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MasterCard Rules29 October 2010Updated 10 December 2010©1969–2010 MasterCard10 December 2010 • MasterCard RulesNoticesProprietary Rights The information contained in this document is proprietary andconfidential to MasterCard International Incorporated, one or more ofits affiliated entities (collectively “MasterCard”), or both.This material may not be duplicated, published, or disclosed, in wholeor in part, without the prior written permission of MasterCard.Trademarks Trademark notices and symbols used in this manual reflect theregistration status of MasterCard trademarks in the United States.Please consult with the Customer Operations Services team or theMasterCard Law Department for the registration status of particularproduct, program, or service names outside the United States.All third-party product and service names are trademarks or registeredtrademarks of their respective owners.Billing For printed documents, MasterCard will bill principal members. Pleaserefer to the appropriate MasterCard Consolidated Billing System (MCBS)document for billing-related information.Information AvailableOnlineMasterCard provides details about the standards used for thisdocument—including times expressed, language use, excerpted text,and contact information—on the Member Publications Support pageavailable on MasterCard OnLine®. Go to Member Publications Supportfor centralized information.Translation A translation of any MasterCard manual, bulletin, release, or otherMasterCard document into a language other than English is intendedsolely as a convenience to MasterCard customers. MasterCardprovides any translated document to its customers “AS IS” and makesno representations or warranties of any kind with respect to thetranslated document, including, but not limited to, its accuracy orreliability. In no event shall MasterCard be liable for any damagesresulting from a customer’s reliance on any translated document. TheEnglish version of any MasterCard document will take precedenceover any translated version in any legal proceeding.Publication Code BM©1969–2010 MasterCardMasterCard Rules • 10 December 2010 1Summary of Changes, 10 December 2010To locate these changes online, on the Adobe toolbar, click Find. In the Find box, type *chg*, andthen press ENTER. To move to the next change, press ENTER again.Description of Change Where to LookUpdated the Standards relating to the obligation to issue cards Chapter 2Chapter 11aUpdated the Standards relating to the provision and use of information Chapter 3Chapter 11aUpdated the Standards relating to the Selective Authorization Chapter 3Chapter 11aAdded the Standard relating to the Accounts on a Card Chapter 3Chapter 11aUpdated the Standards relating to the general rules for use of the marks Chapter 4Chapter 11aUpdated the Standards relating to the card acceptance requirements Chapter 5Chapter 11aUpdated the Standards relating to charges to cardholders Chapter 5Chapter 11a©1969–2010 MasterCardMasterCard Rules • 24 November 2010 1Summary of Changes, 24 November 2010To locate these changes online, on the Adobe toolbar, click Find. In the Find box, type *chg*, andthen press ENTER. To move to the next change, press ENTER again.Description of Change Where to LookUpdated the Standards relating to the minimum/maximum transaction amountprohibitedChapter 5Chapter 10Chapter 13Chapter 15©1969–2010 MasterCardMasterCard Rules • 29 October 2010 1Summary of Changes, 29 October 2010This update reflects changes associated with announcements in MasterCard