Sep 12, 2022 - Economy

Credit card companies to track gun store purchases

Illustration of a credit card surrounded by a one hundred dollar bill and other shapes

Illustration: Annelise Capossela/Axios

Credit card giants Visa, Mastercard and American Express are taking steps to help better track firearm sales in a move hailed by gun control proponents.

Why it matters: Payment processors have been under pressure to help monitor gun purchases amid concerns over mass shootings and other violence.

What's happening: A panel of the International Organization for Standardization voted to approve the creation of a "merchant category code" (MCC) for gun retailers — and the credit card companies are adopting the change.

  • That means gun stores will no longer be categorized as, for example, specialty retailers, potentially making it easier to track firearm spending.

Supporters hailed the development as a critical step toward undermining the flow of guns into the hands of violent people.

  • "Until [this decision], gun and ammunition stores did not have a unique merchant category code," Mahen Gunaratna, chief public affairs officer of Everytown for Gun Safety, said on Twitter. "Now banks and credit card companies can more easily report dangerous and potentially illegal gun purchases to law enforcement. "

Yes, but: The manner in which the code is used may determine whether it's effective in bolstering monitoring efforts, goes too far or doesn't go far enough.

  • For example, it's currently unclear whether retailers that also sell other products will be forced to use the merchant codes when processing firearm purchases.
  • "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 said in a statement.
  • "This is exactly how we would manage the process for any other appropriate MCC, like a bicycle shop or sporting goods store."

The other side: Opponents warned that the move sets a dangerous precedent, potentially opening the door for additional tracking of other types of transactions.

  • "Some executives in private discussions have flagged concerns that it could lead to the creation of more codes that could be used to crack down on controversial businesses such as abortion providers," the Wall Street Journal reported.
  • The code's creation "is flawed on its premise," Mark Oliva, spokesperson for the National Shooting Sports Foundation, said in an email to Axios. He said it "chills the free exercise of Constitutionally protected rights and does nothing to assist law enforcement with crime prevention or holding criminals accountable."

The big question: How will the credit card companies — which are steeped in fraud detection — determine whether a purchase from a gun store is suspicious?

  • "The code will show where an individual spends money but not what items were purchased," Reuters reported.
  • "The Aurora movie theater shooter used a Mastercard to purchase $11,000 worth of weapons and military gear in the six weeks leading up to the shooting, including from standalone gun stores, and the Pulse shooter, who killed 49 people, also used a Mastercard to purchase more than $26,000 in firearms and ammunition," New York City Comptroller Brad Lander said Monday at a press conference.

The bottom line: Financial companies are getting more proactive in an effort to show they're not ignoring fears about guns.

  • “We all have to do our part to stop gun violence,” said Priscilla Sims Brown, CEO of Amalgamated Bank, which petitioned for the change, in a statement.
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