years old and above to purchase firearms in the United States. With this in mind, you might be wondering why firearm dealers are considered high-risk by many so-called conventional lenders and payment processors. Take a few minutes to learn the reasons for your gun, ammunition, and peripherals business to be placed in this category.

A word about payment processors and merchant providers.

Not surprisingly, the financial entities who assist companies in securely taking customer payments are in business to make money. The more reliable the client, the more effortless the payments and the less complicated the overall industry in which the client sells is, the greater the chances are that the bills will be paid and the lender will receive their payments on a timely and consistent basis.

However, some companies operate in industries that are highly regulated. They might sell products that can be dangerous and may also have high rates of fraud and customer-initiated refunds known as chargebacks. Tending to these companies’ payments can be anything but a smooth and uneventful process. This is why certain sectors, including firearms sellers, are seen as representing a higher level of risk of default, security breach, or legal entanglements. In response, many standard lenders refuse to work with sellers who occupy these high-risk sectors.

What high-risk businesses can do.

Although there are many providers who will avoid partnering with firearms dealers, the good news is that there is a robust market of what is known as high-risk merchant account providers who are ready, willing, and able to assist you in securely processing your customers’ payments. Nevertheless, this comes at a price that you need to factor into your business costs. High-risk payment processors often do the following.

• Charge higher per-transaction fees.
• May require you to open a rolling reserve account that they only tap into should you fail to make your payments.
• Ask you to agree to long-term contracts.
• Charge you extra for early cancellation.
• Make you pay additional or higher fees for excessive chargebacks.

Moreover, applying for their services often takes longer and leads to a higher degree of scrutiny as well as extra paperwork.

In spite of these added requirements, however, it is possible to establish a highly productive and effective relationship with one of these high-risk merchant account providers.

What to look for.

You probably will not be surprised to learn that not all high-risk payment processors are created equal. As you begin to wade through the many candidates vying for your attention, be sure to choose wisely. Look for the following attributes and accept nothing less.

• Experience lending to firearms sellers. An understanding of your industry and its intricacies is very helpful, especially because a lender with this insider knowledge will also have pre-established relationships with many banks and other financial institutions.
• High-caliber reputation as evidenced by positive reviews from real customers.
• Reasonable, transparent fees. Don’t sign on any dotted lines without comparing what several providers charge.
• Ability to integrate with the third-party software and ecommerce platform you already use.
• Excellent customer service. Help should be available around the clock and via several channels including email, user forums, knowledge base, chat, and human help. Should problems arise with your payment software or equipment, you cannot afford extended downtimes.

While it is true that not every lender or merchant account provider will want to sign on to partner with your firearms business, the good news is that there are many reputable companies who will. Take the time to find the one that is not only affordable but meets your company’s specific needs, and you can look forward to a valuable and effective relationship for years to come.