Bulletins fromMay 2010 to October 2010, along with general reorganization necessary to improve the qualityand clarity of the rules across brands. To locate these changes online, on the Adobe toolbar,click Find. In the Find box, type *chg*, and then press ENTER. To move to the next change,press ENTER again.Description of Change Where to LookUpdated Standards for the POI currency conversion registration program Chapter 3Updated Standards relating to applicability of the Standards to members and theresolution of disputes between or among membersChapter 3Updated Standards relating to bilateral interchange fees to make it clear thatmembers that have bilateral interchange fee agreements must promptly informMasterCard of these agreementsChapter 9Added a new chapter relating to revised Standards for the Canada region toreflect changes resulting from the Code of Conduct for the Credit and DebitCard Industry in CanadaChapter 11aUpdated Standards for IVR Transactions. Chapter 14bUpdated the Standards relating to automated fuel dispenser transactions Chapter 15Updated Standards relating to Partial Approvals and Balance Responses Chapter 15Updated Standards relating to how issuers can identify an Internet gamblingtransaction for purposes of authorization processingChapter 15Clarified wording where appropriate Entire document©1969–2010 MasterCardMasterCard Rules • 10 December 2010 iTable of ContentsDefinitionsChapter 1 Membership1.1 Types of Members …………………………………………………………………………….. 1-11.1.1 Association Member ………………………………………………………………….. 1-11.1.2 Principal Member ……………………………………………………………………… 1-11.1.3 Affiliate Member ……………………………………………………………………….. 1-11.2 Eligibility to be a Member ………………………………………………………………….. 1-11.2.1 Principal Member or Affiliate Member ………………………………………… 1-11.2.2 Association Member ………………………………………………………………….. 1-21.2.3 Alternative Membership Eligibility Criteria …………………………………… 1-21.3 Application to be a Member ………………………………………………………………. 1-21.4 Interim Participation ………………………………………………………………………….. 1-31.5 Obligations, Rights and Responsibilities ……………………………………………… 1-31.5.1 Obligation to Become a Member ……………………………………………….. 1-31.5.2 Obligation to Participate ……………………………………………………………. 1-31.5.3 Right to Participate ……………………………………………………………………. 1-31.5.4 Membership Not Transferable ……………………………………………………. 1-41.5.5 Member Responsibilities ……………………………………………………………. 1-41.5.6 Enforcement of Payment of Fees and Other Obligations ……………… 1-41.6 Termination of Membership ………………………………………………………………. 1-51.6.1 Voluntary Termination ………………………………………………………………. 1-51.6.2 Termination by the Corporation …………………………………………………. 1-5Compliance Zones ………………………………………………………………………………….. 1-6Table of Contentsii©1969–2010 MasterCard10 December 2010 • MasterCard RulesChapter 2 Licensing and Licensed Activities2.1 Purpose of License; Eligibility …………………………………………………………….. 2-12.1.1 Single European Payments Area License …………………………………….. 2-12.2 License Application …………………………………………………………………………… 2-12.3 Area of Use ………………………………………………………………………………………. 2-12.3.1 Extending or Otherwise Modifying the Area of Use …………………….. 2-22.3.2 Central Acquiring—Europe Region Only …………………………………….. 2-42.4 Special Conditions of Membership or License ……………………………………… 2-42.5 MasterCard Anti-Money Laundering Program ………………………………………. 2-52.6 Obligation to Issue Cards …………………………………………………………………… 2-62.7 Liability for Assigned ICAs and BINs …………………………………………………… 2-62.7.1 Settlement Liability for Debit Licensees ………………………………………. 