Visa, Mastercard and Discover announced they will pause a plan to implement a new merchant category code for the nation’s gun retailers after political pressure from Republicans.
The measure that was designed help flag potential mass shooters and gun traffickers. In the wake of mass shootings, some financial companies, including Mastercard and Visa, have explored the possibility of tracking gun sales through their payment systems. Advocates say this would help track suspicious transactions of firearms and ammunition and could help flag potential mass shooters and gun traffickers.
The merchant category code (MCC) system would have separately categorized sales at gun and ammunition stores. Nearly every retail item has a merchant category code. Merchant codes track where a consumer used a credit card, but don’t flag what specific items were purchased.
Previously, gun store sales were classified under a general merchandise or sporting goods category. The International Organization for Standardization, based in Geneva, approved the code in September 2022.
The New York Times found in 2018 that electronic payments were used to purchase the guns and ammunition used in some of the country’s most lethal mass shootings, including in Aurora, Colorado, San Bernardino, California, Orlando, Florida and Las Vegas.
But two dozen Republican attorneys general warned the credit card companies that month that they should not to go ahead with their plans.
In a letter to the CEOs of the card giants, the Republican officials said that adopting a new sales code for gun stores would harm the constitutional rights of gunowners and potentially violate consumer protection and antitrust laws.
Several state lawmakers proposed legislation that would prevent the companies from using the new code.
Under pressure, the companies backed down.
“Today, there are bills advancing in several states related to the use of this new code,” Mastercard said in a statement. “If passed, the result will be an inconsistency in how this ISO standard could be applied by merchants, issuers, acquirers and networks. It’s for that reason that we have decided to pause work on the implementation of the firearms-specific MCC.”
Visa said that 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.”
It’s the latest example of companies changing their plans based on pressure from Republican lawmakers.
Walgreens has said recently it will not distribute abortion medication in 21 states, bowing to pressure from anti-abortion lawmakers and lawsuits targeting the legality of abortion medication prescribed by doctors.