Visa, AmEx & Mastercard Hold Off on Gun Purchase Code

March 10, 2023

The three credit card giants Visa, American Express and Mastercard all said on Thursday they have suspended their decision to start tracking gun and ammo purchases through a specific merchant code.

The announcement follows a concerted effort last year to convince the major credit card companies to create a specific merchant category code, which would identify the type of item purchased with that card as guns or ammunition, rather than what pops up currently—usually “sporting goods” or “retail.”

In September, the International Organization for Standardization, which decides merchant categories, approved launching the specific code for gun retailers. 

Last month, Discover card’s parent company said it would implement a gun-specific merchant code starting in April. That decision had followed the lead of Visa, Mastercard and American Express, which last fall said they would work to implement the new gun-specific merchant codes, though none of the three had given a start date.

However, proposed legislation emerged in several GOP-led states that seeks to bar or limit the voluntary merchant code after some Republican politicians argued the code could violate the privacy of citizens lawfully buying guns.

Mastercard spokesperson Seth Eisen said Thursday that such bills, if they became law, would cause “inconsistency” in how the code applies to merchants, banks and payment networks. 

Visa and American Express have also cited the states’ proposed legislation. In a statement, Visa indicated that legal backlash had also factored into its suspension.

“There is currently significant disruption and legal uncertainty in the payments ecosystem, with national actions disrupting the intent of global standards,” Visa said.

Last fall, Senators Elizabeth Warren (D-MA) and Dianne Feinstein (D-CA), along with six other members of Congress, wrote to the credit card companies urging them to implement the merchant codes. The lawmakers asserted the codes would “make it easier for financial institutions to monitor certain types of suspicious activities including straw purchases and unlawful bulk purchases that could be used in the commission of domestic terrorist acts or gun trafficking schemes.”

The new category code adopted by Discover will not show specific items purchased or allow banks to track specific purchases. The now-suspended codes of Visa or Mastercard did not do so either. 

Montana Attorney General Austin Knudsen, who led the 24-state Republican group, said in a statement Thursday, “Visa and Mastercard came to the right conclusion.” He added that the credit card companies should not simply “pause” the implementation of this plan, “they should end it definitively.”

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