High-risk processing · Pawn shops
A pawn shop is two businesses under one roof: a store and a lender. Processors underwrite each side differently.
✓ Matched to processors that approve your category. Rates are quoted to your business.
Short answer: Apply with a processor that approves pawnbrokers. Underwriting usually asks for your state pawnbroker licence, business registration, statements and how you handle loan disclosures and holds on pledged goods. Pawn lending is regulated, including federal Truth in Lending and Military Lending Act rules where they apply.
Key facts
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Most of a pawn shop's card volume looks like ordinary retail: jewelry, tools, electronics and instruments sold at the counter. The other side of the business, pawn loans, is consumer lending, and lending carries its own state licenses, federal disclosure rules and card-network restrictions. Processors want to see that the two are kept apart.
Merchant Fund Express works with processors that approve pawn shops. We set up the retail side and, where the processor allows it, the loan-payment side, and we explain what can and cannot be paid by card.
Pawn loans are regulated consumer credit. Card networks and processors often limit how loan payments and redemptions can be paid, and some only allow debit.
Stolen-property risk is why most cities require transaction reporting and holding periods. Underwriters ask how you comply.
Shops that buy, pawn or sell guns need a federal firearms license and the same transfer process as a gun store.
Jewelry and electronics sales attract fraud attempts, especially card-not-present orders through online marketplaces.
Lending disclosures. Pawn loans are consumer credit, so federal Truth in Lending rules (Regulation Z) apply alongside state pawn statutes that set terms, fees and holding periods. Loans to active-duty service members and their dependents are also covered by the Military Lending Act.
Paying a loan with a card. Card-network and processor rules commonly restrict using a credit card to repay a loan, and many processors only allow debit cards for pawn payments and redemptions. Your setup should keep loan payments in their own category so retail sales are not caught up in a review.
Holding and reporting. Most cities require pawn and secondhand transactions to be reported, often electronically, and items held for a period before resale. Your processor will not check this daily, but an application that shows it is in place is approved faster.
| Retail sales | Loan payments and redemptions | |
|---|---|---|
| What it is | Sale of forfeited or purchased goods | Interest, fees and principal on pawn loans |
| Card acceptance | Credit and debit, card present or online | Often debit only, by processor policy |
| Rules | Sales tax, secondhand reporting | State pawn law, Regulation Z, Military Lending Act |
| Best practice | Normal retail setup | Separate category or account, clear receipts |
Call (305) 384-8391. Tell us what you sell, how you sell it (counter, online, delivery) and roughly how much card volume you run. If you already process, have a recent statement nearby for a free review.
We work with processors that knowingly accept this business type instead of ones that close accounts once they notice what you sell. Your equipment is matched to the processor that approves you.
We tell you exactly which licenses, IDs and statements the application needs, so underwriting is not a slow back-and-forth.
Once approved, your terminal or gateway is set up and tested, and you keep one number to call when something needs attention.
Merchant Fund Express also arranges business funding, and we would rather be straight with you about it on this page than on the phone. Funding eligibility is set by industry code (NAICS), and pawnshops are classified as lenders, and lenders and non-bank finance companies are on the restricted list for the bank-style tier. The revenue-based tier reviews some restricted categories, and we will tell you plainly what applies.
The eligible industries page explains how codes are read, and funding requirements lists the revenue, time-in-business and bank-activity thresholds. If funding is not a fit, processing still is: the two are separate products, and we will tell you which one we can help with on the first call.
Rules summarized as of October 2026. Laws, card-network rules and processor policies change; this page is general information, not legal advice. Confirm current requirements for your state and city before you rely on them.
Often not. Many processors only allow debit cards for loan payments and redemptions. Retail purchases can generally be paid by credit card.
Not always, but loan payments should be categorized separately. We set it up the way the approving processor requires.
Yes. You will need an FFL and the same transfer process as a firearms dealer, and it must be disclosed.
Yes, but disclose those channels. Card-not-present sales of jewelry and electronics are reviewed for fraud controls.
No. Processing is quoted after a short call, and we review your statement for free.
Call Merchant Fund Express. We match you to a processor that approves your category, prepare the application with you and stay reachable after you go live.
