Credit card companies reverse course on tracking gun purchases

Credit card companies that planned to start tracking gun purchases have walked back their decision after public pressure, along with heat from attorneys general across half the country.

Frontline News reported last week that Discover Financial Services became the first payment network to announce that in April it will add a separate merchant category code (MCC) for gun retailers, which are currently categorized as “general merchandise”. The code will show where a purchase was made and the transaction amount, but not what was bought.

The International Standards Organization (ISO), which decides merchant categories, approved the classification in September. While other credit card networks such as Visa, Mastercard and American Express also agreed to implement the code, they did not set a date for doing so.

"We remain focused on continuing to protect and support lawful purchases on our network while protecting the privacy of cardholders," Discover told Reuters.

Amalgamated Bank proudly announced in September that their application for a new MCC for gun purchases had been approved.

“We all have to do our part to stop gun violence,” Amalgamated Bank President and CEO Priscilla Sims said. “And it sometimes starts with illegal purchases of guns and ammunition. The new code will allow us to fully comply with our duty to report suspicious activity and illegal gun sales to authorities without blocking or impeding legal gun sales. This action answers the call of millions of Americans who want safety from gun violence and we are proud to have led the broad coalition of advocates, shareholders, and elected officials that achieved this historic outcome.”

The move was seen as a victory for anti-gun operatives, including officials such as New York City Mayor Eric Adams and pension funds which have been pushing payment networks to track firearms purchases. The goal, according to Associated Press, was to help authorities predict if a mass shooting is about to occur based on gun purchasing patterns.

That same month, 24 attorneys general sent a warning letter to the CEOs of Mastercard, American Express, and Visa, expressing concern “about the legality of recent actions”.

“The new code will not protect public safety. Categorizing the constitutionally protected right to purchase firearms unfairly singles out law-abiding merchants and consumers alike,” they continued, before concluding ominously:

Be advised that we will marshal the full scope of our lawful authority to protect our citizens and consumers from unlawful attempts to undermine their constitutional rights. Please keep that in mind as you consider whether to proceed with adopting and implementing this Merchant Category Code.

On Monday, Reason reported that Discover has backtracked.

"To continue alignment and interoperability with the industry, Discover is removing the new merchant category code identified as MCC 5723 from our April 23.1 Network Release," the card network wrote in an email.

Mastercard also announced it would no longer be implementing the new code:

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. It's for that reason that we have decided to pause work on the implementation of the firearms-specific MCC.

Visa is taking similar action, according to Bloomberg.

The International Organization for Standardization (ISO), which approves MCCs, did not respond to a Frontline News request for comment.