Mastercard Commits to Lowering U.S. Interchange for Small Businesses and Broader Merchant Community
March 26 2024 - 8:45AM
Business Wire
Class settlement ensures no increases for five
years, maintains consumer protections and value; encourages strong,
ongoing competition and innovation
Mastercard (NYSE: MA) has reached an agreement to reduce its
U.S. credit card interchange rates for at least a five-year period
as part of a legal settlement with merchants.
The settlement, which also features a set of adjustments to
Mastercard’s network rules, allows small businesses and all
merchants to continue to benefit from accepting electronic payments
while delivering consumers a simple and secure way to pay.
The agreement – agreed to by Mastercard, Visa and the
court-appointed class counsel – provides all merchants with clarity
and certainty on several areas related to their acceptance of
payment cards, including:
- Interchange rate reduction – Payment networks, including
Mastercard, will reduce the published and effective interchange
rate on U.S.-issued consumer credit and commercial credit
transactions at U.S. merchant locations.
- Five-year rate cap – The interchange reduction will
effectively serve as a cap for a period of five years and will
apply to all U.S.-issued credit programs, including new products
required to be accepted under the Mastercard brand. The effort
delivers merchants the certainty and visibility of their acceptance
programs while supporting continued competition within the
industry.
- Simplified surcharging and discounting rules – As part
of the settlement agreement, the networks will activate a
simplified approach to credit card transaction surcharging,
providing merchants more optionality. These rules will maintain
core consumer protections and transparency, replacing standards
that had been updated in 2012.
“This agreement brings closure to a long-standing dispute by
delivering substantial certainty and value to business owners,
including flexibility in how they manage acceptance of card
programs,” said Rob Beard, Chief Legal Officer, General Counsel and
Head of Global Policy at Mastercard. “As the court reviews the
settlement, we will focus our energy on continuing to provide
consumers, small businesses and all business owners what they
expect from Mastercard – a better payments experience, strong value
and peace of mind.”
The settlement is subject to final approval by the Eastern
District Court of New York. Upon final approval of the class
settlement by the court, Mastercard will have resolved the vast
majority of all pending U.S. merchant litigations that are directed
at seeking changes to the company’s interchange structure and
merchant acceptance rules.
In agreeing to the settlement, Mastercard does not admit to any
improper conduct with respect to the plaintiffs’ allegations. All
rules practice changes will occur after approval of the settlement,
most likely in late 2024 or early 2025.
This agreement follows a prior settlement with a damages class.
That litigation and the impact to Mastercard are described in more
detail in the company's Annual Report on Form 10-K for the
year-ended December 31, 2023.
About Mastercard (NYSE:MA)
Mastercard is a global technology company in the payments
industry. Our mission is to connect and power an inclusive, digital
economy that benefits everyone, everywhere by making transactions
safe, simple, smart and accessible. Using secure data and networks,
partnerships and passion, our innovations and solutions help
individuals, financial institutions, governments and businesses
realize their greatest potential. With connections across more than
210 countries and territories, we are building a sustainable world
that unlocks priceless possibilities for all.
Forward-Looking Statements
This press release contains forward-looking statements pursuant
to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. All statements other than statements of
historical facts may be forward-looking statements. When used in
this press release, the words “believe,” “expect,” “could,” “may,”
“would,” “will,” “trend” and similar words are intended to identify
forward-looking statements. Examples of forward-looking statements
include, but are not limited to, statements that relate to
Mastercard’s future prospects, developments and business
strategies, as well as the impact of the settlement agreement on
Mastercard’s business. We caution you to not place undue reliance
on these forward-looking statements, as they speak only as of the
date they are made. Except for the company’s ongoing obligations
under the U.S. federal securities laws, the company does not intend
to update or otherwise revise the forward-looking information to
reflect actual results of operations, changes in financial
condition, changes in estimates, expectations or assumptions,
changes in general economic or industry conditions or other
circumstances arising and/or existing since the preparation of this
press release or to reflect the occurrence of any unanticipated
events.
Many factors and uncertainties relating to our operations and
our business environment, all of which are difficult to predict and
many of which are outside of our control, influence whether any
forward-looking statements can or will be achieved. Any one of
these factors could cause our actual results or the impact of the
settlement agreement to differ materially from those expressed or
implied in writing in any forward-looking statements made by
Mastercard or on its behalf. Such factors related to the settlement
agreement include, but are not limited to, whether court approval
of the settlement agreement will be obtained.
For additional information on other factors related to
Mastercard’s overall business that could cause Mastercard’s actual
results to differ materially from expected results, please see the
company’s filings with the Securities and Exchange Commission,
including the company’s Annual Report on Form 10-K for the year
ended December 31, 2023, and any subsequent reports on Forms 10-Q
and 8-K.
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version on businesswire.com: https://www.businesswire.com/news/home/20240326117423/en/
Mastercard Investor Relations Contact Devin Corr,
914-249-4565 investor.relations@mastercard.com
Mastercard Communications Contact Seth Eisen,
914-249-3153 Seth.Eisen@mastercard.com
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