The Federal Trade Commission (FTC) wants Mastercard to share card data with competing payment networks.
Under a proposed order announced Friday (Dec. 23), Mastercard will have to share with competing networks the customer account information needed to process debit payments, the FTC said in a press release.
“This is a victory for consumers and the merchants who rely on debit card payments to operate their business,” Holly Vedova, director of the FTC’s Bureau of Competition, said in the release.
The FTC order focuses on tokenized transactions.
As PYMNTS has reported, tokenization is the process of substituting a sensitive data element with a non-sensitive equivalent, referred to as a token, that has no extrinsic or exploitable meaning or value. The token is a reference that maps back to the sensitive data through a tokenization system.
It was reported in October that the FTC was looking into whether Mastercard’s and Visa’s security tokens prevent debit-card routing competition on certain digital payments.
The FTC said in the Friday press release that its proposed order would require Mastercard to provide competing networks with the customer’s personal account number corresponding to a token received by the network to process a debit card payment.
In a statement provided to PYMNTS, Mastercard confirmed that it had entered into the agreement with the FTC. The firm said that it believes its existing routing practices are lawful and provide choice to merchants, and that it will update its processes to comply with the order and provide “even greater choice.”
“While we are taking these steps to bring this matter to a close, there should be no question that tokenized transactions provide an increased level of protection to both consumers and merchants,” Mastercard said in the statement. “This focus on security guides our efforts in a highly competitive market and provides the incentive for us to continue investing in innovations that promote the peace of mind every person expects.”
The FTC voted 4 to 0 to issue the consent agreement. The agreement will be subject to public comment after being published in the Federal Register. The commission will then decide whether to make the proposed order final.
How Consumers Pay Online With Stored Credentials
Convenience drives some consumers to store their payment credentials with merchants, while security concerns give other customers pause. For “How We Pay Digitally: Stored Credentials Edition,” a collaboration with Amazon Web Services, PYMNTS surveyed 2,102 U.S. consumers to analyze consumers’ dilemma and reveal how merchants can win over holdouts.