NEW: Credit Card Companies Will Implement Merchant Category Codes for Gun Purchases Where Lawful

February 12, 2024

New research from Guns Down America shows credit card abuse fuels gun crime as American Express, Visa, Mastercard move ahead with California Gun Store MCC

This news first broke in CBS News on February 12, 2024.

Washington, D.C. — Today, major credit card companies for the first time are on record agreeing to take a lawful approach in implementing a merchant category code (MCC) for gun and ammunition purchases in states where it is legally required, according to correspondence shared with congressional Democrats. The importance of this step is underscored by a new report released by Guns Down America showing how credit card abuse fuels gun crimes across the country.

“It’s a start that credit card companies have committed to comply with the MCC law in California, but we need implementation across the country if we’re going to do everything we can to prevent gun violence,” said Senator Elizabeth Warren (D-MA). “The sooner credit card companies and banks begin using the new MCC for gun retailers and tracking suspicious gun purchases, the more mass shootings we will have a shot at preventing before they occur.”

“Today’s news that credit card companies will make the gun merchant category code available where legally required is a promising development indicating renewed momentum in this fight. But this lawfulness standard must go a step further and be made available in every state that does not have a ban—not just where it's affirmatively required.” said Guns Down America Executive Director Hudson Munoz. “Our new report found that the gun store code would be the most effective method to identify high-risk gun purchasing patterns. Together, firearm retailers, banks, and credit card companies can better detect suspicious activity and fraud that could prevent future acts of gun violence—and they have a moral obligation to do so.”

“It defies common sense that industry-specific merchant category codes (MCCs) are applied to nearly every type of business—restaurants, toll roads, and even snowmobile dealers—but not gun and ammunition sellers,” said Kris Brown, President of Brady. “Implementing the gun and ammunition seller MCC is a new approach that will help identify suspicious sales patterns indicative of trafficking firearms or accumulating an arsenal to use in a mass shooting. This is not new, MCCs are already used to identify human trafficking, and Brady applauds Guns Down America’s research that has helped bolster the lifesaving potential of MCCs. Brady is working alongside state legislators to introduce and pass legislation to implement the MCC for gun dealers, and we are grateful to see a growing swell of support for these measures at the federal level.”

Key findings and recommendations include:

• Federal legislation is needed to resolve the conflict between state laws that penalize use of the gun and ammunition store MCC and federal banking regulatory and examination expectations for its use.
• Payment networks must make the code available for use and operationalized in states where it is not banned.
• The gun store merchant category code could help prevent fraudulent credit card purchases associated with straw purchases and gun tracking.
• The Financial Crimes Enforcement Network should convene banks, payment networks, and stakeholders to develop industry-wide, rules-based transaction monitoring systems that could save lives.
• Payment networks must ensure that online ghost gun retailers are classified under the merchant category code for gun and ammunition stores.

You can read a full copy of the report here.

With the support of its partners, Brady and Giffords, Guns Down America led the effort to create a new merchant category code to identify suspicious patterns of firearms and ammunition purchases that could prevent mass shootings. In 2022, the ISO approved the creation of the code, but state legislatures have been split on implementation of this life-saving measure.