Representatives from the credit card industry have paved the way for a new method of tracking firearm and ammo purchases, a move that proponents claim will assist in identifying suspect sales and lowering gun crime.

At a conference this week, the International Standards Organization, which establishes regulations for the financial services sector, decided to establish a new merchant category code for merchants of firearms and ammunition. The decision was made public on Friday.

Democrats in Congress who pushed for the code’s establishment increased their pressure on credit card firms while the decision was being made.

Four-digit merchant category codes, which are intended to categorise retailers without disclosing specific product transactions, are utilised in a wide range of businesses. Retailers of firearms are currently categorised by credit card providers as either 5941: Sporting Goods Stores or 5999: Miscellaneous retail stores, which lumps them in with other stores.

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Potentially suspicious purchasing patterns could be flagged to law enforcement with the help of a new code for retailers of firearms, similar to how banks and credit unions made more than 1.4 million suspicious activity reports for other types of transactions in 2021 that could indicate anything from identity theft to financing for terrorism.

Supporters note some well-known mass killings that were paid for with credit cards as evidence that the code might be an effective tool to aid law enforcement in identifying criminals.

In the two months before his attack, which resulted in the deaths of 12 people and the injury of 70 more, the shooter who terrorised a Colorado movie theatre in 2012 racked up more than $9,000 in charges for firearms, ammo, and tactical equipment.

The Orlando nightclub shooter who killed 49 people by opening fire used more than $26,000 in credit cards to purchase weapons and ammunition. And the gunman who killed 59 people at a music festival in Las Vegas in 2017 made about $95,000 in charges on a number of firearms.

According to a June investigation by CBS News, Mastercard, American Express, and Visa initially opposed the development of a merchant category code for merchants of guns and ammunition.

After a group, which includes representatives from the major credit card firms, was unable to come to a consensus on it, the application for the code was authorised by leadership in charge of financial services within the International Standards Organization.

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Visa had expressed disapproval of the idea. Visa argued in a letter to congressional Democrats who backed the proposal, “We believe that asking payment networks to serve as a moral authority by deciding which legal goods can or cannot be purchased sets a dangerous precedent.” The letter was reportedly obtained and cited by CBS News.

“We understood Amalgamated Bank’s request to be justified, at least in part, by an interest in blocking transactions that would fall under such a new category, and Visa’s rules expressly prohibit blocking of legal transactions under an MCC,” Visa wrote.

With the code approved, Mastercard said in a statement, “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 MCC, like a bicycle shop or sporting goods store.”

“It is 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,” American Express said.

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In July 2021, Amalgamated Bank, a New York-based company, started working on developing a code to track the purchases of firearms and ammunition. After several fatal mass shootings in which young males utilised powerful weapons bought with credit cards, they stepped up their campaign.

Amalgamated proclaims to be the country’s oldest socially responsible bank and was established by union workers nearly a century ago.

“We all have to do our part to stop gun violence,” Priscilla Sims Brown, President, and CEO of Amalgamated Bank 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.”

International Standards Organization twice rejected Amalgamated Bank’s request to create a code. According to documents examined by CBS News, members of the credit card industry were on an internal committee at the company that had previously advocated for denying the application.

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An American Express employee commented, “Specific MCC [codes] in narrow retails [sic] areas are challenging. Managing long lists of narrowly defined MCCs can become burdensome if there isn’t a compelling reason for the long list.”

The International Standards Organization rejected Amalgamated’s appeal in February. A new code for gun and ammo merchants, according to an email sent to the bank, would fail to account for “the sales in sporting goods stores” while also burdening small retailers.

The group in June stated that the credit card firms were not accountable for the choice and that its employees just provided advice to the committee, were acting in their own capacity, and “do not represent the views of their employer.” According to the group, those who advocated to reject Amalgamated’s application did so “based on their expertise.”

The bank reapplied for the merchant category code in late June.

The application has been granted, but the new merchant category has not yet received an international code value. Nevertheless, the bank is urging the credit card firms who usually adhere to the rules to execute the change as soon as possible.

On September 1, a group of legislators led by Sen. Elizabeth Warren and Rep. Madeleine Dean wrote letters to American Express, Visa, and Mastercard asking for each company’s current position on the creation of the code.

As representatives of the industry on the committee of the standards body that considers requests for new merchant category codes, they further enquired about the role that each credit card corporation played in “supporting, opposing, or delaying” the procedure.

“This approval is an important step towards improving coordination with law enforcement and preventing gun violence,” Senator Elizabeth Warren said in a statement. “In order for this new merchant code to be maximally effective, every financial institution and payment system needs to step up and put it to use.”