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MasterCard Credit Card Acceptance Guidelines

Written by Nickel - 20 Comments

Last week I wrote about Visa’s credit card acceptance guidelines. This week, I thought it would be interesting to take a look at MasterCard’s merchant guidelines.

MasterCard credit card rules

What follows is a synopsis of MasterCard’s rules regarding card acceptance straight from their merchant guide. The rules regarding card acceptance aren’t quite as explicit as Visa’s in some areas, though there are many parallels. Also note that there are many more rules that what I’ve listed below — I tried to filter out the ones with the least everyday relevance.

Honor all cards. Merchants are required to honor all valid MasterCards without discrimination when properly presented for payment. Merchants may not discriminate amongst customers who seek to make purchases with a MasterCard, nor can they discriminate against or discourage the use of a MasterCard in favor of another brand.

Additional cardholder identification. A merchant must not refuse to complete a transaction solely because a cardholder who has presented a card to pay for a purchase refuses to provide additional identification.

Charges to cardholders. A merchant may not directly or indirectly require a cardholder to pay a surcharge or any part of the merchant processing fees charged in connection with a transaction. However, fees are allowable if they are charged regardless of the form of the payment, and merchants can provide a cash discount.

Minimum/maximum transaction amount prohibited. A merchant may not require, or indicate that it requires, a minimum or maximum transaction amount in order to accept a valid and properly presented MasterCard.

Sale or exchange of information. Merchants may not sell, purchase, provide, exchange, or in any manner disclose MasterCard account numbers, transaction details, or a cardholder’s personal information.

Noncompliance assessment. If MasterCard learns of a merchant’s non-compliance to their rules, they will notify the “acquirer” (i.e., the bank that processes transactions for the merchant) and the acquirer must “promptly” bring the merchant back into compliance.

Failure to safeguard account data. If a merchant is found to have violated any of the security rules (there are several listed), MasterCard can impost a noncompliance assessment of up to $100,000 per violation. They also specify the steps a merchant must take if they believe account data has been compromised, including notification of the acquirer withing 24 hours.

There are a handful of other requirements that I’ve heard about with MasterCards that weren’t listed in the their merchant guide. For example, the cards have to be signed to be valid, and so on. Once again, I’m betting that the biggest hot-button issue will be asking for ID, followed closely by minimum transaction requirements.

What’s your biggest annoyance when it comes to merchants accepting (or not) you credit card?

Source: MasterCard.com

Published on March 5th, 2010 - 20 Comments
Filed under: Credit Cards

About the author: is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

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20 Responses to “MasterCard Credit Card Acceptance Guidelines”

  1. 1
    Mo Says:

    Interesting, I often see a minimum credit card purchase amount. It’s nice to know the actual rule so I won’t feel like I need to buy more items to reach a minimum. I’m sure this will cause a few arguments if this is pointed out to merchants…

  2. 2
    Alex Says:

    Not one. I don’t use stinking credit cards from stinking credit card companies. It’s legal loan sharking just like the stores that charge you for cashing your pay cheques since you credit rating sucks. More crap that the government has deemed illegal but companies find a loophole in the law and screw the consumer and the government won’t do squat about it.

  3. 3
    Jeff @ Sustainablelifeblog Says:

    It was interesting reading these rules. Before I had no idea that it was against the rules for a minimum transaction amount. Usually if I want to buy something in a place that has a minimum transaction amount and it wont top the barrier, I usually just don’t buy it at all. Also, I get annoyed when people ask for ID, but understand why they do it (the card is not signed). But that only means that they are taking an invalid credit card.

  4. 4
    John Says:

    In regards to “Honor all cards”, is it legal for them to discount only if you use their credit card? E.g., Macy’s etc. has a 15% if you use their card only. Or is this more related to “cash discount” allowed?

  5. 5
    Derek Says:

    My wife worked for a credit card processor for many years. She always disliked seeing the signs that would say, “min of $XX required if using a credit card”. That is against VI/MC rules and regs.

    @John, no it’s not illegal for a store to discount if you use their store card.

    I know merchants aren’t allowed to add a surcharge for using debit/credit.

  6. 6
    kitty Says:

    I don’t really remember any annoyances. I’ve never really cared about minimum purchase: if this is a business I want around, and it’s a small business, I just use cash or personal check in this case – all local businesses around here take personal checks.

