Merchant code for firearms sales gets a green light

A new code identifying credit card sales of guns and ammunition has been approved by the International Standards Organization, creating a potential path for card networks to help law enforcement agencies identify suspicious sales of guns and ammunition.

The move comes after three years of research and advocacy by New York-based Amalgamated Bank, working with Guns Down America, Giffords Law Center and other groups to find ways to counter gun violence without impeding legal gun sales, Amalgamated Bank said Friday in a statement.

Merchant category codes (MCCs) generally identify the type of merchandise a store sells, but they don’t specify individual products a customer is buying. So the move could have limited effect in pinpointing individual weapon purchases, observers say.

Prior to Friday’s vote, there was no unique merchant category code for merchandise sold at gun and ammunition stores.


But adding an MCC for gun-store sales could enhance law enforcement’s ability to track illicit gun purchases. Until now, there has been no unique MCC for merchandise sold at gun and ammunition stores, with weapons sales at gun stores typically classified as “miscellaneous” or “sporting goods.”

Amalgamated Bank last year began a series of applications to the board of the Switzerland-based ISO to create a new MCC for gun and ammunition sales. The proposal finally gained approval Friday in a vote by the organization that sets global standards for the four-digit MCCs used by credit and debit card networks.

“This code is the key to creating new tools that all financial institutions must now use to begin detecting and reporting suspicious activity associated with gun trafficking and mass shootings to the Financial Crimes Enforcement Network,” Amalgamated Bank said in its statement.

Specifically, Amalgamated said that adding the MCC for gun sales could help combat “straw purchases,” where an individual is reimbursed after purchasing a firearm on someone else’s behalf. The new code could also aid in reporting multiple gun sales, detect successive gun purchases at different retailers and potentially help financial institutions to report sudden, large purchases at firearms retailers, the bank said.

Earlier this month, the attorneys general of California and New York urged Visa, Mastercard and American Express to support adding an MCC for gun sales.

New York Attorney General Letitia James on Friday applauded the ISO’s decision.

“Today’s decision requiring credit cards to categorize gun sales is a big victory that will help us better address gun violence and avoid tragedies,” James said in a statement, thanking Amalgamated Bank for its leadership in the effort.

How and when the card networks may move to add MCC codes with merchants and processors is not clear.

“When ISO develops a new MCC, we follow our usual business practices and will work with our third-party processors and partners on implementation,” American Express said in a statement.

“MCC codes are one of many data points that help the card network 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,” Amex’s statement concluded.

Mastercard declined to provide a comment Friday, and Visa did not respond to queries by deadline.

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