FTC Orders Mastercard to Allow Competing Debit Card Payment Networks

The FTC ordered Mastercard to allow merchants that accept Mastercard-branded debit cards saved in e-wallets (i.e. Apple Pay, Google Pay and Samsung Wallet) to route transactions through payment card networks not operated by Mastercard.

After an investigation, the FTC found that Mastercard took advantage of how e-wallet transactions rely on "tokenization," the process that replaces the cardholder's account number with a different number and assigns a token to the account so the bank can locate the user's account. The FTC found that Mastercard did not offer its token conversion services to competing networks, thereby preventing merchants from processing Mastercard transactions on other payment networks.

The FTC Order requires Mastercard to:

• provide other networks with the account number that corresponds to a token transaction, and prohibit policies preventing other networks from processing transactions;

• notify the FTC in advance of any intended changes to a debit product or the launch of a new debit product;

• file regular reports with the FTC as to compliance with the Order; and

• notify the FTC of events that may affect compliance with the Order.