Response to Merchant Classification Rules for Gun Retailers

What happened?

The International Organization for Standards (ISO) has approved a new merchant code that categorizes gun retailers for credit card purchases. This means that your credit card company will know you made a purchase at a gun store. Previously, gun store purchases were categorized as “general merchandise” or simply “sporting goods”. This merchant code is how they know you made a purchase at a coffee shop or an office supply store because there are already specific merchant codes for those establishments today.

Keep in mind they still can’t track individual products within a transaction however, so if you go to a Cabela’s, for example, and buy $1500 worth of clothing it would still show up as a $1500 purchase at a “gun store” under this new code - assuming Cabela’s was recategorized under this new merchant code.

As of right now the new merchant classification has not been implemented and it is unclear whether AmmoSquared.com will be recategorized under this new rule. Primarily because we don’t sell firearms, we only sell ammunition. I haven’t seen the text from the ISO, nor heard anything from our payment processor.

That said, I’m cynical when it comes to financial institutions, so I’ll just assume that it is likely that because of the product we sell (ammunition) and our name (AmmoSquared) our payment processor will lump us in with gun stores.

What this means for you:

Right now, nothing. However, we all know the goal of anti-gun organizations and woke banks like Amalgamated Bank, that support this change, is to use this new classification to flag suspicious purchases made at gun stores - primarily guns, but also large ammunition purchases.

To their credit, Visa has come out and said they won’t deny legal transactions: “Following ISO’s decision to establish a new merchant category code, Visa will proceed with next steps, while ensuring we protect all legal commerce on the Visa network in accordance with our long-standing rules…"

There are still a lot of unanswered questions, the biggest is: What is a suspicious transaction? And secondly: if they categorize a transaction as suspicious, what next? Does the FBI show up at your door to make sure you aren’t planning a mass murder? Honestly they don’t have a very good record even when they have prior knowledge of a deranged person with large gun purchases… but I digress.

In practical terms there are millions of purchases made at thousands of brick and mortar and online gun retailers every day. Whoever is getting this firehose of data will drown in the volume. If anything, it will likely only be very large transactions made in person at local gun stores that get flagged. (The way I use my AMEX card for AmmoSquared, I’m sure I’ll get on that list pretty quickly. Hmmm is $100k in ammunition purchases suspicious? I guess I’ll find out sooner or later!)

This small win for the anti-gun crowd won’t change anything for us and we’re still able to accept credit cards and now, also other forms of payment (see below). In fact, I was just thinking that if they are tracking large purchases, our business model is even more relevant because we let our customers build up large volumes of ammo over time with small purchases. So recurring smaller purchases will likely get lost in the data fire hose and never be noticed by whomever is tracking this stuff.

That being the case, and erring on the side of caution, we’re prepared with some alternative payment options…

What we’re doing:

Today we rolled out the ability to fund your account with a check or money order and added placeholders for ACH and Crypto - both of which we are very close to rolling out.

Here is a screen shot of the updated Payment Methods section from the Account Settings page:

You can now send in a check or money order to add money to your account then draw that down over time incrementally. Or just use those funds to buy up on the calibers in your ammo wallet without the recurring component.

ACH is also just around the corner. We were already working on this upgrade, but this news prioritizes this enhancement. This will allow you to pay with a direct link to your bank account. Once it rolls out we hope to be able to do both lump sum and recurring payments, which would completely skip the VISA / MC / AMEX cartel.

Lastly, for those of you with Bitcoin, we’ll be adding crypto to our list of payment options very soon as well.

Final Thoughts

As someone who is frequently discriminated against because of the business I run, I have never had any illusions that we’d be able to accept credit cards and traditional forms of payment forever. The anti-gun forces and those touting ESG scores will make sure of that eventually.

Just as those dark forces are moving toward a day when we aren’t able to use ANY traditional financial asset to make purchases for guns and ammunition, we’re working toward the opposite: a day when you can use ammunition to make purchases and not even use fiat currency at all.

This is exactly why over a year ago we started working on our system of using ammunition as currency… electronically… online. We’ve basically built Venmo for Ammo.

With our Send and Request feature (catchier name forthcoming) you can literally skip the credit card, Paypal, Cash App, Square, etc., and pay someone directly with ammunition! It is a great way to stay off the radar because we aren’t a financial institution. We’ve just made physical barter in ammunition a little bit easier.

Of course, you still need a way to get ammunition into your ammo wallet, so by adding a few more payment options, hopefully we make it easier to fund your account and stay off the radar as well.