Visa and Mastercard paused their decision to start, a significant win for conservative groups and Second Amendment advocates who felt tracking gun shop purchases would inadvertently discriminate against legal firearms purchases.
The move is a setback for gun control groups. They say categorizing credit and debit card purchases might help authorities see potential red flags — like significant ammunition purchases — before a mass shooting could be carried out.
After Visa and Mastercard announced their plans to implement a separate merchant category code for gun shop purchases, the payment networks got significant pushback from the gun lobby as well as conservative politicians. A group of 24 GOP state attorneys general wrote a letter to the payment networks threatening legal action against them if they moved forward with their plan.
There are also bills pending in several state legislatures that would ban the tracking of purchases at gun shops. That would have made it even more difficult for Visa and Mastercard to implement the categorization.
In a statement, Visa indicated that the legal pushback was partially the reason it paused the implementation.
"There is now significant confusion and legal uncertainty in the payments ecosystem, and the state actions disrupt the intent of global standards," the company said.
Visa and Mastercard have said the gun shop categorization was a decision out of their control. The International Organization for Standardization, better known as ISO, is the group that categorizes merchant codes and Visa and Mastercard were just following their decision, the companies said. Gun control advocates lobbied for the change to ISO, not to Visa and Mastercard.
Visa and Mastercard's plan wouldn't have tracked individual gun buys. It would have broken out purchases at gun stores as a separate category.
But not all large purchases at a gun shop would have been considered a red flag. For example a purchase of a gun safe, which costs several thousands of dollars, would have been seen as a large purchase at a gun shop even though the safe is considered a responsible tool of gun ownership and unrelated to potential mass shootings.
Montana Attorney General Austin Knudsen, who led the 24 state GOP group that pressured Visa and Mastercard, said in a statement that, "Visa and Mastercard came to the correct conclusion. However, they shouldn't just 'pause' their implementation of this plan—they should end it definitively."
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