The refusal of a leading credit card payment handler to process
transactions involving legal gun sales is compelling licensed
dealers to hunt for alternative credit card systems, and is
provoking boycotts by incensed gun enthusiasts who complain of
The controversy erupted late in September with word that
Authorize.net, one of the nation's largest credit card "payment
gateways," abruptly severed its business relationship with the
Hyatt Gun Shop of Charlotte, N.C., which calls itself the nation's
largest gun store.
The reason, according to an email sent by Authorize.net to Hyatt
Gun Shop owners: The Hyatt Gun Shop is a shop that sells guns and,
thus, it is in violation of Authorize.net's "acceptable use
Justin Anderson, the store's director of marketing, said the
notice came as a shock. Hyatt and Authorize.net had been doing
business for four years, he said, and nothing about his business or
its relationship to Authorize.net had changed.
Upfront about gun sales
"When we approached them to do business with us, the first thing we
did was make sure we were completely clear about the nature of our
business," Anderson said. "We do sell guns, we do sell guns online,
and, at the time, there were no problems."
He and other licensed gun dealers acknowledge that their
business is controversial, but they emphasize that it is legal and
they say it is heavily regulated.
Whether you support or oppose the current state of firearm sales
in the United States, Anderson said, it simply is unfair for any
branch of the financial system to lump the legal sales of guns with
the illegal sales of drugs or other banned substances -- and to
refuse to handle transactions for both.
"It blows my mind that a company like ours that is so heavily
regulated would fall into a situation like this," Anderson said. "A
lot of gun businesses have been dropped by Authorize.net. They've
been dropping people left and right."
Before we go any further, a few facts:
- This credit card controversy involves only online sales, not
face-to-face transactions in brick-and-mortar stores or, for the
most part, legal sales at gun shows.
- That's because "payment gateways" play a role only in
Web-based or other online credit card transactions. In simple
terms, Authorize.net and other payment gateways are e-commerce
service providers that encrypt credit card information and
provide other crucial services during those few seconds between
the moment when a credit card user punches the "Purchase" button
for an online purchase and the moment when that user receives a
- The major credit card payment processing companies -- Visa,
MasterCard, American Express, Discover -- are neutral observers
of this controversy between payment gateways and firearm dealers.
Their representatives say they have no policies that restrict use
of their cards for legal transactions regarding guns.
That said, Visa owns Authorize.net and its parent company,
Cybersource Corp. As a consequence, Visa has been drawn at least
tangentially into the dispute.
"We urge all of you who shop online to boycott any website
displaying the Authorize.net or Cybersource logo," Hyatt Guns says
on its website.
The boycott, of uncertain effectiveness, has received some
national publicity and also is being promoted by Grass Roots North
Carolina, which calls itself a "no-compromise gun rights
"It looks like the small but noisy anti-gun crowd has gotten to
what must be a jelly-spined PR department at CyberSource and
Authorize.net," the group says on its website. "Either that, or
leadership at these companies have simply become anti-gun all on
their own. Whatever the cause, Authorize.Net is making it clear
that businesses lawfully selling firearms are undesirable and need
Silencer on for card companies
Several in-house spokesmen and spokeswomen for Visa and its
Authorize.net and CyberSource units did not respond to numerous
requests for comment, ultimately referring the inquiries to an
outside media relations specialist.
That spokesman said he was authorized to say only this about
Authorize.net: "Authorize.net is an e-commerce service provider and
subsidiary of Visa. It maintains different risk policies from Visa
because it offers different services." He would not specify what he
meant by "different risk policies."
" is the contract that ties the company to merchants. It prohibits
transactions involving any product or service that is unlawful,
anything obscene or pornographic, anything that infringes on
patents or trademarks, anything that "is threatening, abusive,
harassing, defamatory," anything containing computer viruses or
Trojan horses, and anything associated with illegal gambling
operations, illicit drugs and "the sale of firearms."
Wait a second, say gun dealers. How did we get in there?
"That's what we wonder," Anderson said, "and we wonder if this
is being driven more by politics than by business."
And so, inevitably, politics has become involved.
Political influence claim
An online article in the Washington Examiner, which has ties to
conservative groups and figures, linked Authorize.net's anti-gun
action to Visa, which it called "a key Obama campaign donor."
Later, the article noted that the "key" 2012 contribution to
President Obama's re-election campaign from Visa executives totaled
$21,780. It didn't report that Visa executives also contributed
$22,375 to Republican candidate Mitt Romney.
For their part, the major credit card companies said they have
no problem clearing transactions related to legal gun sales -- once
those transactions work their way through payment gateways or other
elements of the financial system.
- American Express: "American Express cards can be used to
purchase firearms, so long as they are sold legally," said Marina
Hoffmann Norville, an AmEx vice president and corporate
- MasterCard: "There has been no change in our policy," said
Jim Issokson, a spokesman for MasterCard Worldwide. "Legal
transactions are permitted."
- Discover: "We do not prohibit legal gun sales," said Katie
Henry, a spokeswoman for Discover. "Acquirers [banks or other
financial institutions that process credit card transactions] are
required to ensure that merchants are acceptable under our
- Visa: "Visa does allow legal transactions on its network,
including the sale of firearms and ammunition," said the
company's outside spokesman.
Anderson, the marketing director for Hyatt Guns, confirmed that
he has no problems getting transactions cleared by the major credit
card companies -- after he figures out how to get those
transactions through the middlemen.
"We never had a problem with Visa," he said. "And, once we
switched gateways, we had no problems with Visa."
Other payment options open
Anderson and other gun dealers found that, as Authorize.net
retreated from gun shops, several other payment gateway operations
marched into the breach.
One of the most active is
of Louisville, Ky., which has forged relationships with the
National Rifle Association and the National Shooting Sports
Foundation. Payment Alliance promotes its "gun-friendly credit card
processing" solutions, including "mobile payment solutions for gun
shows -- some work with your existing smartphone or tablet."
"We are helping federally licensed firearm dealers receive the
fair and gun-friendly merchant services they deserve," said Nathan
Danus, vice president of national accounts for Payment
He said the issue has been percolating on a low boil for some
time, and his firm began recognizing a market opportunity about 10
"Payment gateways, card processors and lenders have been
shutting down gun dealers' 'card-not-present' business for close to
a decade now," he said. "This makes it nearly impossible for these
hardworking Americans to find secondary distribution points to sell
their goods or services."
Danus said Authorize.net and any other firms that refuse to work
with licensed gun dealers are doing a disservice to military
veterans and others who simply are trying to purchase a legal
Buying legal marijuana with credit card still