New Merchant Code Approved for Card Purchases of Guns, Ammunition

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An international standards body has approved the creation of a merchant category code for gun retailers to identify credit card sales of guns and ammunition.

The International Organization for Standardization (ISO)—a non-governmental body based in Geneva, Switzerland that creates standards across various industries, including the financial services industry—has approved the new merchant category code for gun and ammunition stores, according to a Sept. 9 announcement from Amalgamated Bank, a New York-based bank that had applied to ISO for the merchant category code.

The approval took place at a meeting on Sept. 7, ISO confirmed to Payments Dive in an email. A subcommittee of the organization approved the code, an ISO spokeswoman told Reuters.

Merchant category codes comprise four digits and are used to classify retailers across various industries.

The approval from ISO enables banks that process payments from gun retailers to decide whether they should assign the new category code to gun merchants. The code could help monitors track where a person spends money via card, but wouldn’t show what specific items were purchased.

Currently, credit card companies classify retailers with other merchants as either “5999: Miscellaneous retail stores” or “5941: Sporting Goods Stores,” according to CBS News. While a new merchant category for firearm stores has been approved, it doesn’t have a code value assigned just yet, as of late Sept. 9.

Amalgamated Bank, which calls itself “America’s socially responsible bank,” said that its decision to push for creating the new code is “the result of nearly three years of research and partnership with issue experts at Guns Down America and Giffords Law Center and broad support from elected officials, pension funds, and others across the United States.”

Amalgamated Bank was founded by union workers nearly 100 years ago. The bank first tried to apply to create the gun merchant code in July 2021, but the application had been denied twice by the ISO, after which it applied again for the new merchant category code in June this year, reported CBS News.

Bank Urges Card Companies to Adopt New Category Code

Following the ISO approval, Amalgamated Bank is calling for credit card companies that typically follow the ISO standards to implement the new merchant category, but it is unclear whether the companies will adopt it.

Priscilla Sims Brown, the president and CEO of the bank, said on Sept. 9: “We all have to do our part to stop gun violence. 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,” she said in a statement. “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 bank in its release announcing the approval of the new merchant code also shared separate statements from multiple New York officials and lawmakers who support the move, including New York Gov. Kathy Hochul, New York Attorney General Letitia James, New York City Mayor Eric Adams, New York City Comptroller Brad Lander, New York State Sen. Zellnor Myrie, and New York State Rep. Chantel Jackson.

A coalition of national gun violence prevention groups including Guns Down America, Giffords, Brady, and New Yorkers Against Gun Violence issued a joint statement applauding the approval of the new code, saying that the decision “paves the way for credit card companies to help law enforcement preempt mass shootings and firearm trafficking by identifying suspicious patterns of firearms and ammunition purchases” via the code for the 9,000 federally licensed firearms dealers across America. “Some of the nation’s worst mass shootings, including Aurora, Colorado; San Bernardino, California; Orlando; and Las Vegas involved electronic payments,” they noted.

Criticisms

Some groups have criticized the ISO approval. Mark Oliva, the managing director for public affairs for the National Shooting Sports Foundation, a U.S. trade association for the firearms industry, told The Center Square that the code’s creation was “flawed on its premise.”

“Those who believe it will help law enforcement do not provide details on what should be considered suspicious purchases,” Oliva told the outlet.

He separately told Gothamist: “This decision chills the free exercise of constitutionally protected rights and does nothing to assist law enforcement with crime prevention or holding criminals accountable. Attaching codes specific to firearm and ammunition purchases casts a dark pall by gun control advocates who are only interested in disarming lawful gun owners.”

Lars Dalseide, a spokesperson for the National Rifle Association Institute for Legislative Action (NRA-ILA), the lobbying arm of the gun rights advocacy group NRA, told The Center Square: “Implying that firearm purchases are suspicious demonstrates an obvious bias these attorneys general hold against anyone who chooses to exercise a fundamental constitutional right.

“Creating specific credit card codes for firearms lays the groundwork for a de facto firearm registration. Suggesting otherwise is either shortsighted or deceptive,” Dalseide added. “The true travesty is that New Yorkers and Californians must continue facing the violent criminals pushed back on the streets thanks to these two attorneys general reckless soft-on-crime policies.”

Credit Card Companies Respond to Approval

Congressional Democrats Sen. Elizabeth Warren (D-Mass.) and Rep. Madeleine Dean (D-Pa.) previously announced on Sept. 2 that they reached out to the CEOs of MasterCard, American Express, and Visa, seeking support for the creation of the new merchant category code and to “request information about their reported opposition to Amalgamated Bank’s application for such a code.”

The politicians cited a report from CBS News in June that said that it had obtained documents that show “employees from domestic and international credit card companies, including Visa, Mastercard, and American Express, pushed back on an application to create a merchant category code for firearm and ammunition sellers.”

Following ISO’s approval of the new merchant category code, a spokesperson for Mastercard told outlets: “we now turn our focus to how it will be implemented by merchants and their banks as we continue to support lawful purchases on our network while protecting the privacy and decisions of individual cardholders.”

“This is exactly how we would manage the process for any other appropriate [merchant category code], like a bicycle shop or sporting goods store,” the Mastercard spokesperson said.

An American Express spokesperson said that when ISO develops a new code, the company works with third-party processors and partners on the implementation. “It is important to note that [merchant category] codes are one of many data points that help us understand the industries in which our merchants operate,” the spokesperson told outlets. “We are focused on ensuring that we have the right controls in place to meet our regulatory and fiduciary responsibilities, as well as prevent illegal activity on our network.”

Visa has yet to issue any public statements on the matter as of late Sept. 9.

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