One month ago, credit-card provider Discover Financial Services, issuer of the eponymous credit card, stunned markets when it unveiled in its latest forecast that it expects its 2023 charge off rate to more than double from the 2022 average, hitting a multi-year high and hinting that the US consumer was about to hit a brick wall
Last week, Discover decided to cement that not only would its charge off rate soar but it was about to lose millions of customers after it told Reuters that it would effectively oversee (i.e., spy on) its clients by allowing its network to track purchases at gun retailers come April, making it the first among its peers to publicly give a date for moving ahead with the initiative, which is aimed at helping authorities probe gun-related crimes.
Discover’s announcement came after the International Organization for Standardization (ISO), which decides on the classification of merchant categories used by payment cards, approved in September the launch of a dedicated code for gun retailers.
Proponents of the move, almost exclusively Democratic politicians and gun control activists, say it will allow financial institutions to better assist authorities in investigating crimes involving gun violence in the United States. While the codes will not show specific items purchased, some Republican politicians have spoken out against the move, arguing it could violate the privacy of U.S. citizens lawfully buying guns.
Discover said it will include the new code in its next policy and product update to merchants and payment partners in April.
“We remain focused on continuing to protect and support lawful purchases on our network while protecting the privacy of cardholders,” Discover said in its statement to Reuters.
Curiously, a Discover spokesperson said following the publication of the story that other payment network companies had already decided to implement the new code in April, and that Discover was following their lead. While the Discover spokesperson declined to name those peers, it means that any legal purchase of guns now triggers a whole array of red lights and ringing bells across the government which has taken its crusade against legal gun ownership and purchases to unprecedented levels in recent years, even as gun-related crime in such democrat-controlled cities as Chicago and Baltimore hits record highs every year.
Representatives for Discover’s major peers — Visa, Mastercard Inc and American Express — declined to comment to Reuters on what their schedules for introducing the new code are. Last fall, the companies said they would work to implement the code while respecting privacy rights. And if the Discovery comment is accurate, it would appear that the code has already been implemented without any public announcement to that effect.
A representative for Geneva-based ISO said the new code, dubbed “5723 – Gun and ammunition shops” – will be available for financial institutions to use by the end of February.
“The decision to use the new merchant category code is eventually left up to the users in the industry,” the ISO representative said; naturally all woke industry users will be quick to implement such a code in hopes of piling up virtue signaling brownie points.
Discover handled 2% of the $9.56 trillion purchased on U.S. credit and debit cards in 2022, according to industry researcher Nilson Report. Industry leader Visa had a 61% share, Mastercard 26% and American Express 11%.
Tyler Durden
Sun, 02/19/2023 – 18:00
