Top payment networks Visa Inc (V.N) and Mastercard Inc (MA.N) announced on Thursday that they have paused work on implementing a new sales code for gun merchants, citing Republican opposition in various U.S. states over concerns about improper consumer tracking.
In September, the Geneva-based International Organization for Standardization (ISO) approved a new merchant category code (MCC) to aid in the detection of suspicious firearms and ammunition sales to combat gun violence. Several Republican-led states have introduced legislation that would prohibit or limit the use of the voluntary code.
According to an email from a Mastercard representative on Thursday, such bills would result in “inconsistency” in how merchants, banks, and payment networks applied the code.
“As a result, we have decided to pause work on the implementation of the firearms-specific MCC,” said Seth Eisen, a Mastercard representative.
Visa also cited state legislation as a factor in its decision.
“There is now a great deal of confusion and legal uncertainty in the payments ecosystem, and state actions are undermining the intent of global standards. As a result, Visa is putting the MCC on hold “Visa said in a statement released through a spokesperson.
Discover Financial said in an emailed statement that the new MCC would be removed from its next network update, which is scheduled for April, to “continue alignment and interoperability with the industry.”
A representative for American Express, the third-largest payment network, did not immediately comment.
The moves mark a setback for gun-control activists, though the payment networks stopped short of saying they would reject the code outright.
All the top payment networks had said they would adopt the new code but only the smallest, Discover, had given a public timetable for doing so, in April, and said it was only following the lead of others.
Newsmen earlier reported the implementation pauses by Visa and Mastercard, citing people familiar with the matter. Mastercard’s Eisen noted the code would not allow banks to track specific items purchased by consumers.
“We are committed to working with policymakers and elected officials to contribute to constructive solutions that address the gun violence issue while respecting important constitutional rights and protections for lawful activities,” he said.
Montana Attorney General Austin Knudsen, among the Republican critics of the new code, said in a statement on Thursday 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. Discover and American Express should do the same,” he added.
