“Mastercard requires merchants to route online ewallet transactions made using Mastercard-branded debit cards to Mastercard for processing—and bear the fees Mastercard charges. Merchants are thus not able to route these transactions to any other payment card network, including networks that may charge lower fees than Mastercard.”

💡 This shows Mastercard completely eliminated merchant routing choice for digital wallet transactions, the exact conduct the Durbin Amendment prohibits.

“Mastercard’s conduct violates the Durbin Amendment and Regulation II. If continued or extended to other contexts, these practices would further frustrate the competition-enhancing goals of the law and leave merchants without meaningful choice, to the ultimate detriment of consumers.”

💡 The FTC explicitly states Mastercard’s token policy violates federal law and harms consumers, not just a technical compliance issue.

“Underlying these rules is the principle that merchants must have the opportunity to choose between at least two unaffiliated payment card networks to process debit transactions. It is unlawful for payment card networks like Mastercard to inhibit merchants’ ability freely to make this choice.”

💡 This establishes the core legal principle Mastercard violated: merchants must have network choice and networks cannot inhibit that choice.

“Under Mastercard’s policy, there is no process by which a merchant’s acquirer or a competing back-of-card network can call out to Mastercard’s token vault and obtain the PAN or validated cryptogram associated with an ewallet token used in a card-not-present debit transaction, as it can in a card-present transaction.”

💡 Mastercard deliberately created a technical barrier that made it impossible for merchants to route digital wallet transactions to competing networks.

“Mastercard’s token policy reflects a business decision to protect and increase Mastercard’s debit revenue, as opposed to any technical limitation on Mastercard’s ability to allow merchant routing choice for card-not-present ewallet transactions.”

💡 The FTC found Mastercard’s conduct was driven by profit maximization, not technical necessity, making it a deliberate choice to break the law.

“Merchants paid more than $5 billon in network fees for debit transactions in 2019. As the intermediary between merchants and issuers, networks set both interchange fees and network fees. Merchants, and by extension consumers, thus bear most of the cost of authorizing, clearing, and settling debit transactions.”

💡 This quantifies the billions of dollars at stake and confirms that consumers ultimately bear the cost of these processing fees through higher prices.

“Over 80% of American adults have at least one debit card; these cards are used to make over $4 trillion in purchases every year. This total slightly exceeds the annual volume of purchases made using credit cards.”

💡 The scale of debit card usage shows how Mastercard’s conduct affected hundreds of millions of transactions and virtually every American consumer.

“The volume of debit card purchases made online rather than in stores has grown significantly in recent years, a trend accelerated by the COVID-19 pandemic. Online growth has been particularly rapid for debit cards used in ewallets such as Apple Pay, Google Pay, and Samsung Wallet.”

💡 This explains why Mastercard’s restrictions on digital wallet transactions became increasingly harmful as consumer behavior shifted toward mobile payments.

“The merchant is thus dependent on Mastercard’s detokenization to process ewallet transactions using Mastercard-branded debit cards.”

💡 Mastercard exploited its position as token service provider to create merchant dependency, turning a security feature into a competitive weapon.

“Thus, when a Mastercard-branded card is used in an ewallet for a card-not-present debit transaction, that transaction must be routed over the Mastercard network. Merchants are thus unable to route transactions to back-of-card networks. Indeed, Mastercard requires, and affirmatively tells merchants it requires, that merchants route card-not-present ewallet transactions using Mastercard-branded debit cards to the Mastercard network.”

💡 Mastercard did not just make competing routing difficult, it explicitly required merchants to use its network and told them so directly.

“These developments represented a threat to Mastercard’s debit card revenue and profitability. Mastercard thus adopted and maintained a policy of not detokenizing card-not-present ewallet debit transactions that merchants might otherwise attempt to route over competing networks.”

💡 This shows Mastercard’s conduct was a deliberate response to competitive threats, choosing to violate the law rather than compete fairly and risk losing revenue.

“Congress anticipated these provisions would force networks to compete for merchants’ business and thus lower fees. Congress also expected these savings would be passed on to consumers in the form of lower prices.”

💡 Mastercard’s conduct directly frustrated Congress’s intent to lower costs for merchants and consumers through network competition.

“A token stored in an ewallet in lieu of the PAN is itself a debit card governed by the Durbin Amendment and Regulation II. Under both, a debit card is any card, or other payment code or device, issued or approved for use through a payment card network to debit an account.”

💡 The FTC made clear that payment tokens fall under the same legal requirements as physical debit cards, closing any loophole Mastercard might claim.

“Mastercard’s policy does not allow card-not-present transactions using ewallet tokens (i.e., debit cards) to be routed to competing debit networks. A merchant thus has only one option: Mastercard’s network. Mastercard’s policy thereby inhibits the merchant’s ability to direct the routing of card-not-present transactions using ewallet tokens over the available network of its choosing.”

💡 This directly links Mastercard’s conduct to the specific prohibition in the Durbin Amendment against inhibiting merchant routing choice.

“Mastercard Incorporated, a corporation… neither admits nor denies any of the allegations in the complaint, except as specifically stated in this order.”

💡 Despite clear evidence of legal violations, Mastercard was allowed to settle without admitting wrongdoing, letting the company avoid accountability and preserve its reputation.