FTC Finalizes Consent Order on Mastercard Anticompetitive Debit Card Practices

The card firm illegally blocked retailers’ ability to route e-commerce debit card transactions over competing networks.

May 31, 2023

WASHINGTON—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 e-commerce 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.

“Mastercard has blocked competition among debit networks for too long,” said Doug Kantor, NACS general counsel. “With this order, Mastercard should finally compete on the merits like other businesses do. Unfortunately, we have seen Mastercard try to evade regulations in the past. We look forward to the FTC monitoring things closely and taking action should Mastercard try to undermine the purpose of this order.”

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 e-commerce transactions using Mastercard-branded debit cards saved in e-wallets 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.