Visa, the largest U.S. card network company, said over the weekend that it would join other major U.S. card networks in adopting a new standard for identifying merchants when its cards are used for processing transactions at independent gun shops.

“Following ISO’s decision to establish a new merchant category code, Visa will proceed with next steps, while ensuring we protect all legal commerce on the Visa network in accordance with our long-standing rules,” the San Francisco-based company said in an emailed statement.

The International Organization for Standardization last week approved creating a unique merchant category code (MCC) for gun and ammunition sellers. That Geneva-based organization made the change after receiving a proposal to do so from Amalgamated Bank and after political and public pressure mounted for the move.

The code became a contentious issue for Visa, Mastercard and other card companies in the wake of active-shooter incidents in recent years that showed guns and ammunition had been purchased with their cards as part of a payments system that didn’t track such merchants.

In recent months, following the shootings in Uvalde, Texas, and Highland Park, Illinois, there was an outcry from state officials, pension leaders and gun-control advocates for ISO and the card companies to approve a new code. 

After one ISO group considering the bank’s application was unable to reach a decision Wednesday, the application was put before another ISO committee that met the same day, an ISO spokesperson said in the email. With the application satisfying necessary criteria “and no material arguments” to reject the code, that group approved the application “to comply with the standard,” the ISO statement said. 

That decision came days after members of Congress and attorneys general in California and New York, as well as major pension systems in their states, urged Visa, Mastercard and American Express to back the creation of the new code for gun sellers, which they had previously opposed.

Professionals from those U.S. card companies serve on ISO committees. Advocates have said the code could help track troublesome gun purchases. 

“With ISO approving the proposed MCC, 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,” Mastercard spokesman Seth Eisen said in an email last week. “This is exactly how we would manage the process for any other appropriate MCC, like a bicycle shop or sporting goods store.” 

Following the ISO approval, Amalgamated Bank called the code “the key” for creating new tools financial institutions must use to report activity that may be related to gun trafficking and mass shootings to the Financial Crimes Enforcement Network, the bank said in a press release last week.

“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,” Amalgamated CEO Priscilla Sims Brown said in the release.

American Express said in a statement that it adopts new MCCs when they’re created, and added that it’s “important to note that MCC codes are one of many data points that help us understand the industries in which our merchants operate.”

“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,” the emailed Amex statement also said.

Elected officials such as New York Gov. Kathy Hochul and New York City Mayor Eric Adams applauded ISO’s decision, as did gun-safety advocates.

Gun control advocates said the code is only the first step. Kris Brown, president of anti-gun violence organization Brady, said in a news release that the group now calls on financial institutions “to work with us to institute these new changes.”

“We look forward to working with Visa, Mastercard, and American Express to ensure swift efforts to ensure uniform and comprehensive use of this new code,” said Adam Skaggs, chief counsel and policy director of the Giffords Law Center to Prevent Gun Violence, per the release.

By Caitlin Mullen and Lynne Marek on Sep 12, 2022
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