Compliance Management, Data Security

Mastercard ordered by FTC to modify debit card processing practices

Mastercard has been directed by the U.S. Federal Trade Commission to change business practices in relation to its processing of debit card transactions, SiliconAngle reports. The FTC has ordered Mastercard to replace its use of the tokenization cybersecurity method, which involves the substitution of sensitive data, including account numbers, with another piece of data, which is then leveraged for processing payments, while the original account number is securely stored to avert hacking risk. However, such an approach is in violation of the Durbin Amendment under the Dodd-Frank Act that compels debit cards to have transaction process capabilities across different payment card networks. With tokenization, Mastercard has been blocking the interoperability of digital wallet app-linked debit cards with Visa, American Express, and other payment card networks. "This is a victory for consumers and the merchants who rely on debit card payments to operate their businesses. Congress directed the FTC to enforce this part of the Dodd-Frank Act and prevent precisely this kind of illegal behavior. We take this responsibility seriously, as demonstrated by our action today," said FTC Bureau of Competition Director Holly Vedova.

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