2-72.8 Obligations of a Sponsor …………………………………………………………………… 2-72.9 Name Change …………………………………………………………………………………… 2-72.10 Membership Fees and Assessments …………………………………………………… 2-72.11 Sale or Change in Ownership or Control of Member or Portfolio ………… 2-82.12 Suspension and Amendment of Membership or License or Both …………. 2-82.13 Rights, Liabilities, and Obligations of Terminated Members ………………… 2-92.14 Failure of Class A Member to Discharge Obligations ………………………… 2-112.15 System Liquidity…………………………………………………………………………….. 2-122.16 Loss Allocation Among Members ……………………………………………………. 2-132.17 Limitation of Obligation …………………………………………………………………. 2-132.18 Liability for Owned or Controlled Entities ……………………………………….. 2-142.19 Risk of Loss …………………………………………………………………………………… 2-15Compliance Zones ………………………………………………………………………………… 2-16Table of Contents©1969–2010 MasterCardMasterCard Rules • 10 December 2010 iiiChapter 3 Member Obligations3.1 Standards …………………………………………………………………………………………. 3-13.1.1 Variances …………………………………………………………………………………. 3-13.1.2 Failure to Comply with a Standard ……………………………………………… 3-23.1.2.1 Noncompliance Categories ………………………………………………… 3-23.1.2.1.1 Category A—Payment System Integrity ………………………. 3-23.1.2.1.2 Category B—Visible to Customers ……………………………… 3-33.1.2.1.3 Category C—Efficiency and Operational Performance …. 3-33.1.2.2 Noncompliance Assessments ……………………………………………… 3-33.1.2.3 Certification ……………………………………………………………………… 3-53.1.2.4 Review Process ………………………………………………………………… 3-53.1.2.5 Resolution of Review Request ……………………………………………. 3-53.1.3 Rules Applicable to Intracountry Transactions …………………………….. 3-53.2 Conduct of Activity ……………………………………………………………………………. 3-53.2.1 Conflict with Law ……………………………………………………………………… 3-63.2.2 Obligations of a Sponsor …………………………………………………………… 3-63.2.3 Affiliate Members ……………………………………………………………………… 3-63.2.4 Materially Adverse Financial Condition or Discrepancy ………………… 3-73.2.5 Compliance ………………………………………………………………………………. 3-73.2.6 Nondiscrimination—Europe Region Only …………………………………… 3-73.3 Indemnity and Limitation of Liability ………………………………………………….. 3-83.4 Choice of Laws ……………………………………………………………………………….. 3-103.5 Examination and Audit…………………………………………………………………….. 3-103.6 Provision and Use of Information …………………………………………………….. 3-123.6.1 Obligation of Member to Provide Information …………………………… 3-123.6.1.1 Information to Cardholders ……………………………………………… 3-123.6.1.2 Information to Merchants ………………………………………………… 3-123.6.1.3 Transaction Currency Information ……………………………………. 3-133.6.2 Confidential Information of Members ……………………………………….. 3-133.6.3 Use of Corporation Information by a Member …………………………… 3-143.6.4 Confidential Information of the Corporation and the Corporation’sAffiliates …………………………………………………………………………………………. 3-153.6.5 Data Protection—Europe Region Only ……………………………………… 3-153.7 Quarterly Member Report ………………………………………………………………… 3-153.7.1 Report Not Received ……………………………………………………………….. 3-163.7.2 Erroneous or Incomplete Report ………………………………………………. 3-16Table of Contentsiv©1969–2010 MasterCard10 December 2010 • MasterCard Rules3.7.3 Overpayment Claim ………………………………………………………………… 3-173.8 Authorization Service ………………………………………………………………………. 3-173.8.1 Selective Authorization ……………………………………………………………. 3-183.8.2 Authorization Routing ……………………………………………………………… 3-183.8.3 Full and Partial Reversals …………………………………………………………. 3-183.8.4 Full Approvals and Account Balance Responses ………………………… 3-183.9 Transaction Requirements ………………………………………………………………… 3-193.9.1 Chip Transactions and Hybrid Terminals…………………………………… 3-203.9.2 Card-Not-Present Transactions …………………………………………………. 