Payment processors Visa Inc. and Mastercard have paused implementing a plan that would separately categorize sales at gun shops due to legal uncertainties, reports Bloomberg.
"There are bills advancing in several states related to the use of this new code," a spokesman for Mastercard said in a statement Thursday. The proposals would create an "inconsistency" in how the code is applied by merchants and others, he added.
"It's for that reason that we have decided to pause work on the implementation of the firearms specific MCC."
Visa said the "significant confusion and legal uncertainty" the legislative proposals have created led to the pause, according to a spokesperson.
The International Organization for Standardization, or ISO, in September of 2022 voted to create a special code for gun stores to use when processing credit and debit card transactions, a move hailed by gun control advocates who said it would help law enforcement officials spot suspicious purchases.
Visa and Mastercard at the time said it would adopt the code, provoking the ire of gun rights advocates and gun lobbyists.
But the payment giants are delaying the work after lawmakers in Mississippi and Florida filed bills targeting the merchant code (MCC). A bill in West Virginia that would "prevent the use of payment card processing systems for surveillance of Second Amendment activity and discriminatory conduct" passed the House and was sent to the state's Senate.
"MCCs are one data point that would not provide any insight on specific purchases or resolve larger issues," the Mastercard spokesman said. "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."
Discover also said it's removing the MCC, "to continue alignment and interoperability with the industry."