US FTC orders Mastercard to open debit services for competing payment providers

Representative Image/ Reuters

The United States Federal Trade Commission (FTC) has ordered Mastercard to provide competing services with the necessary information to process debit card transactions.

The FTC called Mastercard's tactics "Illegal" and said it has forced, "merchants to route debit card payments through its payment network."

In a proposed order, the FTC said Mastercard will need to hand over the customer account information needed, so that competing services can process debit card payments. It called upon the company to reverse the practice it has been using to keep competitors, "out of the ecommerce debit payment business."

“This is a victory for consumers and the merchants who rely on debit card payments to operate their businesses,” said Holly Vedova, Director of the FTC’s Bureau of Competition.

“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.”

Mastercard and Visa are two of the leading payment providers in the United States, and according to the FTC, the processing fees charged by these networks totalled billions of dollars every year.

The FTC said that the popularity of online debit card services has been growing, "especially quickly for purchases consumers make using their personal devices equipped with ewallet applications such as Apple Pay, Google Pay, and Samsung Wallet."