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Mastecard Rules

Introduction

This knowledge is essential for specifically Mastercard customers. The data is around Mastercard rules. Source: https://www.mastercard.us/en-us/business/overview/support/rules.html

Eligibility to be a Customer

Payment Transfer Activity Customer

An entity that is or is eligible to be a Principal, Affiliate, Association, or other entity that has been approved by the Corporation for Participation in a Payment Transfer Activity (PTA) Program and that satisfies such eligibility criteria as the Corporation may adopt from time to time, consistent with the promotion of safe and sound business practices, may apply to be a PTA Customer. No entity may Participate in a PTA Program as a PTA Customer until that entity is approved to be a PTA Customer, has executed the applicable PTA Agreement for the proposed PTA Program in a form acceptable to the Corporation, and has paid all associated fees and other costs. Prior to commencing each PTA Program, a PTA Customer must enter into a PTA Agreement with the Corporation for each PTA Program.

An entity may be a Principal for Payment Transfer Activity and an Affiliate for another Activity, or vice versa. An entity applying to Participate as a Principal in Payment Transfer Activity(ies) and that is Participating in another Activity as an Affiliate, must have obtained the express written consent of its Sponsor.

The decision to approve an applicant as a PTA Customer (including, admission of such PTA Customer as an Originating Institution and/or Receiving Customer) is at the discretion of the Corporation.

The eligibility criteria for a PTA Customer includes:

  1. As applicable, compliance with the Payment Card Industry Data Security Standard (PCI DSS) or other standards related to securing and protecting data as specified in the Standards applicable to a particular PTA Program or as mutually agreed in writing by the PTA Customer and the Corporation for such PTA Program;
  2. Compliance with all applicable laws and regulations for each jurisdiction in which the PTA Program is proposed to be conducted;
  3. Compliance with all applicable PTA Rules and Standards; and
  4. Such other criteria as the Corporation deems necessary or appropriate to safeguard the safety and security of the Corporation and Payment Transfer Activity.

Anti-Money Laundering Requirements

Each Customer conducting or proposing to conduct Activity must have a written AML compliance Program with a policy, procedures, and controls in place to safeguard the Corporation and the Interchange System from and against the use of the Interchange System for money laundering and/or terrorist financing. Each Customer’s AML compliance Program must be commensurate with its respective AML risk profile and fully implemented in accordance with this Rule and local regulatory requirements.

A Customer’s AML compliance Program must address, in a manner satisfactory to the Corporation, all Activity and include, at a minimum, the following:

  1. A process to ensure thorough client identification and due diligence;
  2. Sufficient controls, resources, and monitoring systems for the prompt detection and reporting of suspicious activity, including the requirements set forth in Rule 1.2.1.1;
  3. Compliance with all regulatory record-keeping and reporting requirements;
  4. Risk assessment processes designed to identify and apply appropriate risk management controls;
  5. A training program for all personnel whose duties require knowledge of the AML compliance Program and requirements; and
  6. An audit process to periodically test controls.

Transfer of Cards to India Residents is Prohibited without a License

An Issuer that reasonably believes that its Cardholders will distribute, transfer, or in any way provide Cards issued by the Issuer to residents of India must become Licensed in India and receive written authorization from the Reserve Bank of India.

Unless the Issuer is Licensed in India and has written authorization from the Reserve Bank of India, an Issuer that issues Cards to Cardholders that reside outside of India must communicate to those Cardholders in the terms and conditions of the cardholder agreement that such Cards must not be distributed, transferred, or in any way provided to residents of India.

Changing Customer Status

In the event that an Affiliate wishes to become a Principal or a Principal wishes to become an Affiliate, the Customer must notify the Corporation and submit such information as the Corporation deems necessary.

It is within the Corporation’s discretion whether to grant the requested change in Customer status.

Customer Name Change

The Corporation must receive written notice at least 30 days before the effective date of any proposed Customer name change.

A Customer that proposes to change its name must promptly undertake necessary or appropriate action to ensure that its Licenses and Activities disclose the Customer’s updated name.

Portfolio Sale, Transfer, or Withdrawal

The Corporation must receive written notice at least 30 days before the effective date of any proposed transfer or assignment of a Mastercard Portfolio.

A Customer must promptly provide the Corporation any information requested by the Corporation relating to such an event or proposed event. If such transfer or assignment will result in a change of Control of the Customer or the Customer’s issuing Program, acquiring Program, or both, then Rule 1.12 shall apply.

A Principal must not withdraw a Maestro or Cirrus Portfolio from participation in the Interchange System except upon fulfillment of the following conditions:

  1. The Principal must provide the Corporation with at least six months prior written notice of its intent to withdraw a Portfolio. If confidential negotiations surrounding a Portfolio sale would render six months’ notice unduly disruptive, the Corporation may accept a shorter time at its discretion.
  2. The Principal must certify in writing to the Corporation that as of the date of withdrawal, no Cards will be in circulation, unless the Corporation has approved a plan for the phased withdrawal of the Portfolio. Any phased withdrawal must not exceed the lesser of one full re-issuance cycle or two years. Any withdrawal plan must guarantee that Cards still in circulation will continue to provide access to Accounts through the Corporation.
  3. If there is a new owner of the Portfolio, such owner must be a Customer of the Corporation. Alternatively, if the new owner is not eligible to be Licensed, then it must enter into an agreement with the Corporation to be bound by all Rules applicable to the Portfolio during its withdrawal period.

