A measure that would outlaw the use of a new firearm-specific Merchant Category Code (MCC) for gun purchases in South Dakota has been approved by the State Senate.
At issue is a new Merchant Category Code (MCC) for gun purchases adopted by the International Organization for Standardization in 2022. MCCs are used by payment processors (like Visa and Mastercard) and other financial services companies to categorize transactions.
Prior to the creation of the specific code for guns, firearms retailers fell under the MCC for sporting goods stores or miscellaneous retail. If the new code is used, credit card companies and other payment processors can tell the purchases were firearms.
Pro-gun states have struck back hard against the use of the code, with Utah, Kentucky, Iowa, Tennessee, Georgia, Wisconsin and Indiana passing laws last year to outlaw the use of the gun-specific MCC in those states. Less gun-friendly states, like Colorado and California, have actually passed laws requiring the use of the code.
The South Dakota bill, Senate Bill 81, would prohibit the use of a firearms code for transactions involving firearms, accessories, components and ammunition, along with providing a civil penalty for anyone violating the act by using the code.
“Now we aren’t bringing this bill to stop a behavior that’s been going on for decades, or even just years,” said state Sen. Jim Mehlhaff, primary author of the legislation, told sdbp.org. “This is something that reared its head sometime in September of 2022 when the International Organization for Standardization—the ISO—approved a merchant category code specific to firearms and firearm retailers in order to record all firearm and ammunition transactions.
“It protects Second Amendment and the privacy rights of South Dakotans.”
The measure, which passed the Senate on a 33-to-2 vote, will next be considered in the state House of Representatives.
Incidentally, the gun-specific MCCs have also caught the attention of federal lawmakers, many of whom aren’t fond of records created when using the code. Last November, two members of the U.S. House of Representatives introduced legislation to halt the use of the gun-specific MCC nationwide, thereby protecting gun owners’ privacy.
U.S. Rep. Elise Stefanik of New York and Rep. Andy Barr of Kentucky wrote in a November 4, 2024, op-ed posted at Newsweek.com that their legislation, the Protecting Privacy in Purchasing Act, is meant to protect America’s gun owners from unnecessary intrusion by financial institutions.
“The creation of MCCs specifically for firearms retailers is weaponizing the financial system against lawful gun owners by seeking to label and track transactions on firearms and ammunition,” they wrote in the op-ed. “Our bill aims to ensure that firearms retailers are not unjustly targeted by payment card networks or other financial entities, and purchases by law-abiding citizens are protected from monitoring and denial by the government. Specifically, our bill ensures that firearms retailers are not considered differently than general or sporting goods merchants.
“This protection preserves the privacy of Americans making lawful purchases, prevents the creation of a backdoor registry of gun owners, and guarantees that legal commerce is not unfairly surveilled or impeded based on the nature of the goods sold.”
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