Electronic Payment Methods

There seems to be a lot of misconceptions about the various payment methods and their "protections". While you may be afforded such protections in the course of normal online purchases, it's important to note that most processors actually have clauses prohibiting the use of their services for firearms and certain firearm related accessories.

Below is a list of commonly used electronic payment methods and their applicable acceptable use policies:

PayPal

PayPal's Acceptable Use Policy is outlined here:

Prohibited Activities

You may not use the PayPal service for activities that:

  1. violate any law, statute, ordinance or regulation.
  2. relate to transactions involving (a) narcotics, steroids, certain controlled substances or other products that present a risk to consumer safety, (b) drug paraphernalia, (c) cigarettes, (d) items that encourage, promote, facilitate or instruct others to engage in illegal activity, (e) stolen goods including digital and virtual goods, (f) the promotion of hate, violence, racial or other forms of intolerance that is discriminatory or the financial exploitation of a crime, (g) items that are considered obscene, (h) items that infringe or violate any copyright, trademark, right of publicity or privacy or any other proprietary right under the laws of any jurisdiction, (i) certain sexually oriented materials or services, (j) ammunition, firearms, or certain firearm parts or accessories, or (k) certain weapons or knives regulated under applicable law.
  3. relate to transactions that (a) show the personal information of third parties in violation of applicable law, (b) support pyramid or ponzi schemes, matrix programs, other "get rich quick"schemes or certain multi-level marketing programs, (c) are associated with purchases of annuities or lottery contracts, lay-away systems, off-shore banking or transactions to finance or refinance debts funded by a credit card, (d) are for the sale of certain items before the seller has control or possession of the item, (e) are by payment processors to collect payments on behalf of merchants, (f) are associated with the sale of traveler's checks or money orders, (h)involve currency exchanges or check cashing businesses, (i) involve certain credit repair, debt settlement services, credit transactions or insurance activities, or (k)
  4. involve offering or receiving payments for the purpose of bribery or corruption.
  5. involve the sales of products or services identified by government agencies to have a high likelihood of being fraudulent.

Venmo

Venmo is a subsidiary of PayPal, and as such has similar restrictions:

Prohibited Transactions

You may not use Venmo to conduct transactions that:

  1. violate applicable law;
  2. are fraudulent;
  3. are made for a business or commercial purpose or that involve the purchase or sale of goods or services, with the exception of transactions expressly authorized by Venmo, for example, those conducted via (i) approved merchant websites or apps that are authorized by Venmo to display the Venmo button as a payment method or (ii) using the Venmo Debit Card at merchants that accept the Venmo Debit Card as a form of payment;
  4. involve gambling, gaming and/or any other activity with an entry fee and a prize, including, but not limited to casino games, sports betting, horse or greyhound racing, lottery tickets, other ventures that facilitate gambling, games of skill (whether or not it is legally defined as a lottery) and sweepstakes unless the operator has obtained prior approval from Venmo and the operator and customers are located exclusively in jurisdictions where such activities are permitted by law;
  5. infringe any third party’s copyright, patent, trademark, trade secret or other intellectual property rights, or rights of publicity or privacy (including, without limitation, transactions that involve counterfeit goods);
  6. involve tobacco products, prescription drugs and devices, drug paraphernalia, narcotics, steroids, certain controlled substances or other products that present a risk to consumer safety;
  7. involve items that encourage, promote, facilitate or instruct others to engage in illegal activity;
  8. involve items that promote hate, violence, racial intolerance, or the financial exploitation of a crime;
  9. involve ammunition, firearms, firearm parts or accessories and any weapons or knives regulated under applicable law;
  10. involve pornography, obscene material or otherwise objectionable content or activities;
  11. are defamatory, libelous, unlawfully threatening or unlawfully harassing;
  12. are made for the purpose of earning rewards, perks, miles, points, etc. with your credit card, debit card, or bank account or are intended to test credit card behaviors or that Venmo, Visa, MasterCard, American Express or Discover reasonably believe to be an abuse of the credit card system or a violation of credit card association rules;
  13. show the personal information of third parties in violation of applicable law;
  14. support pyramid or ponzi schemes, matrix programs, other "get rich quick" schemes or certain multi-level marketing programs;
  15. are associated with purchases of annuities or lottery contracts, lay-away systems, off-shore banking or transactions to finance or refinance debts funded by a credit card; and/or
  16. are otherwise prohibited by, or would constitute a breach of, the Venmo User Agreement.

Cash App

While Cash App doesn't seem to have a clear acceptable use policy on their website, they are a subsidiary of Square Inc., who does:

Prohibited Goods and Services with Square Point of Sale

Information outlining what you may not sell when you use Square.

