New MasterCard Rules on Fee Disclosures May Catch Many Payment Processors Unaware
Two MasterCard Inc. rules governing fee changes and disclosures may catch many in the payment industry unaware even though the rules first became known in December.
That is the assessment of attorneys Howard Herndon and Josh Rosenblatt at Frost Brown Todd LLC, a Nashville, Tenn.-based firm.
“Typically, acquiring banks and processors have processes in place to ensure that rule changes are identified and the appropriate changes made,” they note in a column. “Confusion over whether the new rules were indeed rules or just ‘best practices’ has caught many in the industry off-guard. As a result, many processors may already be unknowingly in breach of the new rules.”
One rule is that payment processors must now create a fee disclosure schedule to include with merchant applications and agreements. That includes fees such as the merchant discount rate, pass-through rates, interchange plus mark-up rates, bundled pricing plans, and fees for tiered, qualified, mid-qualified, and non-qualified rates, along with authorization and settlement fees.
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