Go to a gun show, and you won’t find many merchants using PayPal.
You’ll also find few vendors using popular payment processors such as Square, Stripe, and Spark Pay.
That’s because some payment processors explicitly prohibit the use of their systems for online — and some in-store — sales of firearms, ammunition and certain accessories.
Retailers in the gun industry say they’re being discriminated against.
“Being shut out from mainstream payment processors makes us feel like we are part of some type of shady business when, in fact, there is more regulation and documentation required for federally licensed firearms dealers than most businesses,” said Trevor Blandford of Terminal Performance Associates in Caroline, Va.
Blandford, 21, has been working gun shows for his family’s business since he was 14 years old. Recently, his parents named him general manager of Terminal Performance, which is known for its custom-built pistols and rifles, and originally-finished wraps. He and his family sell their merchandise online and at local trade shows.
To process payments, most merchants use some sort of payment processor.
Payment processors are companies, often third party outlets, which handle credit card transactions between merchants and banks.
The concern some firearms sellers expressed to The Daily Signal is that restricting their access to some of the largest payment processors in the country — who offer the lowest transaction fees in the business — puts them at an unfair disadvantage to other industries.
Add that to the long list of regulations firearms sellers already face, and some say it’s not even worth attempting to start a business.
“In most of the states, especially California and New York, you’re a lunatic if you start a gun business,” Cody Wilson, co-founder of Defense Distributed told The Daily Signal.
Wilson had his bank account closed by Chase.
He was blocked from his PayPal account twice, and shut out from Stripe.
‘Operation Choke Point’
The federal government also may have an outside role in the decision of payment processors not to do business with firearms merchants.
The Daily Signal previously published a series of articles exploring the relationship between banks and the Federal Deposit Insurance Corporation, which is the governmental body responsible for regulating and auditing more than 4,500 U.S. banks.
When asked by The Daily Signal whether they play any role in advising payment processors against doing business with gun sellers, an FDIC spokeswoman would not respond, instead pointing to testimony given before Congress in July 2014.
It is the FDIC’s policy that insured institutions that properly manage customer relationships are neither prohibited nor discouraged from providing services to any customer operating in compliance with applicable law…The FDIC has a responsibility to cooperate with other government agencies and to ensure that the banks we supervise are adhering to laws, including those governing anti-money laundering and terrorist financing.
Full article: Firearms Sellers Say They’re Being Choked Off From Payment Processors (The Daily Signal)