3-213.9.3 Refund Transactions ………………………………………………………………… 3-213.9.4 Automated Fuel Dispenser Transactions ……………………………………. 3-213.9.5 Issuer Performance Standards…………………………………………………… 3-213.9.6 PIN-based Debit Transactions ………………………………………………….. 3-213.9.7 Euro Migration ………………………………………………………………………… 3-213.9.8 Chargebacks for Reissued Cards ………………………………………………. 3-223.9.9 MasterCard PayPass Transactions ……………………………………………… 3-223.10 Additional Member Obligations ………………………………………………………. 3-223.10.1 Safeguard Card Account and Transaction Information ………………. 3-223.10.2 Satisfaction of Minimum Member Obligations ………………………….. 3-223.10.3 Satisfaction of Minimum Financial Requirements ……………………… 3-223.10.4 Integrity of Brand and Network ……………………………………………… 3-233.10.5 Fees, Expenses and Other Payment Obligations ………………………. 3-233.10.5.1 Taxes and Other Charges ………………………………………………. 3-243.11 Limitation of Liability of Cardholders for Unauthorized Use ………………. 3-243.12 Pay-Per-Call Service ……………………………………………………………………….. 3-253.13 Encashment of MasterCard Travelers Cheques …………………………………. 3-253.14 Accounts on a Card ……………………………………………………………………….. 3-25Compliance Zones ………………………………………………………………………………… 3-25Chapter 4 Trademarks and Service Marks4.1 Right to Use the Marks ………………………………………………………………………. 4-14.1.1 Licenses …………………………………………………………………………………… 4-14.1.2 Protection and Registration of the Marks …………………………………….. 4-14.1.2.1 Registration of a Card Face Design …………………………………….. 4-2Table of Contents©1969–2010 MasterCardMasterCard Rules • 10 December 2010 v4.1.3 Misuse of a Mark ………………………………………………………………………. 4-24.2 General Rules for Use of the Marks ……………………………………………………. 4-24.2.1 Use of the Marks ………………………………………………………………………. 4-24.2.2 Compliance ………………………………………………………………………………. 4-34.2.3 Required Use ……………………………………………………………………………. 4-34.2.4 Review of Solicitations ………………………………………………………………. 4-34.2.5 Signage System …………………………………………………………………………. 4-34.2.6 Particular Use of a Mark ……………………………………………………………. 4-44.2.6.1 Generic Use ……………………………………………………………………… 4-44.2.6.2 Use of Modifiers ……………………………………………………………….. 4-44.2.6.3 Use on Stationery ……………………………………………………………… 4-44.2.6.4 Use on Non-Licensed Goods ……………………………………………… 4-44.2.6.5 Use on Checks …………………………………………………………………. 4-44.2.6.6 Use on Cards ……………………………………………………………………. 4-54.2.7 Use of the MasterCard Word Mark ……………………………………………… 4-54.2.7.1 Use or Registration of “Master” Terminology ………………………. 4-54.2.7.2 Use of MasterCard in a Corporate, Business or Domain Name 4-54.2.7.3 Use of MasterCard in Text …………………………………………………. 4-64.2.7.4 Registration Notice ……………………………………………………………. 4-64.2.7.5 Program Names ………………………………………………………………… 4-64.2.8 Use of the Interlocking Circles Device ………………………………………… 4-64.2.8.1 Reproduction Standards …………………………………………………….. 4-64.2.8.2 Variations Prohibited ………………………………………………………… 4-74.2.8.3 Use or Registration of Similar Logos, Designs, and Names …… 4-74.2.9 Use of Multiple Brand Marks ……………………………………………………… 4-74.2.10 Use of the Card Face Design ……………………………………………………. 4-74.2.10.1 In Advertising and Marketing Material ………………………………. 4-74.2.10.2 In Merchant Advertising …………………………………………………… 4-84.2.10.3 In Statement Enclosures …………………………………………………… 4-84.2.11 Use of the MasterCard Brand Mark on Other Cards ……………………. 4-84.2.12 Use of a Competing Mark on Cards ………………………………………….. 4-84.2.13 Use of Other Acceptance Marks on Cards …………………………………. 4-94.2.14 Use on Mobile Payment Devices ………………………………………………. 