By: Austin Denson, Marketing Coordinator
Following the Las Vegas tragedy, future gun regulations may pose compliance issues for acquiring banks and other payment service providers. United States federal firearm regulations place no limit on the number of guns or accessories one may purchase. However, some laws are subject to change in wake of the recent shooting, which left 58 killed and nearly 500 injured.
Gun modifications and regulations
Las Vegas gunman, Stephen Paddock, accumulated over 33 firearms in one year. This is a remarkably high number considering the average gun-owning household was bearing eight in 2013 (BATFE, 2013). Among the weapons and ammunition found, authorities discovered over a dozen “bump stocks” in Paddocks hotel room. Once again, this after-market gun modification has gained national attention.
Bump stocks utilize a rifle’s recoil to bounce its stock back and forth off the shooter’s shoulder. Suddenly, a semi-automatic rifle fires in a way of a fully automatic. This modification allowed Paddock to rapidly fire rounds of ammunition at thousands of defenseless concertgoers.
Last Wednesday two high-profile congressmen announced the preparation of a bipartisan bill to outlaw bump stocks completely. 218 votes are required for the bill’s passage, which has already attracted support from both Republicans and Democrats.
These after-market gun modifications are legal to sell online. However, laws are likely to change after the National Rifle Association (NRA) recently broke silence in a public announcement:
“The National Rifle Association is calling on the Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE) to immediately review whether these devices comply with federal law. The NRA believes that devices designed to allow semi-automatic rifles to function like fully-automatic rifles should be subject to additional regulations,” a statement that could potentially change gun e-commerce laws indefinitely.
In recent years, gun manufacturers and distributors have turned to e-commerce to increase sales. Sites like Gunbroker.com, established in 1999, offer an efficient platform to conveniently buy and sell firearms, accessories and ammunition. This is an example of the types of websites that acquirers and other payment players must pay careful attention to.
Within the last week, many shops that sold bump stocks appear to be out of stock or have taken down the product pages completely. Some manufactures have temporarily disabled orders or have delayed their shipping and distribution time significantly (See Figure 1).
Figure 1: Recent change in bump stock inventory at gun shops and gun manufacture websites
Production vs. importation vs. exportation
Gun manufacturing in the United States has seen a substantial increase over the past decade. In 2015 just over 9.3 million firearms were manufactured (See Figure 2). Of that number 3.5 million were rifles alone. 5 million total firearms were imported in 2016 mostly from Austria, Brazil and Croatia. U.S. firearm exportation only reach 343 thousand in 2015. A wide margin if you compare the amount exported to the total manufactured and imported that same year.
Figure 2: Firearms manufactured in the United States (BATFE, 2017)
Threat to acquiring banks and payment providers
New gun laws may pose potential risks to acquirers doing business with said merchants. Payment players must pay close attention to ensure their portfolios remain complaint. In response, G2 will be re-reporting merchants that are selling weapons, bump stocks or other gun accessories that could cause risk for acquirers.
To help ensure acquirers, ISOs and payment service providers remain complaint with any sudden regulatory changes, G2 offers Persistent Merchant Monitoring and Marketplace Monitoring. These solutions identify merchant website content compliance issues and persistently monitor clients’ portfolios for ongoing risk.
Learn how G2 can help you comply with changing regulations, contact us today.