    One business nearby – an absolutely excellent French pastry shop/cafe – has a sign saying essentially to please be mindful of their expenses and use credit cards only for purchases over $25. They don’t tell you they wouldn’t take your card for smaller purchases, they just ask you to please help them and not do it. I don’t have a problem with it: this is a very small family-owned business that is absolutely excellent, and I want it around. So I just use cash for smaller purchases. Interestingly they don’t take debit cards which surprises me: I thought interchange fees were higher on credit cards than on debit cards so debit cards should be cheaper for them, but I guess it’s not. I might ask them next time I am there.

    @Alex – what “stinking” credit card companies do you have in mind? Visa and Master Card aren’t involved in lending AT ALL, they just get fixed transaction fees for the bulk of transactions as well as small percentage of interchange fees, and they get it even if you use your Visa or MC branded debit card. It’s the issuer i.e. the same bank that you probably use for your savings/CDs/checking/debit that sets the interest rates/fees/lending rules. I just love it when people rail about not doing business with “credit card companies” and don’t understand that these are same banks they do business with every day.

  7. 7
    GhostMom01 Says:

    @John: The must honor all cards only applies to all major credit cards: Mastercard, Visa, Discover and American Express. Department store cards are exempt from this rule unless they are actually say they are a specific major credit card, such as a Sears Mastercard.

    This rule stems from the lawsuit filed by Discover Financial Services and lost by Visa and Mastercard. Both Visa and MC told their merchants they could not accept Discover Cards and run the transactions through the Visa/MC credit card terminals. This meant that if a merchant wanted to accept Discover, they had to sign up with Discover’s merchant network. The lawsuit alleged Visa and MC were trying to monopolize the credit card industry (which they were). The courts agreed and Visa/MC were ordered to pay an Discover obscene fine which greatly helped my stock and my husband’s salary.

    Regardless if the signage is posted, all merchants that accept major credit cards must accept all major credit cards. Just because the signage in the window doesn’t says they accept Discover, the merchant is now legally required to do so.

    That being said, I have had terminals that have conveniently not been programmed to accept the other cards yet. It sounds like these merchants are supposed to be reported by the consumer so the terminal can be updated.

  8. 8
    GhostMom01 Says:

    @Kitty: My understanding of the exchange rate on the debit/credit card purchases is pretty limited but, if a merchant accepts both debit cards and credit cards, the exchange rate is higher for debit cards because it still runs over the credit card network and must pay not only the debit card fees but also for the use of the credit card network.

    Some smaller places choose to only accept debit card fees which I believe exempts them from the credit card network fees because they are not processing multiple transactions of both kinds.

  9. 9
    GhostMom01 Says:

    Is there a website where I could find additional information and/or get actual documentation of the fact that merchants are not allowed to add a surcharge for transactions?

    I used to pay my daughter’s school tuition using my credit card and was socked anywhere from $7-$12 for surcharge. This wasn’t documented anywhere as to why her $290 payment was $297 on my credit card and the company billing the tuition blamed the credit card company but I knew better.

    The surcharge merchants try to add onto credit card transactions is actually the merchant processing fee charged by the credit card company to the merchant for the transaction. Merchants just try to be sneaky and slip it into the customer’s payment so they can make more money.

    I ultimately opened a second checking account to process only those payments without the surcharge. When the payment isn’t pending, there’s a whopping $.43 in the account but at least I don’t have to worry about putting my checking account on someone’s website.

  10. 10
    Mike Says:

    @GhostMom01

    I have a huge problem at Subway (about 1/3 of all stores) when trying to pay with Discover. They take MC/Visa, but not Discover.

    Is there some legal document or court decision I can bring with me and whip out if they refuse to take Discover but do take MC/Visa?

    If there is a legal rule requiring that, then I should be able to hold them to it. If they refuse to take the card, they should either give me a discount, the purchase free, or risk having me report them.

  11. 11
    Adam Says:

    @Mike

    A merchant doesn’t have to accept all types of cards. These are MasterCard rules for merchants that accept MasterCards and it says that the merchant must accept all MasterCards, not all types of card. In fact, I’m sure they’d love it if the merchant only accepted MasterCard (like the Olympics did with Visa)

    Here are the MasterCard merchant rules: http://www.mastercard.com/us/m.....rules.html

    I looked at them once, and I believe some government institutions are exempt rules about not being able to add a surcharge.

  12. 12
    cemccon Says:

    I know that Sam’s Club takes any debit cards, but only MasterCard and Discover credit cards (not Visa). Is that a violation, and if so, is their parent company (Wal-Mart) too big to enforce the rules on?

