Credit card companies are making it easier to track gun sales
NEW YORK — Payment processor Visa Inc. said Saturday that it plans to start separately categorizing sales at gun shops, a major win for gun control advocates who say it will help better track suspicious surges of gun sales that could be a prelude to a mass shooting.
But the decision by Visa, the world's largest payment processor, will likely provoke the ire of gun rights advocates and gun lobbyists, who have argued that categorizing gun sales would unfairly flag an industry when most sales do not lead to mass shootings. It joins Mastercard and American Express, which also said they plan to move forward with categorizing gun shop sales.
Visa said it would adopt the International Organization for Standardization's new merchant code for gun sales, which was announced on Friday. Until Friday, gun store sales were considered "general merchandise."
"Following ISO's decision to establish a new merchant category code, Visa will proceed with next steps, while ensuring we protect all legal commerce on the Visa network in accordance with our long-standing rules," the payment processor said in a statement.
Visa's adoption is significant as the largest payment network, and with Mastercard and AmeEx, will likely put pressure on the banks as the card issuers to adopt the standard as well. Visa acts as a middleman between merchants and banks, and it will be up to banks to decide whether they will allow sales at gun stores to happen on their issued cards.
Gun control advocates had gained significant wins on this front in recent weeks. New York City officials and pension funds had pressured the ISO and banks to adopt this code.
Two of the country's largest public pension funds, in California and New York, have been pressing the country's largest credit card firms to establish sales codes specifically for firearm-related sales that could flag suspicious purchases or more easily trace how guns and ammunition are sold.
Most purchases have some kind of categorization
Merchant category codes now exist for almost every kind of purchase, including those made at supermarkets, clothing stores, coffee shops and many other retailers.
"When you buy an airline ticket or pay for your groceries, your credit card company has a special code for those retailers. It's just common sense that we have the same policies in place for gun and ammunition stores," said New York City Mayor Eric Adams, a former police captain who blames the proliferation of guns for his city's deadly violence.
The city's comptroller, Brad Lander, said it made moral and financial sense as a tool to push back against gun violence.
"Unfortunately, the credit card companies have failed to support this simple, practical, potentially lifesaving tool. The time has come for them to do so," Lander said recently, before Visa and others had adopted the move.
Lander is a trustee of the New York City Employees' Retirement System, Teachers' Retirement System and Board of Education Retirement System — which together own 667,200 shares in American Express valued at approximately $92.49 million; 1.1 million shares in MasterCard valued at approximately $347.59 million; and 1.85 million shares in Visa valued at approximately $363.86 million.
The pension funds and gun control advocates argue that creating a merchant category code for standalone firearm and ammunition stores could aid in the battle against gun violence. A week before the mass shooting at the Pulse Nightclub in Orlando, Florida, where 49 people died after a shooter opened fire in 2016, the assailant used credit cards to buy more than $26,000 worth of guns and ammunition, including purchases at a stand-alone gun retailer.
Critics of the move say it doesn't track what was bought
Gun rights advocates argue that tracking sales at gun stores would unfairly target legal gun purchases, since merchant codes just track the type of merchant where the credit or debit card is used, not the actual items purchased. A sale of a gun safe, worth thousands of dollars and an item considered part of responsible gun ownership, could be seen as a just a large purchase at a gun shop.
"The (industry's) decision to create a firearm specific code is nothing more than a capitulation to anti-gun politicians and activists bent on eroding the rights of law-abiding Americans one transaction at a time," said Lars Dalseide, a spokesman for the National Rifle Association.
Over the years, public pension funds have used their extensive investment portfolios to influence public policy and the market place.
The California teacher's fund, the second largest pension fund in the country, has long taken aim on the gun industry. It has divested its holdings from gun manufacturers and has sought to persuade some retailers from selling guns.
Four years ago, the teacher's fund made guns a key initiative. It called for background checks and called on retailers "monitor irregularities at the point of sale, to record all firearm sales, to audit firearms inventory on a regular basis, and to proactively assist law enforcement."
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