Card networks halt plans for firearms merchant code

Bing Guan/Bloomberg

Visa, Mastercard, Discover and American Express on Thursday said they're halting  plans to adopt a new merchant code for guns and ammunition stores following resistance from lawmakers in certain states who fear surveillance of firearm purchases.

The move comes six months after the Geneva-based International Organization for Standardization (ISO), which manages global ISO merchant category codes, approved the addition of a code to identify out-of-the-ordinary purchases at stores that primarily sell guns and ammunition.

New York-based Amalgamated Bank played a key role in repeatedly filing applications with ISO to approve the new MCC. The code would give stores selling guns and ammo their own MCC to more easily flag transactions, such as multiple-gun purchases at unusual times and locations, that have been associated with mass shootings and gun violence. Use of the code could prompt the filing of a suspicious activity report with law enforcement.

The MCC would not link gun purchases to specific buyers, Visa said in a blog post last year.

However, Florida lawmakers began pushing back early this year on implementation of the new MCC, which would have taken effect this year. State Sen. Danny Burgess was among lawmakers touting the proposed "Florida Arms and Ammo Act" to prohibit businesses from "tracking" Florida residents' ammo and firearm purchases.

Bloomberg was first to report on Thursday that certain card networks were halting plans to roll out the new MCC

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"Multiple U.S. states are considering legislation to prohibit or restrict the use of the new MCC for gun and ammunition stores," Visa said in a statement on Thursday. "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," the statement continued.

Mastercard also said it will  "pause work" on rolling out the firearms-specific MCC for now. 

"Today there are bills advancing in several states related to the use of this new code. If passed, the result will be an inconsistency in how this ISO standard could be applied by merchants, issuers, acquirers and networks," Mastercard said in a statement. 

Discover also said it will not move forward with plans to add the new MCC for gun store purchases.

"To continue alignment and interoperability with the industry, Discover is removing the new MCC 5723 from our April 2023 network release," the network said in a statement.

American Express echoed the comments of the other companies, saying its decision to pause work on implementation of the code "is consistent with the industry."