Payment Transfer Activity Variation

The Rule on this subject, as it applies to Payment Transfer Activity, is revised and restated as follows:

The Corporation must receive written notice at least 30 days before the effective date of any PTA Customer’s proposed transfer or assignment of its obligations under the Standards applicable to its Participation in Payment Transfer Activity. A Customer must promptly provide the Corporation any information requested by the Corporation relating to such an event or proposed event. If such transfer or assignment will result in a change of Control of the Customer, then Rule 1.12 shall apply.

Termination

The Participation or Licenses or Digital Activity Agreements or PTA Agreements of a Customer may terminate in either of two ways: voluntary termination, or termination by the Corporation.

Voluntary Termination

A Customer may voluntarily terminate its Participation and/or Licenses and/or Digital Activity Agreements and/or PTA Agreements by providing written notice and submitting documentation as then required by the Corporation. The notice must fix a date on which the termination will be effective as follows:

Written notice to the corporation provided by or with respect to a Principal regarding termination of its Mastercard License must be received in advance of the termination effective date, by at least 30 days.

Written notice to the corporation provided by or with respect to a Digital Activity Customer regarding termination of its digital activity agreement must be received in advance of the termination effective date by at least 60 days.

When all Licenses, Digital Activity Agreements, and PTA Agreements are terminated, the Participation of a Customer also terminates.

Termination by the Corporation

Notwithstanding anything to the contrary set forth in a License or Digital Activity Agreement, the Corporation, at its sole discretion, may terminate a Customer’s Participation effective immediately and without prior notice, if:

  1. The Customer suspends payments within the meaning of Article IV of the Uniform Commercial Code in effect at the time in the State of Delaware, regardless of whether, in fact, the Customer is subject to the provisions thereof; or
  2. The Customer takes the required action by vote of its directors, stockholders, members, or other persons with the legal power to do so, or otherwise acts, to cease operations and to wind up the business of the Customer, such termination to be effective upon the date of the vote or other action; or
  3. The Customer fails or refuses to make payments in the ordinary course of business or becomes insolvent, makes an assignment for the benefit of creditors, or seeks the protection, by the filing of a petition or otherwise, of any bankruptcy or similar statute governing creditors’ rights generally; or
  4. The government or the governmental regulatory authority having jurisdiction over the Customer serves a notice of intention to suspend or revoke, or suspends or revokes, the operations or the charter of the Customer; or
  5. A liquidating agent, conservator, or receiver is appointed for the Customer, or the Customer is placed in liquidation by any appropriate governmental, regulatory, or judicial authority; or
  6. The Customer’s right to engage in Activity or Digital Activity, as the case may be, is suspended by the Corporation due to the Customer’s failure to comply with the Corporation’s Anti-Money Laundering and Sanctions Requirements in connection with its Program or to comply with applicable law or regulation, and such suspension continues for 26 consecutive weeks; or
  7. The Customer fails to engage in Activity for 26 consecutive weeks; or
  8. The Customer is no longer Licensed to use any of the Marks; or
  9. The Customer (i) directly or indirectly engages in or facilitates any action or activity that is illegal, or that, in the good faith opinion of the Corporation, and whether or not addressed elsewhere in the Standards, has damaged or threatens to damage the goodwill or reputation of the Corporation or of any of its Marks; or (ii) makes or continues an association with a person or entity which association, in the good faith opinion of the Corporation, has damaged or threatens to damage the goodwill or reputation of the Corporation or of any of its Marks; or
  10. The Customer (i) provides to the Corporation inaccurate material information or fails to disclose responsive material information in or in connection with its application for a License; or (ii) at any other time, in connection with its Participation or Activity fails to timely provide to the Corporation information requested by the Corporation and that the Customer is required to provide pursuant to the terms of the License or the Standards; or
  11. The Customer fails at any time to satisfy any of the Customer eligibility criteria set forth in the Standards, or with respect to a Digital Activity Customer, all certifications granted by the Corporation in connection with the Digital Activity Customer’s conduct of Digital Activity have been suspended or revoked; or
  12. The Customer materially fails to operate at a scale or volume of operations consistent with the business plan approved by the Corporation in connection with the Customer’s application to be a Customer or application for a License, or both, as the case may be, as required by Rule 2.2.1; or
  13. The Corporation has reason to believe that the Customer is, or is a front for, or is assisting in the concealment of, a person or entity that engages in, attempts or threatens to engage in, or facilitates terrorist activity, narcotics trafficking, trafficking in persons, activities related to the proliferation of weapons of mass destruction, activity that violates or threatens to violate human rights or principles of national sovereignty, or money laundering to conceal any such activity. In this regard, and although not dispositive, the Corporation may consider the appearance of the Customer, its owner or a related person or entity on a United Nations or domestic or foreign governmental sanction list that identifies persons or entities believed to engage in such illicit activity; or
  14. The Corporation has reason to believe that not terminating such Participation would be harmful to the Corporation’s goodwill or reputation.

The Corporation may terminate any PTA Program and the associated PTA Agreement:

  • (a) upon ninety (90) days’ notice, if the Corporation discontinues such PTA Program in one or more of the countries in a PTA Customer’s Area of Use;
  • (b) upon notice, if the Corporation is required to obtain a new license in order to provide such PTA Program in a PTA Customer’s Area of Use;
  • (c) upon thirty (30) or fewer days’ notice, if required by applicable law or the relevant governing authority, if the Corporation is required by such law or governing authority to cease providing such PTA Program in one or more countries in the PTA Customer’s Area of Use;
  • (d) upon notice, if the Corporation determines in its sole discretion that a PTA Program cannot be provided in compliance with applicable law or governing authority, or if applicable, Non-Mastercard Systems and Network Standards; or
  • (e) upon notice, if the Corporation has received a claim or notice alleging that such PTA Program infringes or violates a third party’s intellectual property right.