Firearm Industry Definitions

Firearm Payment Definitions

PAYMENT CONCEPTS

TRANSACTION

Exchange of payment for firearms, ammunition, firearm accessories or firearm services between a customer and a firearm merchant. Transactions may be made in-person, online, over the phone or by mail.

RECURRING TRANSACTION

Exchange of payment for firearms, ammunition, firearm accessories or firearm services between a customer and a firearm merchant that occurs at a regular interval (e.g., monthly, annually). Recurring transactions require authorization by the payer.

MERCHANT PROCESSING

Method in which a firearm merchant accepts payment cards for firearm, ammunition, firearm accessory or firearm service transactions. Also referred to as payment processing.

CREDIT CARD PROCESSING

Method in which customer credit card information and funds are authorized, authorizations are settled and firearm merchants are funded for firearm, ammunition, firearm accessory or firearm service transactions.

For more: Credit Card Payment Definitions

PAYMENT PLAYERS

FINANCIAL INSTITUTION

Organization in the business of moving, investing or lending money, dealing in financial instruments or providing financial services. Financial institution positions may be firearm-friendly or non-firearm-friendly.

Examples: commercial banks (e.g., Chase), national and state banks (e.g., First National Bank), credit unions (e.g., Navy Federal Credit Union)

FIREARM-FRIENDLY BANK

Financial institution which supports investing or lending money, dealing in financial instruments or providing financial services to firearm merchants.

Examples: Synovus, Fifth Third Bank

NON FIREARM-FRIENDLY BANK

Financial institution which does not support investing or lending money, dealing in financial instruments or providing financial services to firearm merchants.

ISSUING BANK

Financial institution or card network which provides cards and credit limits to consumers and firearm merchants. The issuing bank retains full authority over the card held by the cardholder. Also referred to as the customer bank or issuer.

Examples: Chase, Wells Fargo, American Express

CARD NETWORK

Financial service company which enable, process and settle card payments between card issuers and merchant banks. Some card networks are also card issuers. Also referred to as a card association.

Examples: Visa, MasterCard, American Express, Discover

CARDHOLDER

Individual issued card and authorized to use it to pay for firearms, ammunition, firearm accessories and firearm services. Also referred to as the customer or payer.

FIREARM MERCHANT

Firearm business which accepts card payments in exchange for firearms, ammunition, firearm accessories or firearm services. Also referred to as the payee.

Examples: federal firearms licensee (FFL), including firearm manufacturers, importers, distributors, dealers/retailers

FIREARM MERCHANT ACCOUNT

Financial institution account which allows a firearm merchant to accept and process payment card transactions. Merchant account agreements establish transaction and processing fees paid to the acquiring bank and card networks.

ACQUIRING BANK

Financial institution which maintains firearm merchant accounts, allows firearm merchants to accept card transactions and processes payment card transactions. The acquiring bank acts as a middleman between the firearm merchant and the issuing bank in transactions. Also referred to as the merchant bank or acquirer.

MERCHANT IDENTIFICATION NUMBER (MID)

Unique number assigned to firearm merchants by their acquiring bank for identification purposes. The MID is transmitted with cardholder information to involved parties for transaction reconciliation.

INDEPENDENT SALES ORGANIZATION (ISO)

Business which sells firearm merchants card processing services through partnerships with financial institutions and card networks. ISOs are responsible for equipping firearm merchants with payment terminals, establishing transaction fees, and settling customer card disputes. Also referred to as a merchant service provider (MSP) or payment service provider (PSP).

Example: Ingencio

INDEPENDENT SOFTWARE VENDOR (ISV)

Business which develops and sells software, such as bound books and POS systems, to firearm merchants. ISVs partner with merchant service providers to provide payment terminals to merchants.

Example: Orchid

INDEPENDENT SALES AGENT (ISA)

Business contracted by an Independent Sales Organization or Independent Software Vendor. ISAs work with ISOs and ISVs to sell their card processing services and software to firearm merchants and handle merchant and customer support.

Examples: Fortis, FiServ

REFERRAL PARTNER

Independent Software Vendor which refers firearm merchant accounts to a merchant service provider for sales, onboarding and support. Referral partners are typically paid for each account they refer.

PAYMENT PROCESSOR

Company used by firearm merchants to manage the processing of payment card transactions. Payment processors serve as a middleman in finalizing card transactions and transferring money from the customer bank to the merchant bank. Payment processors typically partner with a merchant service provider but can also offer direct merchant services.

Examples: Global/TSYS, First American, Card Connect

PAYMENT HARDWARE & TECHNOLOGY

BARCODE SCANNER

Device used to capture, read and send information contained on barcodes of firearms, ammunition and firearm accessories to a computer or POS system. Barcode readers typically connect to or integrate with payment terminal or POS system. Also referred to as a barcode reader, price scanner or POS scanner.

Examples: Teemi TMCT-10, Nadamoo Bur3072, Honeywell Voyager

CASH DRAWER

Drawer in which cash, coins and receipts from firearm, ammunition, firearm accessory and firearm service transactions can be stored. Cash drawers typically connect to or integrate with a POS system. Also referred to as a cash box.

