Operation Choke Point has finally come to and end. At this point you may be asking yourself exactly how will this affect businesses that are considered high risk from a banking and payment processing prospective? The answer is a simple one. It means that the ability to conduct business has been restored for a great deal of companies across the country. Operation Choke Point was a federal government initiative that began in 2013.
What was Operation Choke Point?
It gave the United States Department of Justice the right to investigate banks, lending institutions, and payment processing specialists based solely on the industries they conducted business with. For example, if the Department of Justice considered a specific industry as high risk for fraud and money laundering, they were in essence black balled from banking and payment processing services. When Operation Choke Point first began, the federal government did not announce it to the public or the industries targeted.
The Department of Justice simply forced the banks and lenders to close long standing accounts without notice and little explanation. When business owners and operators inquired with their banks, they did not receive a clear cut answer. Instead, they were informed ]their business was considered too high of a risk. Freezing certain business from having the ability to maintain a bank account had a domino effect. Payment processing specialists, like Payment Savvy, were forced to stop partnering with these so called high risk businesses.
That meant that many industries could no longer accept credit and debit card payments from their customer base. Most consumer and business to business transactions are conducted with credit and debit card payments. This holds especially true for businesses dealing in bigger ticket items. A great deal of these legitimate companies simply could not survive. They ended up closing their doors which certainly is not good for the local and national economy. The few types of legitimate businesses dealing in cash had nowhere to deposit their money.
It became extremely difficult to manage daily operations. Most companies struggled. Other organizations simply gave up and closed their doors. However, businesses that deals in fraud and money laundering prospered due to the nature of cash. The road to Operation Choke Point may have been paved with good intentions, but in reality it was a complete and absolute disaster. As of August 2017, Operation Choke Point is a thing of the past. This is great news for legitimate businesses that were formerly black balled.
They include firearms and ammunition dealers, pawnshops, payday loan companies, online gambling sites, home based charities, online sellers of alcohol, tobacco, and pharmaceuticals, fireworks stands, and the adult industry to name a few. The only thing good that came out of Operation Choke Point is the lesson that it provides. Businesses should have the right to provide products and or services to any other company that they choose to work with. That is, if the other organization is operating in a legal manner.
Payment Savvy specializes in providing businesses of all types with the ability to accept credit and debit card payments in person and online. Please contact Payment Savvy today to review your options, apply for a merchant account, and to obtain answers to your questions. We look forward to hearing from you and working with your company.
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