Credit card codes caught in crossfire of America’s battle against gun violence

Earlier this month, the Switzerland-based International Organization for Standardization approved the creation of a new merchant code that will allow financial institutions to better detect and report suspicious activity related to the purchase of firearms and ammunition at standalone gun retail stores.

The ISO’s decision came following lobbying from Amalgamated Bank, New York city and state officials and the California teachers’ pension fund.

The new merchant category code — a four-digit number that credit card companies use to classify businesses — will apply to all purchases at gun and ammunition stores. Purchases of firearms and ammunition at other retailers, however, will not be categorized separately.

Gun-safety advocates view the decision by credit card companies as an important step that will help law enforcement investigate gun crimes, prevent mass shootings, and combat illegal weapons trafficking but Republican attorneys general of 24 states are threatening to “marshal the full scope of our lawful authority” as Visa, American Express and Mastercard adopt a new merchant category code.

In a letter sent to the CEOs of American Express, Mastercard, and Visa, the Republicans warned that tracking the data could lead to misuse, whether intentional or unintentional.

“Creating and tracking this data only matters if your institutions are considering using that information to take further, harmful action—like infringing upon consumer privacy, inhibiting constitutionally protected purchases by selectively restricting the use of your payment systems, or otherwise withholding your financial services from targeted ‘disfavored’ merchants,” said the GOP lawyers.

District of Columbia Attorney General Karl A. Racine responded by announcing that he will lead a coalition of 11 attorneys general supporting the recent decision of the world’s largest credit card companies to adopt the new merchant category code in order to support law enforcement efforts to combat the gun violence epidemic.

Racine are the attorneys general from California, Connecticut, Delaware, Hawaii, Illinois, Massachusetts, Minnesota, New Jersey, New York, and Oregon.

Visa on announced it would join Mastercard and American Express in implementing the new practice for firearms purchases after the ISO approved the new merchant category code for gun and ammunition stores when processing transactions.

The code will have no bearing on an individual’s ability to lawfully purchase firearms and is narrowly tailored so that it applies only to purchases made at independently-owned gun retail shops.

The decision by the credit card companies is viewed by gun-safety advocates as an important action that will help law enforcement investigate gun crimes, prevent mass shootings, and combat illegal weapons trafficking.

“When it comes to guns falling in the wrong hands, we must find upstream solutions before we’re faced with downstream consequences — because downstream consequences are lost lives,” said New York City Mayor Eric Adams, who urged credit card companies to adopt the code. “When you buy an airline ticket or pay for your groceries, your credit card company has a special code for those retailers. It’s just common sense that we have the same policies in place for gun and ammunition stores.”

The code will also support “red flag” laws that have been enacted to curb domestic terrorism and keep communities safe. The code does not prohibit firearm sales, regulate such sales, or otherwise prevent a consumer from making a gun purchase. The code is merely an administrative tool to gather data that would enhance law enforcement’s ability to do its job.

Racine previously led a group of 20 attorneys general in filing an amicus brief supporting an important new federal rule regulating “ghost guns”—unserialized weapons that are often made at home from weapon parts kits or partially complete frames and receivers and can be purchased without background checks. 

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