This is not completely accurate. Under a previous Presidential administration, the firearms industry was included in "Operation Choke Point" which was ostensibly aimed a Pay Day Lenders and other shady financial operations.
It put a lot of pressure on financial institutions to deny purchases of firearms and associated products by people legally buying those items.
Some operations went along voluntarily, others were coerced.
Even though the program officially ended in 2017, some banks still operate under the same policies they enacted while the program was still in effect.
PayPal issued and still does credit cards and lines of credit. As such, it came under those rules. At the time Ebay owned PayPal and had a policy for a while of not allowing sales of firearm parts, including magazines. They will now, but only up to 10 rounds and still don't allow standard capacity magazines to be sold if those magazine are more than 10 rounds.
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Originally Posted by Absalom
It helps to free yourself from the notion, popular in the gun culture but largely nonsense, that there are nefarious anti-gun motivations behind the corporate policies pertaining to any dealings with guns.
In the real world, these are mostly driven by concerns about potential legal liability. In a few cases, there may be marketing considerations, like wanting to appear “progressive” (which today means anti-gun) to an important customer base.
Beyond that, neither Paypal nor any other business entity gives a flying fart whether you buy and sell machine guns or automatic knives.
So as long as you don’t call your outfit “Dangerous People Killers Inc.” or something else obvious, it has been my experience that Paypal transactions go through just fine.
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