A major credit card payment handler’s refusal to process transactions involving legal online gun sales is causing a stir among gun rights advocates.
The controversy started in September when Authorize.net, one of the nation’s major credit card “payment gateways”, ended its business relationship with the Hyatt Gun Shop in Charlotte, N.C., which bills itself as the nation’s largest gun store.
An email sent to Hyatt Gun Shop by Authorize.net explained that since Hyatt sells guns, it is a violation of Authorize.net’s “acceptable use guidelines.”
Justin Anderson, Hyatt’s marketing director, told a reporter for CreditCards.com that Authorize.net had been doing business with Hyatt for four years, and nothing about the relationship had changed.
“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.”
Credit card “payment gateways” like Authorize.net serve to encrypt credit card data and provide other services moments between when a card user clicks “Purchase” and then receives a confirmation. The gateways provide a critical service that ensures safety and privacy.
Anderson told CreditCards.com that it is unfair to lump legal gun sales in with illegal drugs and other outlawed substances – especially when the US Constitution protects the sale and purchase of guns.
“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.”
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The article notes that major credit card payment processors – Visa, American Express, Discover, MasterCard – are merely observers of the controversy and do not prohibit the use of their cards for legal firearms purchases.
But the article also points out that Visa owns Authorize.net and its parent company, Cybersource Corp., and has thus indirectly been drawn into the dust-up.
Hyatt is urging a boycott of all websites displaying the Authorize.net or Cybersource logo, a boycott that is being promoted by Grass Roots North Carolina, a gun rights group.
“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’s website says. “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 not apply.”
Spokespersons for Visa and its Authorize.net and CyberSource units did not respond to CreditCards.com’s requests for comment, deferring to an outside media relations specialist.
The spokesman told CreditCards.com he was allowed 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.”
Anderson told CreditCards.com he doesn’t have any problems getting transactions cleared by the major credit card companies, and that once Hyatt switched payment gateways, there were no issues with Visa.
According to CreditCards.com, some believe politics is driving Authorize.net’s sudden change of policy on guns. An article in the Washington Examiner pointed the finger at Visa, noting its executives gave $21,780 to President Obama’s re-election campaign. But as CreditCards.com pointed out, Visa executives also contributed $22,375 to Mitt Romney’s election run.
Whatever the reason, CreditCards.com reports that as Authorize.net left gun shops in the lurch, other payment gateways stepped in. Among the most active is Payment Alliance International of Louisville, Ky., which has built relationships with the National Rifle Association and the National Shooting Sports Foundation.
Nathan Danus, vice president of national accounts for Payment Alliance, told CreditCards.com that the group is “helping federally licensed firearm dealers receive the fair and gun-friendly merchant services they deserve.”