Major credit card companies are facing criticism for their decision to move forward with implementing a merchant code specifically for firearm and ammunition retailers in order to comply with a new California law.

This law enables banks to potentially track “suspicious gun purchases” and report them to law enforcement, raising concerns among Second Amendment advocates who believe it infringes on the rights of legal gun owners.

Merchant codes are assigned to retailers based on the types of goods they sell, allowing banks and credit card companies to detect purchase patterns.

Currently, gun shops are grouped together with other types of retailers, such as sporting goods stores. Initially, Mastercard, Visa, and American Express agreed to establish a standalone code for firearm sellers. However, they later paused their work on it due to backlash from Second Amendment advocates.

Gun control activists view the code, approved by an international organization in 2022, as a valuable tool to identify suspect purchases and prevent gun crimes, including mass shootings. They argue that a code for firearms merchants would enable banks and credit unions to alert law enforcement about potentially suspicious purchasing patterns, similar to how they flag other transactions related to identity theft or terrorist financing.

Credit card companies clarify that the merchant code would only indicate that a transaction was made at a gun store and would not provide details about the customer or insight into specific items purchased.

At least seven Republican-controlled state legislatures have already banned the code, while nine others are considering similar legislation. In contrast, California, a predominantly blue state, has passed a law mandating its adoption by firearm retailers by May 2025.

Executives from Mastercard, Visa, and American Express recently assured congressional Democrats that the code would be made available to retailers in California by the deadline. However, they also highlighted the regulatory and legislative uncertainty surrounding the issue, citing conflicting state laws and the potential for other states to enact similar legislation.

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While Senator Elizabeth Warren commended credit card companies for complying with the California law, she emphasized the need for nationwide implementation to prevent gun violence.

Gun violence prevention advocates continue to push for the code's adoption, despite state efforts to impede its progress.

Hudson Munoz, the executive director of Guns Down America, criticizes credit card companies for attempting to remain neutral on the issue, asserting that it exposes the payment system to uninhibited criminal abuse. The organization calls on credit card companies to make the gun store code available in all states where it has not been banned.