4-9Compliance Zones ………………………………………………………………………………… 4-10Table of Contentsvi©1969–2010 MasterCard10 December 2010 • MasterCard RulesChapter 5 Merchants and Sales Transactions5.1 The Merchant Agreement…………………………………………………………………… 5-15.1.1 Verify Bona Fide Business Operation …………………………………………. 5-15.1.2 Required Terms ………………………………………………………………………… 5-15.1.3 Assessments for Merchant Agreement Noncompliance …………………. 5-25.2 Acquirer Obligations …………………………………………………………………………. 5-25.2.1 Acquiring Transactions………………………………………………………………. 5-25.2.2 Merchant and Sub-merchant Compliance with the Standards ……….. 5-35.2.3 Merchant Information ……………………………………………………………….. 5-35.2.4 Payments to Merchants ……………………………………………………………… 5-35.2.5 Supplying Materials …………………………………………………………………… 5-35.3 Merchant Monitoring …………………………………………………………………………. 5-45.4 Use of a Payment Facilitator ………………………………………………………………. 5-45.4.1 Responsibility for Payment Facilitator and Sub-merchant Activity …. 5-45.4.2 High-Risk Payment Facilitators …………………………………………………… 5-65.4.3 Registration Requirements for Payment Facilitators ……………………… 5-75.5 Payment Facilitator Obligations ………………………………………………………….. 5-85.5.1 Sub-merchant Screening Procedures …………………………………………… 5-85.5.2 MATCH Inquiry Required ………………………………………………………….. 5-95.5.3 Sub-merchant Agreement ………………………………………………………….. 5-95.5.3.1 Required Provisions ………………………………………………………… 5-105.5.4 Obligations as Sponsor of Sub-merchants …………………………………. 5-115.5.4.1 Submit Valid Transactions ……………………………………………….. 5-115.5.4.2 Sub-merchant Compliance with the Standards …………………… 5-115.5.4.3 Maintaining Sub-merchant Information …………………………….. 5-115.5.4.4 Payments to Sub-merchants …………………………………………….. 5-125.5.4.5 Supplying Materials to Sub-merchants ………………………………. 5-125.5.4.6 Sub-merchant Monitoring ………………………………………………… 5-125.6 Merchant Identification and Responsibility for Transactions ……………….. 5-125.7 Use of the Marks …………………………………………………………………………….. 5-135.7.1 Merchants Must Display the MasterCard Acceptance Mark …………. 5-145.7.2 Merchant Advertising and POI Materials ……………………………………. 5-145.7.3 Local/Regional Acceptance Brands …………………………………………… 5-145.7.4 Direct Mail Cardholder Solicitation Merchants ……………………………. 5-155.8 Card Acceptance Requirements ………………………………………………………… 5-165.8.1 Honor All Cards………………………………………………………………………. 5-16Table of Contents©1969–2010 MasterCardMasterCard Rules • 10 December 2010 vii5.8.2 Merchant Acceptance ………………………………………………………………. 5-175.8.3 Obtain an Authorization ………………………………………………………….. 5-175.8.4 Additional Cardholder Identification …………………………………………. 5-175.8.5 E-Commerce Transactions ……………………………………………………….. 5-175.8.6 Purchase With Cash Back Transactions …………………………………….. 5-175.9 Submitting Transactions …………………………………………………………………… 5-185.9.1 Valid Transactions …………………………………………………………………… 5-185.9.2 Submit Transactions within Three Business Days ………………………. 5-185.10 Noncompliance Assessments ………………………………………………………….. 5-195.11 Prohibited Practices ……………………………………………………………………….. 5-195.11.1 Discrimination ………………………………………………………………………. 5-195.11.2 Charges to Cardholders ………………………………………………………….. 5-195.11.3 Minimum/Maximum Transaction Amount Prohibited ……………….. 5-205.11.4 Scrip-dispensing Terminals …………………………………………………….. 5-205.11.5 Prohibited Transactions………………………………………………………….. 5-205.11.6 Other Forms of Payment ………………………………………………………… 5-205.11.7 Illegal or Brand-damaging Transactions …………………………………… 5-215.12 Security Rules ……………………………………………………………………………….. 5-215.12.1 Sale or Exchange of Information …………………………………………….. 5-225.12.2 Data Storage Entity Identification ……………………………………………. 5-225.12.2.1 DSE Registration Requirements ………………………………………. 