networks for op payments A new sales code for gun retailers have been put on hold, according to Visa Inc. and Mastercard Inc. (V.N) and Republican opposition in a number of U.S. states on worries about improper surveillance of consumer behavior.
In an effort to prevent gun violence, the Geneva-based International Organization for Standardization (ISO) authorized the new merchant category code (MCC) in September. Proposals would forbid or restrict the use of the voluntary code in numerous states with Republican governors.
A Mastercard spokesperson wrote in an email on Thursday that such bills would result in “inconsistency” in how the code may be applied by merchants, banks, and payment networks.
“It’s for that reason that we have decided to pause work on implementing the firearms-specific MCC,” said the Mastercard representative, Seth Eisen.
Visa also cited state bills as driving its decision.
“There is now significant confusion and legal uncertainty in the payments ecosystem, and the state actions disrupt the intent of global standards. Accordingly, Visa is pausing implementation of the MCC,” Visa said in a statement sent by a spokesperson.
In order to “maintain alignment and interoperability with the industry,” Discover Finance stated in an email that it was eliminating the new MCC from its April network update.
The third-largest payment network, American Express, did not immediately respond to requests for comment.
The actions are a blow for proponents of gun control, while the payment networks refrained from announcing they would outright reject the code.
Just the smallest payment network, Discover, announced a public timeline for adopting the new code in April and said it was only doing so because other networks had done so before. All of the main payment networks had previously stated that they would use the new code.
According to persons familiar with the situation, Bloomberg News first reported the implementation pauses by Visa and Mastercard. Eisen from Mastercard pointed out that the code would prevent banks from monitoring certain consumer purchases.
“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.