Square strives to provide a safe environment for both buyers and sellers. As such, we do not permit the sale of certain goods and services that are listed in Square’s Terms. In this agreement, you confirmed that you will not accept payments in connection with the following businesses or business activities:

  1. Any illegal activity or goods
  2. Buyer or membership clubs, including dues associated with such clubs
  3. Credit counseling or credit repair agencies
  4. Credit protection or identity theft protection services
  5. Direct marketing or subscription offers or services
  6. Infomercial sales
  7. Internet/mail order/telephone order pharmacies or pharmacy referral services (where fulfillment of medication is performed with an Internet or telephone consultation, absent a physical visit with a physician including re-importation of pharmaceuticals from foreign countries)
  8. Unauthorized multi-level marketing businesses
  9. Inbound or outbound telemarketers
  10. Prepaid phone cards or phone services
  11. Rebate based businesses
  12. Up-sell merchants
  13. Bill payment services
  14. Betting, including lottery tickets, casino gaming chips, Fantasy Football, off-track betting, and wagers at races
  15. Financial institutions offering manual or automated cash disbursements
  16. Prepaid cards, checks, insurance or other financial merchandise or services
  17. Sales of money-orders or foreign currency by non-financial institutions
  18. Wire transfer money orders
  19. High-risk products and services, including telemarketing sales
  20. Service station merchants
  21. Automated fuel dispensers
  22. Adult entertainment oriented products or services (in any medium, including Internet, telephone or printed material)
  23. Sales of (i) firearms, firearm parts or hardware, and ammunition; or (ii) weapons and other devices designed to cause physical injury
  24. Drug paraphernalia
  25. Occult materials
  26. Hate or harmful products
  27. Escort services
  28. Bankruptcy attorneys or collection agencies engaged in the collection of debt
  29. Internet/mail order/telephone order of age restricted products (e.g., tobacco)

Zelle

Zelle, who does prohibit transactions involving firearms, is the only provider on the list who does not specifically prohibit firearm accessories in their Prohibited Uses:

Prohibited Uses

You agree that you will not use the Service to request, send or receive money related to any of the following:

  • Pharmaceuticals and other controlled substances;
  • Illegal drugs;
  • Drug paraphernalia;
  • Firearms, ammunition or other weapons;
  • Sexually oriented activities or materials;
  • Pornography;
  • Obscene or offensive activities or materials;
  • Materials or activities that promote intolerance, violence or hate;
  • Ponzi or pyramid schemes;
  • Illegal gambling, gaming, lotteries or sweepstakes;
  • Traveler’s checks, money orders, equities, annuities, or currencies, including digital currencies, such as bitcoins;
  • Counterfeit materials;
  • Infringement on the copyright, patent, trademark, trade secret or other intellectual property rights of Zelle, a Network Financial Institution, another User or any other third party;
  • Terrorist funding;
  • Fraud;
  • Scams;
  • Money laundering; or
  • Any other illegal activity or unlawful purpose.

What does this mean?

Well, that's subjective. From a legal standpoint, a good portion of transactions conducted on this subreddit would directly violate the acceptable use policies of PayPal, Venmo and Cash App. Items such as upper receivers, triggers, barrels, etc. are generally considered key firearm related accessories. However, other items such as optics, chest rigs, stickers, etc. are perfectly acceptable.

The real issues arise when a buyer or seller chooses to use PayPal for a prohibited item under the assumption that they are "protected" by PayPal's Buyer/Seller Protections -- when they are, in fact, not. Should PayPal become aware of the nature of the item being disputed, they will more often than not reverse the transaction in favor of the buyer and ban the seller's account (and occassionally the buyer as well) -- thus absolving themselves of the dispute and any protections afforded to the seller.

This is less of an issue with services such as Venmo or Cash App who do not explicitly afford any such protections to either the buyer or seller, however, they will still permanently ban the accounts of both parties -- and in some cases, such infractions on Venmo may also result in your PayPal account(s) being affected as well (remember, Venmo is owned by PayPal).

How do I protect myself?

Good question! Unfortunately, there's no simple answer. Due to the nature of the items being offered in this subreddit, one must rely heavily on their "gut" feeling and overall "trust" of the parties involved. As a buyer, you should always check the sellers flair and even do a cursory "dive" into the sellers profile to get a feel for their patterns. Don't be afraid to walk away from a deal if it seems "too good to be true" -- in many cases, it is. However, in the end, it's still a leap of faith. Fortunately, even though such transactions are prohibited on PayPal, you're still likely to get a refund in the event that you're scammed or if the item arrives damaged, etc. PayPal tends to side with the buyer in most instances.

As a seller, especially when dealing with prohibited items, it is not in your best interest to use PayPal exactly for the reason listed above: PayPal tends to side with the buyer, and especially in the case of a prohibited item, the buyer needs only to mention that fact and you're almost certainly going to lose the funds as well as your account. For that fact alone, sellers may be more "protected" with services such as Zelle, Cash App, or Venmo -- at the cost of protections to the buyer.

Edit Report
Pub: 30 Dec 2020 18:33 UTC
Edit: 12 Aug 2021 17:19 UTC
Views: 315