Will New Merchant Code for Gun Sales Turn Issuers into 'Morality Police?'

Source: American Banker

Now that the International Organization for Standardization has approved a new code to identify purchases at stores that sell guns and ammunition, many groups are speaking up about threats to privacy and second-amendment rights.

The National Rifle Association's Institute for Legislative Action this week alerted members that the new ISO merchant category code, established to help deter illicit firearms sales and gun violence, could have the effect of enabling banks and payment card companies to track card users' gun purchases and essentially create a "gun registry."

The NRA expressed concern that anti-gun groups would use the gun store MCC to "create liability for any banks or payment processors who do business with the firearm industry."

Visa this week clarified in a blog post that the Switzerland-based ISO's approval of a new code identifying credit card purchases at gun stores doesn't allow banks to "track" individual gun purchases.

"Asking private companies to decide what legal products or services can or cannot be bought and from what store sets a dangerous precedent," Visa said, adding that it would be an invasion of consumers' privacy for banks and payment networks to know customers' personal purchasing habits.

Visa joined Mastercard and American Express in saying it plans to follow industry protocols in adopting any MCCs.