Dive Brief:

  • Card companies American Express and Discover Financial Services halted implementation of a new gun merchant category code after their larger rivals Visa and Mastercard did the same. The companies’ separate statements on the issue followed news reports that the biggest players were holding off.
  • Visa and Mastercard paused their plans on implementing the code, Bloomberg reported Thursday. In statements, they noted a handful of states are considering legislation that takes aim at using the code. The code would be used to identify purchases made at gun and ammunition stores with credit or debit cards.
  • “To continue alignment and interoperability with the industry, Discover is removing the new merchant category code,” a Discover spokesperson said in a statement Thursday.

Dive Insight:

A Visa spokesperson in an emailed statement noted the company’s interest in conducting its business in a law-abiding manner. San Francisco-based Visa is the largest U.S. card network company.

“Multiple U.S. states are considering legislation to prohibit or restrict the use of the new merchant category code (MCC) for gun and ammunition stores,” the Visa spokesperson said in the email. “There is now significant confusion and legal uncertainty in the payments ecosystem, and the state actions disrupt the intent of global standards. Accordingly, Visa is pausing implementation of the MCC.” 

When Visa’s spokesperson was asked about a possible date for proceeding with implementation of the code, or what might lead the company to resume implementation, the spokesperson declined to comment.

The code was set to be part of Discover’s next policy and product update for merchants and payment partners in April, Reuters reported last month. Discover had said it was following payment network peers with its implementation plans.

A spokesperson for Mastercard weighed in with a similar comment about the states pursuing legislation regarding the use of the new code, and the need for consistency.

“If passed, the result will be an inconsistency in how this ISO standard could be applied by merchants, issuers, acquirers and networks,” the emailed Mastercard statement said. “It’s for that reason that we have decided to pause work on the implementation of the firearms-specific MCC.”

Late in the day, American Express said the same. “Due to proposed legislation in several U.S. states related to ISO’s newly issued merchant category code for gun and ammunition shops, we are pausing the process of working with third-party partners to implement this code, consistent with the industry, the Amex statement said.

The Geneva, Switzerland-based International Organization for Standardization approved the new merchant code for gun and ammunition shops in September 2022. It was published last month, according to an ISO spokesperson. 

Use of the new code is voluntary and “eventually left up to the users in the industry,” ISO Spokesperson Sandrine Tranchard said last month.

The gun merchant code has been controversial from the outset. Gun control advocates, state officials and pension leaders called for its creation last year as high-profile mass shootings continued to occur across the country, including in Uvalde, Texas and Highland Park, Illinois. Proponents touted it as a way to track suspicious gun purchases made with credit or debit cards.  

But Republicans have called the move a threat to consumer privacy and gun rights. Republican legislators in a handful of states, including Florida, West Virginia and Oklahoma, have drafted bills taking aim at the gun code. A group of Republican attorneys general last fall called on the CEOs of Visa, Mastercard and American Express to drop plans to use the code. 

One of those attorneys general, Montana Attorney General Austin Knudsen, on Thursday cheered the decisions by the card networks, but urged them to go further. 

“Visa and Mastercard came to the correct conclusion,” Knudsen said in a statement. “However, they shouldn’t just ‘pause’ their implementation of this plan — they should end it definitively.”

“This measure will do nothing to improve public safety while invading consumer privacy and inviting coordination between corporations and government agencies to erode Americans’ fundamental right to keep and bear arms,” Knudsen said in the statement.

The anti-gun violence organization Brady condemned the card network companies’ moves and urged them to reconsider their decisions.

“It is shameful to hear that credit card companies Visa and Mastercard have caved to the gun lobby’s transparent political ploys,” Brady President Kris Brown said in an emailed statement. “Having a dedicated process to flag troubling and suspicious firearms purchases, like they already do to detect other fraudulent purchases, is a common-sense strategy for companies to save lives and prevent the next mass shooting.”


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