14 States Slam Credit Card Companies for About-Face on Gun Merchant Code

March 16, 2023

A coalition of 14 state attorneys general condemned credit card giants Visa, American Express and Mastercard for suspending their plans to start tracking gun and ammunition purchases through a specific merchant code.

In September the International Standards Organization (ISO) in Geneva, Switzerland, which sets merchant coding standards, approved the new gun-specific code, which identifies the type of merchant that took payment from that card for guns and ammunition, rather than what pops up currently—usually “sporting goods” or retail.”

Last month, Discover card’s company said it would implement to 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. All three companies announced their pause on implementing the code last week.

The 14-state group, led by New Jersey Attorney General Matthew Platkin, blasted the three companies for buckling under political pressure. In a letter sent to the CEOs of the three companies, the AGs called their about-face “unjustifiable.” 

The companies are getting pressure from both sides of the issue. Their pause on the code’s implementation followed pressure from 24 Republican-leaning states that are seeking to bar or limit the voluntary merchant code after some Republican politicians argued the code could violate the privacy of citizens lawfully buying guns.

In a statement, Visa indicated that legal backlash had also factored into its postponement.

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

Sens. Bob Menendez (D-NJ) and Elizabeth Warren (D-MA) on Wednesday urged federal regulators to issue guidance to speed adopting a new merchant category code to identify gun and ammo sales.

Warren was among more than a half-dozen Congressional lawmakers last year who pressed the major credit card companies to create the new merchant code. In a letter to the companies, the lawmakers said the gun-specific code 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 gun-specific merchant code is aimed at identifying firearms sellers. It would identify the type of store where consumers shopped but not the individual items purchased with their credit card.

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