A device that has increasingly become critical to smaller up-and-coming retailers recently added firearms retailers to its list of businesses banned from using its credit card processing hardware.
Internet retail support company Square — which makes a small device that can plug into a smartphone or tablet and process credit card transactions — recently added firearms, parts, ammunition and “other devices that might cause physical injury” to its restrictions for receiving payment, the Daily Signal reports. The firearms businesses are lumped in with escort services, drug paraphernalia and pornography.
“By creating a Square Account, you also confirm that you will not accept payments in connection with the following businesses or business activities: … (i) firearms, firearm parts or hardware, and ammunition; or (ii) weapons and other devices designed to cause physical injury,” Square says.
The move loosely parallels recent efforts by the Federal Deposit Insurance Corporation and Justice Department to add greater regulatory scrutiny to companies that engage businesses they claim are at “high risk” for fraud. The effort, dubbed “Operation Choke Point,” has come under considerable fire from lawmakers on Capitol Hill, forcing government regulators to back off their claim that some of those businesses listed, including firearms retailers, are “high risk.”
“It is the FDIC’s policy that insured institutions that properly manage customer relationships are neither prohibited nor discouraged from providing services to customers operating in compliance with applicable federal and state law,” the FDIC clarified in August. “Accordingly, as part of clarifying our guidance, the FDIC is removing the lists of examples of merchant categories from outstanding guidance.”
The Square device has become increasingly popular with small retail operations and shops since all you need to process credit card transactions is a smartphone or tablet. The payment method is also convenient for businesses who frequently do business off site, including at gun shows, tactical training events or industry trade shows.
It is unclear why Square has not updated its terms of service to reflect the FDIC’s clarification on “Choke Point” targeted businesses. Shooting Sports Retailer attempted to contact Square’s press office but did not receive a reply.