PURCHASE, N.Y. -- MasterCard yesterday posted on one of its website its interchange rates that apply to U.S. merchants, along with the comprehensive information merchants need to understand the rates and how they apply.
Mallory Duncan, chairman of the Merchants Payments Coalition (MPC) and senior vice president and general counsel at the National Retail Federation (NRF), responded: "This is a small step in the right direction toward transparency, but without full and unrestricted access to the operating rules that explain why Visa and MasterCard charge [image-nocss] so much, it's still only one piece of the puzzle. The excerpts provided on the MasterCard website and the background materials included in today's announcement don't begin to go far enough."
MasterCard had announced on September 5 that this information would be posted on the company website by November 1. The rate schedule can be accessed at www.mastercardmerchant.com, where merchants have been able to access the MasterCard merchant rules manual since August 2005. The document includes the interchange rates, as well as key qualifying criteria associated with each rate.
Walt Macnee, president of Americas, MasterCard, said "Although MasterCard's U.S. interchange rates have generally been available to merchants both through requests to merchant acquirers and independent sales organizations, and on the Internet, the merchant community has asked us for greater transparency, and we are pleased to accommodate their request.
"Just publishing rates alone could lead to confusion among merchants who may be seeing this information for the first time," Macnee noted. "We are confident that we are providing merchants with the information they need to understand the interchange rates and structure and determine which rates may apply to their transactions. We want to have an ongoing dialogue with merchants, acquirers and other interested parties about the format and content of our rate disclosure, as we plan to update this document regularly."
MasterCard typically updates interchange rates semi-annually, and going forward will update these rates on the website after each interchange rate announcement to issuers and acquirers, it said.
Duncan added, "More light needs to be shed on the excessive interchange rates merchants and consumers are forced to pay on every credit and debit card transaction. Visa's interchange list included more than 70 combinations of rates for different types of merchants, cards and transactions. MasterCard's list includes nearly 150 combinations. The shear number of rates alone is testimony to the opacity of the interchange system and the need for true transparency."
Duncan concluded, "Merely disclosing the rates is not sufficient. If MasterCard believes interchange is 'necessary and efficient' as they say in this announcement, we believe the rates charged should be competitively set at a 'necessary and efficient' level. The rates shown here go well beyond that point."
The MPC is a group of about 20 trade associations representing retailers, restaurants, supermarkets, drug stores, convenience stores, gas stations, on-line merchants and other businesses that accept debit and credit cards. MPC is fighting for a more competitive and transparent card system that works better for consumers and merchants alike, and reasonable fees based on actual transaction costs. The coalition's member associations collectively represent about 2.7 million locations with approximately 50 million employees.
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