MasterCard Announces US Interchange Initiatives

These initiatives, which include publishing all the MasterCard interchange rates that apply to US merchants and establishing a cap on interchange fees on fuel purchases at petroleum retailers, build on a series of steps MasterCard has taken to recognize the important voice of merchants in today's vibrant payments industry.

"Consumers and merchants as well as MasterCard and its customers all benefit from a strong, competitive payments industry," said Walt Macnee, president, Americas, MasterCard. "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 said.

"We have heard the merchant concerns loud and clear," said Joshua Peirez, Group Executive, Global Public Policy for MasterCard. "We were the first in the industry to publish our merchant rules and procedures on our website, making them available free of charge or restrictions to any merchant who wants to access them. Merchants have since told us they would like us to publish our U.S. interchange rate schedule, and we are making a commitment to them that we will post the rates on our website on or before November 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."

When published, the interchange rate schedule will be available at www.mastercardmerchant.com, where merchants can now access the MasterCard rules manual. The site also provides information to help merchants leverage card acceptance for their businesses.

"Similarly, merchants have told us that interchange fees on rapidly rising gasoline prices are a significant concern to them," Peirez said. "MasterCard understands this concern. 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. 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%."

Separately, Convenience Store Decisions carries news today that Shell Oil Products has negotiated a permanent MasterCard merchant service fee reduction for its branded operators.