Merchant Services For A Pawn Shop
Getting a merchant account for a pawn shop is never an easy task. The very nature of the pawn industry is at high risk. Even though the demand for pawn shop merchant services has not decreased over the years, banks consider them to be high-risk merchants. Because of this, no matter what type of pawn shop you run – online or brick-and-mortar – you will need to get a high-risk merchant account in order to process credit card transactions.
Why Are Pawn Shops Considered High Risk?
There are a number of reasons. Pawn shops generally sell high priced items ($500 on average). Such transactions pose a chargeback risk to the credit card processor because they are particularly susceptible to what is known as “friendly fraud”. Many pawn shops also sell their merchandise online, which further increases the risk of chargebacks and fraud. Apart from this, pawn shops are also considered high-risk because it is generally assumed that they procure stolen goods. Even though this presumption is invalid, the stigma remains.
How to Get Pawn Shop Merchant Account?
Getting a high-risk pawn shop merchant account isn’t difficult but it can be time consuming. To get started, you will need to find the right high-risk merchant account provider. It is recommended that you do your due diligence to find one that can meet your specific needs. You should thoroughly review the fees and rates related to high-risk transaction processing. Make sure to also read the fine print and if you don’t fully understand any terms and conditions, ask for clarity.
Finding the Right Merchant Services Provider
In addition to comparing fees and rates, you should make sure that the pawn shop merchant account provider you consider offers all the features that you need to succeed. Following are the key features you should look for when finding a pawn shop merchant account provider:
1) Payment Card Processing: Whether your customers are repaying loans they have taken out with you or they are simply buying merchandise from your pawn shop, you need to be able to accept credit and debit card transactions from them.
2) Check Processing: Although personal checks are not as common as they used to be, it’s valuable to have the option of accepting them.
3) Check Drafting: As a lender, you want to be able to pay customers when they visit your shop to pawn their items. A pawn shop merchant account provider that allows you to cut checks will help you keep records of pawn transactions in addition to helping you avoid depleting your on-hand cash reserves for pawning larger-ticket items.
4) Chargeback Policy: When selecting a pawn shop merchant account provider, choose one that does not overly burden merchants for certain chargebacks.
5) Security: Your pawn shop merchant account should come with the support and security necessary to protect the information of your customers and inspire their trust.
6) Automated Billing: A pawn shop merchant account that gives borrowers the option to set up recurring payments with their credit or debit card is a valuable asset.
7) E-Commerce: Nowadays, pawn shops are posting some or all of their inventory online in order to reach a wider pool of potential customers. If you are doing the same, then it is recommended that you look for a merchant account provider that has e-commerce options.
Just because you run a pawn shop does not mean you have to forgo the ability to process credit card transactions. By partnering with a high-risk pawn shop merchant account provider, you can have a reliable way to process those transactions and hence, grow your business.
Contact us today to get started at 1-877 493-4622
About The Author
Mark Sands, co-founder of High Risk Merchant Account LLC, an authoritative expert in the high risk merchant account space. Mark has decades of experience in the payment industry & enjoys writing on entrepreneurial related topics.