Mastercard Agrees With FTC Card Data Routing Order

Federal regulators have finalized an order requiring Mastercard to share card data with other payment networks.

The Federal Trade Commission (FTC) said the consent order settles charges that Mastercard had unlawfully forced merchants to route debit card payments through its network, in violation of the 2010 Dodd Frank Act’s Durbin Amendment.

“Under the FTC’s order, Mastercard will have to start providing competing networks with customer account information that these networks need to process debit payments,” the FTC said in a Tuesday (May 30) news release.

The Durbin Amendment, the FTC added, requires banks to give merchants more choices by allowing for at least two unaffiliated networks on each debit card. In addition, the amendment prohibits payment card networks from preventing merchants from using other networks.

“The FTC alleged that Mastercard violated the law by setting policies that effectively blocked merchants from routing ecommerce transactions using Mastercard-branded debit cards saved in ewallets to alternative payment card networks,” the release said.

“We are glad to bring this matter to a close,” a Mastercard spokesperson told PYMNTS.

“As we noted last year, we believe that our existing debit routing practices are lawful and have always provided choice to online merchants. We are continuing to update our processes to comply with the consent order and provide even greater choice.”

The consent agreement was first announced in December, following reports from earlier in the year that the FTC was looking into whether Mastercard’s and Visa’s security tokens prevent debit-card routing competition for some digital payments.

The FTC order focused on tokenized transactions. As PYMNTS has written, tokenization is the process of substituting a sensitive data element with a non-sensitive equivalent, or a token, which has no extrinsic or exploitable meaning or value. The token is a reference that maps back to the sensitive data via a tokenization system.

In the company’s statement to PYMNTS Tuesday, Mastercard stressed that while it would comply with the FTC order, “there should be no question that tokenized transactions provide an increased level of protection to both consumers and merchants.”

“This focus on security guides our efforts in a highly competitive market and provides the incentive for us to continue investing in innovations that promote the peace of mind every person expects,” the statement concluded.