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Mastercard lays out two-tiered plan in conference call

Mastercard

On a conference call with CUNA and credit unions, Mastercard laid out its plans for a two-tiered system for financial institutions under $10 billion in assets. MasterCard Global Head of Public Policy Shawn Miles said the plan is for Mastercard to establish its own online debit interchange registration system for its member institutions to denote if they are above or below the $10 billion-asset threshold. The card processor is planning to include in the registry the ability for institutions above $10 billion in assets to certify that they qualify to receive an extra penny for complying with fraud prevention standards.

The Fed's final debit interchange rule caps debit interchange fees for issuers with assets of $10 billion or more at 21 cents. The Fed's rule allows an additional five basis points of the value of the transaction to cover fraud losses. An extra penny may be charged by financial institutions that are in compliance with Fed-established fraud prevention standards. Credit unions and other institutions with under $10 billion in assets are exempt from the rule.

CUNA News Now reports that CUNA and MasterCard will monitor merchants for any signs that they are steering consumers away from using debit cards issued by institutions that are not subject to the cap. CUNA is developing a mechanism for credit unions to report illegal merchnat steering behavior.

 

Miles thanked credit unions and CUNA for their efforts to delay and change the debit interchange fee cap legislation, and said that the final rule was significantly improved due to this work. He also said that MasterCard looks forward to working with CUNA on any future threats to interchange fees.

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