    In the same vein as GhostMom01, our local Village changes a ’surcharge’ or convience [sp?] fee for paying our water bill on-line via credit card. The State of Illinois charges extra for using your credit card on-line to renew your lisence plate sticker…

  13. 13
    Mike Says:

    @Adam

    I was looking at the comment above from GhostMom01 that said due to a LAWSUIT, businesses that take Mastercard and Visa must also take Discover – not based on the Mastercard rules…but based on a lawsuit. I’m just wondering if there is some sort of proof or something of that nature that I can carry with me because there are many times when I want to pay with Discover but they only take MC and Visa.

    @cemccon

    They can charge a surcharge/convience fee as long as the payment method itself is not the “normal channel” for doing payments.

  14. 14
    Mike Mc Says:

    “Additional cardholder identification. A merchant must not refuse to complete a transaction solely because a cardholder who has presented a card to pay for a purchase refuses to provide additional identification.”

    Way to step up the fight against identity theft and CC fraud MasterCard.

  15. 15
    cheezfri Says:

    Laws in several states also make it illegal for merchants to write a cardholder’s personal information, such as an address or phone number, on a sales receipt.

    A Merchant in a country or region that supports use of the MasterCard Address Verification Service (AVS) may require the Cardholder’s ZIP or postal code to complete a Cardholder-Activated Terminal (CAT) Transaction, or the Cardholder’s address and ZIP or postal code to complete a mail order, phone order, or e-commerce
    Transaction.

    Rules for Visa Merchants—Card Acceptance and Chargeback Management Guidelines:
    http://usa.visa.com/download/m.....chants.pdf

    MasterCard Rules—Merchants and Sales Transactions:
    http://www.mastercard.com/us/m.....public.pdf

    To report a merchant, write to Visa Inc. P.O. Box 8999 San Francisco, CA 94128-8999 or call 1-800-VISA-911, press zero twice, and ask to file an “incident report” regarding a merchant violation. And/or go to: http://www.mastercard.com/us/p.....tions.html

    @GhostMom01: The case is Discover Financial Services Inc. v. Visa USA Inc., 04-cv-07844, U.S. District Court, Southern District of New York (Manhattan). Discover had won any appeals to that ruling so far, and according to this link: http://www.bloomberg.com/apps/.....rdWpuRyQPQ they have settled with Mastercard and Visa

  16. 16
    Mike Says:

    @Mike Mc

    “Way to step up the fight against identity theft and CC fraud MasterCard.”

    Exactly. Its not a good idea for a criminal to have all of your credit card information AND your driver’s license number, address, etc.

    Perhaps it would be a good idea to have photos on all credit cards. Won’t prevent crime, but would cut back on it.

  17. 17
    Adam Says:

    @ Mike, I read GhostMom01’s comments as a question wondering if there was a lawsuit. I don’t think there are any laws regarding requiring someone to take all types of cards if they take one. They are independent businesses and can take whatever cards they want and can refuse whatever cards they want (within the rules of the card). It may be bad business, but they can do it.

  18. 18
    Pam King Says:

    I have been advised, that as a merchant who accepts credit cards, I must now carry insurance. It appears that this is to protect customer’s information that may be retrieved over the internet. I do not have the internet in my store. I have a point of sale computer that asks only if the sale is cash, check or credit card. I have no way of retrieving the card number once the customer has left. I found this site while trying to find out about my credit card merchant co. When I pull up the company asking for the information I get into a BBB I think the company I am doig business with is part of the company issuing the insurance. Does anyone know if there is a new compliance law that requires me, as a merchant, to take out insurance?

  19. 19
    Richard Ray Says:

    My wife and I run a small business, and we accept credit cards as a convenience to our customers. Contrary to the posts that state that if a merchant accepts ONE brand of card, that they must accept ALL cards, we do NOT accept all cards, and we are not required to do so. We originally accepted American Express, but their merchant fees were so high they were cutting significantly into our bottom line. So we dropped them like a bad habit. Our customers could care less. VISA, Master Card and Discover are the only cards we accept.

    We do not, nor will we in the future, accept American Express.

  20. 20
    Debbie Stokes Says:

    I manage the Pamcel Community Federal Credit union in Pampa, Texas. We issue mastercard debit cards to our members. Due to fraud we have blocked online transactions. Now we are finding out that members can not enter there pin numbers at many of the merchants so they are getting declined as the merchant is keying in the front and back numbers. These are trying to process as online so of coarse they will be declined, but they are card present transactions. Do the merchants have to provide a pin pad to enter pins?

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