Pawn Shop Merchant Accounts – Get Pre-Approved Today

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Last Updated on July 7, 2023 by Corepay

Finding payment processing for pawn shop businesses is not always straightforward. While it can be easier to go with a low-risk processing solution such as Paypal, you risk having your processing terminated without notice. This article will break down everything you need to know about pawn shop merchant accounts for local and online stores.

You’ve come to the right place, whether you’re an established pawnshop or brand new and looking to learn about pawn shop payment processing.

Before diving deep, it’s important to note that banks and processors view pawn shops as high-risk businesses. This means you may pay a little more in fees to cover the banks’ risk and that you will need a high-risk payment processing solution.

pawn shop merchants

Applying For Your Pawn Shop Payment Processing

Applying for your pawn shop online merchant account is easy with Corepay. We try to make things as easy and smooth as we possibly can. 

Remember, the more information you can provide to us, the faster we start the onboarding process and get you up and running.

Here is a quick list to recap what you will need when applying with us:

  • Company EIN document
  • Financial statements – personal and business
  • Proof of operating address
  • Articles of incorporation
  • Principal’s driver’s license
  • Business plan – This is optional, but we would love to hear how you plan to expand and grow your business
  • Voided check proving business bank account

Why Are Pawn Shops Considered High-Risk Businesses?

pawn shop faq

Pawnshops are considered risky by banks and processors for a few different reasons. With pawnshops, one of the biggest concerns with payment processing is stolen goods. 

On top of stolen goods, chargebacks also come into play for online purchases.

Let’s take a look at the main concerns of pawnshops:

  • Stolen Goods: Pawnshops have always had a reputation for stolen goods. Banks understand that pawnshops could be purchasing stolen goods without knowing so. It is known that one-tenth of a percent of all pawned goods is identified as stolen. With this being said, the industry still gets a reputation for stolen merchandise.
  • Chargebacks: Since online purchases are card-not-present (CNP), there is more risk of potential chargebacks. Chargebacks not only cost the merchant in chargeback fees, but they also can put your business at risk of having your merchant account terminated or your prices raised.
  • High-Ticket Items: High-ticket items are widespread in pawnshops. This means your merchant account will need to be able to handle high-ticket purchases. You can read more about high-ticket merchant accounts here. Banks and processors typically consider high-ticket businesses high-risk as many purchases are CNP and higher ticket items tend to have more significant chargebacks. 

How To Choose Payment Processing For Your Pawn Shop

Finding the right match is tough in this industry. We understand that it might be frustrating trying to find processing, but we have a couple of tips to remember when choosing a payment processing partner.

First, be sure to pick a partner that specializes in high-risk processing and understands your industry. Second, be sure to shop around and explore a few different options. Finally, you want to establish some relationship with your processing partner as it will be one of your most important relationships as a merchant.

Was Your Pawn Shop Online Store Merchant Account Frozen?

If you have found yourself with a frozen merchant account, you’ve come to the right place. Simply fill out an application, and we will be in touch swiftly. 

There are many different reasons why your payment processing can get shut down, especially when you’re considered a high-risk merchant.

Pawn Shops MCC

The merchant category code for pawn shops is 5933.

Can Pawn Shops Use Paypal?

Unless you have established years in clean payment processing with your pawnshop business, Paypal will not work for you. Paypal does not work with high-risk industries, and while you might get up and running for a few months, you will end up with your account terminated and your funds frozen.

So, why does this happen? Paypal doesn’t perform their underwriting on your account until months down the line. This means all accounts will be originally accepted until Paypal performs their underwriting. 

We recommend you carefully check Paypal’s terms of services should you choose to use them for your business. If Paypal or another low-risk processor terminated your pawnshop merchant account, you’ve come to the right place. 

While this is unfortunate, we can quickly get your business back up and accepting payments again.

Why Choose Corepay

At Corepay, we have over two decades of high-risk credit card processing experience and are certain we can set you up with a pawnshop merchant account as well as get you affordable pricing.

On top of helping you with your merchant account, we are also confident we can reduce your chargeback ratio through our partner product, CB-ALERT

  • Competitive Rates: Choosing a payment processor that understands your business at an affordable price is critical. We are here to help your business grow with optimal profitability.
  • 24/7 Customer Service: Our team is always available to help with any questions or problems you may come across.
  • Quick Approvals: At Corepay, we can pre-approve accounts within 24-72 hours.
  • Security: We have a PCI-Level 1 secure payment gateway that is monitored around the clock and regularly tested for security issues
  • High Volume:  We have our own payment gateway, Netvalve, explicitly designed for high-risk companies processing high volumes

Types Of Goods Pawnshops Typically Process

Pawnshops typically deal with expensive items. So you can expect to find antique furniture, jewelry, coins, gold, silver, electronics, musical instruments, etc. As you can see from this list, many of these items can be stolen and sold for a quick buck, prompting banks to be on high alert.

Wrapping Up

Finding bespoke payment processing for pawnshops is no easy task. Like many industries, pawn shops are starting to find their home online, which means you will need to adapt to this business model. If you are looking for a processing partner who understands your needs and is ready to take your company to the next level, apply with us below.

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