About the Pawn Shop Industry
Pawn shops are special businesses that lend customers cash for short term loans in exchange for valuable items. They also are marketplaces to buy and sell used goods, offering consumers affordable alternatives to new products. But because of the nature of their transactions and the high risk of pawned goods, these businesses have a hard time with payment processing.
Pawn shops need a payment solution that can handle in store and online transactions, offer customers multiple payment methods, credit cards, debit cards and digital wallets. With high volume of small ticket transactions and fluctuating collateral values, pawn shop owners need a reliable and secure partner to ensure smooth payment processing and protect against fraud.
Why Pawn Shops Are High Risk
Several reasons why pawn shops are considered high risk, which makes them harder to work with for traditional payment processors.
- Stolen Goods: Pawn shops are a target for thieves to get rid of stolen items. While there are regulations in place to prevent this, the possibility of getting stolen goods adds risk to payment processors.
- Chargeback Risk: Because of the nature of pawned goods and loans, pawn shops have a higher dispute and chargeback rate, which increases the financial risk to processors.
- Collateral Value Fluctuation: Collateral values can change over time, inventory is uncertain and transactions are complicated.
- Financial Volatility: Some pawn shops have fluctuating business volume, which adds to the financial uncertainty.
For these reasons, finding a payment processor that caters to high risk businesses like pawn shops is key to overcome these challenges.
The Advantage of the Right Payment Solution for Pawn Shops
Choosing the right payment processor is crucial to your pawn shop’s success despite being high risk. The benefits of choosing a high risk payment processor includes:
- High Risk Expertise: A payment processor that has experience with high risk industries understands the challenges you face and can offer solutions that fit your needs.
- Fraud Prevention: Advanced security features like tokenization and real time fraud monitoring reduce fraud and chargebacks.
- Seamless Payment Integration: A trusted payment processor can integrate with your point of sale (POS) and e-commerce platforms for a unified payment experience in store and online.
- Multiple Payment Options: Offering multiple payment methods – credit and debit cards, digital wallets and more – is convenient for customers and your shop.
- Data Driven Insights: Robust reporting tools to track sales, customer behavior and inventory so you can make informed decisions and optimize your business
Pawn Shop Payment Options
Not all pawn shops are the same, so it’s worth exploring the different merchant account options. Payment Nerds offers solutions for pawn shops:
Retail Payment Solutions
For in store transactions, these solutions integrate with your POS and allow you to accept payments via card readers, contactless payments and EMV chip technology. Fast and secure transactions for your customers and flexible for high volume, low ticket sales.
Online Payment Solutions
As pawn shops start to sell online, having an eCommerce payment solution is a must. Our online payment gateways are designed with fraud protection in mind, reducing exposure to cybercriminals and secure your transactions.
Phone Payments
Some pawn shops may need to process payments over the phone, especially for items bought online or via mail. Our virtual terminals allow you to process card payments without the physical card present, for customers who can’t come in person.
Choosing a Payment Processor for Your Pawn Shop
When choosing a payment processor, look for a partner that understands the pawn shop industry. Consider:
- High Risk Experience: Your processor should have experience with high risk businesses, so they can handle chargebacks, fraud prevention and transaction security.
- Flexible and Scalable Solutions: Choose a processor that offers solutions for your business, from in store POS systems to online payment gateways and virtual terminals for phone transactions.
- Transparent Pricing: Look for a payment processor that offers competitive rates with no hidden fees.
At Payment Nerds we provide high risk merchant accounts for pawn shops, custom solutions for your business.
What You’ll Need for Merchant Services
Getting started is easy, but you’ll need to provide a few documents to set up your merchant account:
- Photo ID: Government issued ID to verify the business owner.
- Signed Merchant Application: The application to set up your account.
- Voided Check or Bank Letter: To verify your banking information for transaction processing.
- Bank Statements: 3 months of bank statements to show your business history.
- Processing History: If applicable, previous payment processing statements to help your processor understand your business.
- Business Documentation: Business licenses, certifications and other legal documents to verify your business.
Integrated Software Solutions for Seamless Payment Processing
Integrated with key software tools can make your payment processing system more efficient. Consider integrating your merchant account with:
- Customer Relationship Management (CRM) Software: Track customer interactions, sales and payment history to improve customer service and marketing.
- Inventory Management Software: Monitor stock levels, sales trends and inventory turnover, so you always have the right products in stock.
- Accounting Software: Integrate with your accounting system to automate financial tracking and bookkeeping.
