PURCHASE, N.Y. — MasterCard International has taken steps, which it hopes will placate merchants and take some wind out of the sails of its critics.
Merchants and sympathetic lawmakers have been complaining that both Visa's and MasterCard's regulations and interchange rates are too complicated and not transparent. Now MasterCard has announced that it will publish all the interchange rates that apply to U.S. merchants taking their cards and will cap the interchange charged to petroleum retailers.
Card brand critics have suggested that Visa and MasterCard have kept the interchange rates too secret and petroleum retailers have recently been complaining about the additional cost of interchange in the face of higher gasoline prices.
Recommended For You
"We have heard the merchant concerns loud and clear," said Joshua Peirez, an executive with MasterCard. "We were the first in the industry to publish our merchant rules and procedures on our Web site, making them available free of charge or restrictions to any merchant who wants to access them," he said.
Peirez said MasterCard will post the rates on its Web site on or before Nov. 1, 2006.
"Interchange is only one component of the discount rate merchants pay for acceptance. Discount rates are set by the acquiring banks and independent service organizations that provide MasterCard acceptance to merchants," Peirez said. "The merchant community believes that having access to our rate schedule will provide additional transparency to the process, so we are pleased to be able to accommodate their request."
He also addressed some of the specifics of the cap on gasoline interchange.
"We believe that putting a cap on interchange fees when consumers use their MasterCard cards for gasoline purchases will benefit all gasoline retailers, as well as consumers who recognize that their purchases are faster and more convenient when they use their MasterCard cards at the pump," Peirez said. "The cap will apply to consumer credit and debit cards and will provide benefits to gasoline retailers on credit card transactions of about $50 or more. For example, on a $60 gasoline transaction the reduction in interchange could be as much as 21%."
Another MasterCard executive took pains to put the changes in the context of the ongoing debate of the card brand's interchange rates and how they are set.
"Consumers and merchants as well as MasterCard and its customers all benefit from a strong, competitive payments industry," said Walt Macnee, president of MasterCard's Americas division. "One of my key goals is to enhance our ability to deliver value to merchants across the region. We're doing this through forums such as our Merchant Advisory Groups that meet regularly so merchants can tell us what they need to engage in the payments system in the most efficient and beneficial manner possible.
"Among the things merchants have told us they want is additional transparency around interchange rates and that because of the unique structure of the petroleum distribution business, gasoline retailers are disproportionately affected by high oil prices," Macnee added. –[email protected]
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
