Editor’s note: Morning Money is a free version of POLITICO Pro Financial Services morning newsletter, which is delivered to our s each morning at 5:15 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day’s biggest stories. Act on the news with POLITICO Pro. If you buy a gun with plastic, your credit card company is going to know about it. As obvious as that sounds, it wasn’t until this weekend that the big three credit card companies — Visa, Mastercard and American Express — agreed to adopt a new merchant code that specifically carves out gun sales from the “general merchandise” category. Other types of purchases, everything from plumbing equipment to florist supplies, already have their own codes. But this one’s been years in the making. Gun control advocates, blue state public pension fund leaders and Democratic policymakers say the subtle, arcane adjustment in how transactions are coded could stop illegal gun trafficking and help law enforcement identify dangerous purchases by would-be mass shooters before they ever pull the trigger. “The creation of [a] new merchant category code for firearms is a major step forward that will help give law enforcement the tools they need to stop a tragedy before it happens,” New York Gov. Kathy Hochul said in a statement released by Amalgamated Bank on Friday. “I'm grateful to the business leaders who stepped up and joined the fight to protect public safety — here in New York and across the nation.” As pro-gun control Democrats herald the new merchant code as a key tool for curtailing gun violence, its arrival has inflamed pro-gun groups and privacy advocates who say consumers are already subject to excessive commercial surveillance. With Republican-led state agencies now flexing their muscles to oppose corporate ESG programs and clean energy initiatives, banks and other payments businesses could be caught in the middle. “Categorizing firearm retailers under a separate merchant code is a dangerous step toward using the payment system to monitor and track politically disfavored industries,” Sen. Mike Crapo (R-Idaho) said in a statement to POLITICO on Sunday. “This raises serious privacy concerns and payment processing networks should not play an end-run game around Congress to police and target lawful businesses.” He’s not the only Republican lawmaker fuming over the new merchant codes. “To maybe catch someone, they want to track everyone everywhere,” Rep. Warren Davidson (R-Ohio) tweeted on Saturday , later confirming to POLITICO that he was concerned with how the new code could further enable what his tweets dubbed “surveillance capitalism.” Banks and payments businesses have faced growing pressure to combat gun violence after it became clear that the assailants behind certain mass shootings, including the Virginia Tech and Pulse Nightclub attacks, had used credit cards to amass their arsenals. The latest push behind a new code picked up steam over the summer after it emerged that Amalgamated Bank — which markets itself as a “socially responsible” enterprise — was petitioning an international payments standards-setting body on the matter. Meanwhile, pension leaders in New York and California unveiled an effort to leverage their stock holdings in the three credit card companies to prod them to action. Days later, Sen. Elizabeth Warren (D-Mass.) and Rep. Madeleine Dean (D-Pa.) sent letters to the CEOs of MasterCard, American Express and Visa demanding answers on why they were resistant to collecting more data on guns and ammo purchases. Once the Geneva, Switzerland-based International Organization for Standardization handed down its decision on Friday, all three credit card companies capitulated, per the Associated Press’s Ken Sweet. In a statement, American Express said that it was working with its partners on implementing the new codes, which are “one of many data points that help us understand the industries in which our merchants operate.” Separately, Mastercard said that it would now focus on how the new codes “will be implemented by merchants and their banks as we continue to support lawful purchases on our network while protecting the privacy and decisions of individual cardholders.” Visa also confirmed it was proceeding with “next steps” while “ensuring we protect all legal commerce on the Visa network in accordance with our long-standing rules.” IT’S MONDAY — Buckle up, it’s going to be a long week. Please send tips, story ideas and feedback to ssutton@politico.com.
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