Following a public comment period, the Federal Trade Commission finalized a consent order settling charges that Mastercard used illegal business tactics to force merchants to route debit card payments through its payment network.
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. This reverses a tactic Mastercard allegedly had been using to prevent merchants from using competing networks to process certain ecommerce debit payments. The FTC alleged that practice violated provisions of the 2010 Dodd-Frank Act known as the Durbin Amendment and its implementing rule, Regulation II.
The Durbin Amendment requires banks to enable at least two unaffiliated networks on every debit card, thereby giving merchants a choice of which network to use for a given debit transaction. It also bars payment card networks from inhibiting 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 order requires Mastercard to end those practices and provide competing networks with customer account information they need to process debit payments. It also bans Mastercard from taking other actions to inhibit merchants’ ability to choose between competing debit card networks.
The Commission vote to approve the final order was 3-0.