Guns, Drugs and Payments

by Sarah Grotta 0

In the wake of the high school shooting in Parkland, Florida, conversations again turned to the issue of controlling how individuals get weapons.  Given what many believe is inaction on the part of national leaders on the matter of gun control, some are suggesting banks and payment facilitators could promote gun control in a non-legislative channel by limiting gun sellers’ ability to take payments.  This from the New York Times:

What if the finance industry — credit card companies like Visa, Mastercard and American Express; credit card processors like First Data; and banks like JPMorgan Chase and Wells Fargo — were to effectively set new rules for the sales of guns in America?

Collectively, they have more leverage over the gun industry than any lawmaker. And it wouldn’t be hard for them to take a stand.

 Advocates of this approach suggest that the banks and their payment processor partners could simply not provide services to those dealers who sell items like assault rifles, presumably through on-going, on site audits of dealers’ stock.  This is not a panacea for this complex issue.  In addition to some of the logistical aspects, the effectiveness also needs to be considered.  Mastercard and Visa currently do not support cannabis sales, but that industry is flourishing without them. There is also a concern that if banking services are withheld, providers would then be a target for discrimination lawsuits:

Critics of using the finance industry to influence gun sales might argue that such a move would be discriminatory against gun retailers. But gun sellers are not a protected class, like age, race, gender, religion or even political affiliation. This would be a strictly commercial decision.

Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group

Read the quoted story here