Example: APG Cash Drawer

PAYMENT TERMINAL

Device used by a firearm merchant to process customer card payments for firearms, ammunition, firearm accessories and firearm services. Payment terminals can allow for customers to swipe, dip or tap their cards or use a digital wallet to pay. Also referred to as a card terminal or reader.

Example: Ingencio iPP 350

PIN ENTRY DEVICE (PED)

Device used in card transactions to accept and encrypt the cardholder’s personal identification number (PIN). PEDs feature a number/letter keypad for entry of PINs. Also referred to as a PIN pad.

POINT OF SALE (POS) SYSTEM

Hardware or cloud-based software used by a firearm merchant to process customer transactions for firearms, ammunition, firearm accessories and firearm services. POS systems typically connect to or integrate with a computer monitor, cash drawer, payment terminal, barcode reader and receipt printer.

Examples: Orchid POS™, Cervelle Merchant Magic

RECEIPT

Paper document or digital record provided by a merchant acknowledging a customer received goods or services in exchange for payment. All receipts must note the date of purchase and may include the specific goods or services purchased with quantities, applied taxes and payment type.

RECEIPT PRINTER

Device used to print customer receipts for firearm, ammunition, firearm accessory and firearm service transactions. Receipt printers typically connect to or integrate with a payment terminal or a POS system. Thermal receipt printers are the most common and use heat and thermal paper, not ink, to print receipts.

Examples: Epson TM-T88VI, Epson TM-T20ii

PAYMENT GATEWAY

Technology within payment terminals, POS systems and ecommerce checkouts used by firearm merchants to accept customer payment cards. Payment gateways collect and encrypt cardholder information for future processing by a payment processor.

AUTOMATED CLEARING HOUSE (ACH)

Electronic network for processing ACH debit and ACH credit transactions between financial institutions.

PAYMENT TYPES

CASH

Physical legal tender (e.g., currency and coins) used to pay for firearms, ammunition, firearm accessories and firearm services. Also referred to as money.

CHECK

Paper slip which orders a financial institute to pay a specific amount of money from an individual’s checking account to the person, business or organization stated on the check for firearms, ammunition, firearm accessories and firearm services. Checks include the date written, payee, monetary amount and payer.

PAYMENT CARD

Physical card issued by a financial institution or card network, typically connected to a cardholder account, used to pay for firearms, ammunition, firearm accessories and firearm services.

Examples: debit card, credit card, charge card, prepaid card

DEBIT CARD

Physical card issued by a financial institution which deducts money directly from a cardholder’s checking account when used to pay for firearms, ammunition, firearm accessories and firearm services.

CREDIT CARD

Physical card issued by a financial institution or card network which allows cardholders to borrow funds up to their credit limit to pay for firearms, ammunition, firearm accessories and firearm services under the condition cardholders pay back the borrowed money, plus applicable interest and agreed upon charges, in full or partially by the billing date or over time.

For more: Credit Card Payment Definitions

CHARGE CARD

Physical card issued by a card network which allows cardholders to borrow uncapped funds to pay for firearms, ammunition, firearm accessories and firearm services under the condition cardholders pay back the borrowed money, without interest, in full by the billing date. Charge cards are typically associated with reward programs.

PREPAID CARD

Physical card issued by a card network or business with a monetary value stored on the card itself, not in an account maintained by a financial institution. Prepaid cards are either open loop, which can be used to pay for firearms, ammunition, firearm accessories and firearm services anywhere they are accepted, or closed loop, which can only be used to pay for to pay for goods and services at specific merchants. Also referred to as a gift card or store value card.

VIRTUAL CARD

Digital card issued by a virtual card provider for protected online card transactions for firearms, ammunition, firearm accessories and firearm services. Virtual cards are assigned a random card number for single-use transactions to act as a security buffer between the merchant and the customer’s funding source (e.g., financial institution account).

DIGITAL WALLET

Digital payment service on an electronic device (e.g., mobile phone), often connected to a debit or credit card, used to pay for firearms, ammunition, firearm accessories and firearm services. Also referred to as a mobile wallet or e-wallet.

Examples: Apply Pay, Samsung Pay, Venmo

ACH TRANSFER

Electronic transfer of money from financial institution to financial institution processed through the Automated Clearing House network. ACH transfers are processed as either debit or credit transactions.

Examples: external funds transfer, person-to-person payments, bill payments, direct deposit

ACH DEBIT

ACH transfer initiated by the payee in which money is pulled from the payer’s financial institution account. ACH Debit transfers are often used to process recurring payments.

Example: utility bills

ACH AUTO-DEBIT

Recurring ACH debit transaction in which money is automatically pulled from a financial institution account. ACH Auto-Debit payments require the payer authorize a payee to request a withdrawal of funds from their financial institution account at a regular interval. Also referred to as autopsy.

Example: mortgage payments