Buy Now, Pay Later (BNPL) has reshaped how consumers approach spending by breaking purchases into smaller installments with minimal or no interest. For merchants, BNPL provides a powerful conversion tool, especially in industries with high average order values. But for regulated industries like firearms and CBD, the question remains: is BNPL allowed—and if so, under what conditions? The answer is nuanced. While some merchant services providers offer installment options for low-risk businesses, access to these features for CBD or gun retailers is still highly restricted. Because of federal and card network rules, BNPL providers often avoid facilitating payments for products that require FFL transfers or are under FDA or DEA scrutiny. However, specialized providers are emerging that make installment payments possible in high-risk verticals—assuming the right compliance frameworks are in place. Understanding your payment provider’s policies, your industry’s legal constraints, and how these factors interact with BNPL infrastructure is essential to evaluating whether this payment model is right for your business.
Why Firearms and CBD Fall Into BNPL Gray Areas
BNPL is largely governed by risk assessment—both in terms of consumer default risk and regulatory scrutiny. Products like firearms and CBD fall into high-risk categories not because of the payment model itself, but due to the nature of the goods being sold. Firearms are federally regulated, and most purchases must go through FFL transfers, which add complexity to order fulfillment[1]. Additionally, firearms cannot be shipped directly to consumers in most cases, raising concerns over BNPL chargebacks, delivery disputes, and compliance audits. Similarly, CBD remains in a regulatory gray zone at the federal level, especially when marketed as a wellness or therapeutic product. Despite its legality in most states, many BNPL services avoid working with CBD retailers due to liability concerns, even when merchants have transparent sourcing and testing protocols. These compliance risks often lead to a blanket ban on certain industries—even when the product being sold is completely legal. As a result, most mainstream BNPL apps do not allow integration with platforms that support gun sales or CBD eCommerce.
The Problem With Mainstream BNPL Integrations
Even if your eCommerce platform supports BNPL plugins, there’s no guarantee the provider will approve your product catalog. BNPL services like Klarna, Afterpay, and Affirm use automated scanning tools and risk scoring to flag restricted items. If a keyword in your product name or description matches a restricted term—such as “hemp,” “cartridge,” or “handgun”—your application may be denied or your merchant account frozen. This creates a false sense of readiness for high-risk businesses that rely on Shopify or WooCommerce plugins. Many merchants discover too late that their catalog violates the terms of their BNPL integration, resulting in order cancellations or provider blacklisting. Some retailers attempt to work around this by disguising SKUs or applying BNPL only to accessories, but this introduces other problems such as misrepresentation and refund complications[2]. If your business has ever run into a Venmo payment declined but I have money scenario, you understand how opaque and unforgiving payment infrastructure can be. The same limitations apply to BNPL in high-risk contexts—it’s not just about the money being there; it’s about whether the platform will accept the product.
BNPL Integration Through Alternative Processors
Some merchant services providers specialize in underwriting high-risk verticals and can support BNPL integrations through nontraditional processors. These platforms often work with private lending partners or regulated financing solutions to extend credit for firearm or CBD purchases.
Built-In Compliance for FFL Transfers
In the firearms industry, BNPL solutions must account for FFL transfers and delays in fulfillment. This means enabling delayed authorization, installment activation only upon verification, and compliance audits built into the transaction flow.
Inventory Sync with POS Management Software
When working with custom BNPL systems, integration with POS management software ensures inventory updates, transaction history, and payment schedules remain aligned. This reduces administrative errors and maintains transparency for both merchant and consumer.
Localized BNPL Options Based on Jurisdiction
Some high-risk merchants have found success by offering BNPL only in states where local regulations and banking partners permit it. This allows partial access to financing options while maintaining compliance across the broader business footprint.
BNPL Workarounds: What Merchants Are Doing Instead
Because mainstream BNPL remains off-limits to most firearm and CBD businesses, many retailers are finding workarounds that emulate installment functionality without violating payment rules[3]. Some merchants are offering in-house layaway systems, where the customer pays in portions before the item is shipped. Others use third-party invoicing platforms that allow recurring billing, bypassing the need for a direct BNPL app. While these alternatives lack the seamless UX of Klarna or Affirm, they provide a degree of flexibility for customers and control for merchants. Still, these workarounds must be structured carefully to avoid legal missteps, especially in firearm sales that require age verification, background checks, and delivery through FFL transfers. A small misstep—such as shipping prior to payment completion or failing to validate customer identity—can result in regulatory penalties or loss of your merchant account. Businesses exploring installment alternatives should do so under the guidance of a qualified merchant services provider with experience in regulated commerce.
Why Some Platforms Still Block BNPL for Regulated Goods
It’s important to understand that restrictions on BNPL are not always coming from the BNPL provider itself. Many of the limitations originate from eCommerce platforms, banks, or card networks that define and enforce content guidelines[4]. For example, platforms like Amazon or Shopify use automated flagging systems that reject catalog items associated with prohibited terms—even when merchants are using approved third-party processors. If you’ve ever asked “Why is Amazon not accepting Venmo?” or had trouble enabling payments on third-party plugins, this is often why. Financial platforms are under increasing pressure to enforce strict content compliance across their ecosystems. BNPL, as a financial product, is subject to even greater scrutiny—meaning platform policies can be more restrictive than federal law. For high-risk merchants, this creates a layered challenge: not only must you satisfy regulatory compliance, but also platform- and processor-level restrictions that may block functionality arbitrarily. The safest path forward is to work with a merchant services provider that can help you navigate all three layers simultaneously.
Conclusion
Buy Now, Pay Later can be a powerful tool—but in the world of firearms and CBD, it’s a tool that comes with steep limitations. Between platform restrictions, legal compliance, and banking risk models, most mainstream BNPL services are off-limits to high-risk products. That doesn’t mean installment-based payments are impossible. With the right merchant services provider, businesses can implement alternative solutions that offer flexible payment terms while satisfying legal and financial requirements[5]. From POS integration to FFL compliance workflows and credit risk management, custom solutions are emerging that serve the unique needs of regulated commerce. At Payment Nerds, we specialize in solving payment challenges for high-risk merchants—whether it’s navigating FFL transfers, building installment billing systems, or integrating risk-aware POS management software. If your business is exploring BNPL options but keeps running into roadblocks, our team can help you assess what’s possible and build a payment strategy that supports growth, compliance, and customer trust.
Sources
- Visa. “Regulated Product Risk Guidelines for Installment Billing.” Accessed April 2025.
- Federal Trade Commission. “Buy Now, Pay Later: Consumer Protections & Limitations.” Accessed April 2025.
- ATF. “Firearm Transfers and Federal Compliance Rules.” Accessed April 2025.
- Harvard Business Review. “How BNPL Is Evolving in Regulated Industries.” Accessed April 2025.
- PCI Security Standards Council. “Installment Payments and PCI DSS Compliance.” Accessed April 2025.