5-225.13 Discounts or Other Benefits at the Point of Interaction …………………….. 5-22Compliance Zones ………………………………………………………………………………… 5-23Chapter 6 Special Issuer Programs6.1 Special Issuer Programs—General Requirements …………………………………. 6-16.1.1 Prior Consent of the Corporation ……………………………………………….. 6-16.1.2 Reservation of Rights ………………………………………………………………… 6-16.1.3 Cardholder Communication ……………………………………………………….. 6-16.2 Affinity and Co-Brand Card Programs …………………………………………………. 6-26.2.1 Program Partners ………………………………………………………………………. 6-26.2.2 Ownership and Control of the Program ……………………………………… 6-26.2.3 Issuer Identification on Program Cards ……………………………………….. 6-36.2.4 Program Name …………………………………………………………………………. 6-46.2.5 Multiple Partners ………………………………………………………………………. 6-4Table of Contentsviii©1969–2010 MasterCard10 December 2010 • MasterCard Rules6.2.6 Accept All Cards without Discrimination …………………………………….. 6-46.2.7 Use of the MasterCard Acceptance Mark …………………………………….. 6-46.3 Brand Value Transactions and Proprietary Accounts ……………………………. 6-56.3.1 Proprietary Account Access ……………………………………………………….. 6-56.3.2 Fees and Reporting Requirements ………………………………………………. 6-66.4 Remote Transaction Accounts ……………………………………………………………. 6-66.4.1 Remote Transaction Account Requirements ………………………………… 6-76.4.1.1 Remote Transaction MasterCard M/Chip Account Programs …. 6-76.5 Secured Card Programs ……………………………………………………………………… 6-86.5.1 Secured Card Program Requirements ………………………………………….. 6-86.5.2 Refund of Fees …………………………………………………………………………. 6-86.5.3 Secured Card Program Solicitation and Disclosure Requirements ….. 6-86.6 Prepaid Card Programs ……………………………………………………………………… 6-9Compliance Zones ………………………………………………………………………………….. 6-9Chapter 7 Member Service Providers7.1 Applicability of Member Service Provider Rules …………………………………… 7-17.2 MSP Categories …………………………………………………………………………………. 7-17.2.1 Independent Sales Organization ………………………………………………… 7-17.2.2 Third Party Processor ………………………………………………………………… 7-17.2.2.1 Type I ……………………………………………………………………………… 7-27.2.2.2 Type II …………………………………………………………………………….. 7-27.2.3 Determination of Program Service ……………………………………………… 7-27.3 General Obligations ………………………………………………………………………….. 7-27.3.1 Program Responsibility and Control ……………………………………………. 7-27.3.2 Notification to and Registration by the Corporation……………………… 7-37.3.3 MSP Agreement ………………………………………………………………………… 7-37.3.3.1 Before Entering Into an Agreement with an MSP ………………… 7-47.3.4 Disclosure of Standards …………………………………………………………….. 7-57.3.5 Member Point of Contact …………………………………………………………… 7-57.3.6 Affiliate Member ……………………………………………………………………….. 7-57.3.7 Use of the Marks ………………………………………………………………………. 7-67.3.8 MSP Identification on a Card ……………………………………………………… 7-67.3.9 Program Materials……………………………………………………………………… 7-67.3.10 Fees ……………………………………………………………………………………….. 7-7Table of Contents©1969–2010 MasterCardMasterCard Rules • 10 December 2010 ix7.3.11 Settlement Account …………………………………………………………………. 7-77.3.12 Transfer of Rights Prohibited ……………………………………………………. 7-77.3.13 Use of Systems and Confidential Information …………………………….. 7-77.3.14 Indemnification ………………………………………………………………………. 7-87.3.15 No Endorsement by the Corporation ………………………………………… 7-87.3.16 Audits …………………………………………………………………………………….. 7-97.3.17 Settlement Failure Obligation …………………………………………………… 7-97.3.18 Data Security ………………………………………………………………………….. 7-97.3.19 Data Storage Entity (DSE) Identification ……………………………………. 7-97.3.19.1 DSE Registration Requirements ………………………………………. 7-107.4 Merchant Acquiring Programs ………………………………………………………….. 7-107.4.1 Merchant Agreement ……………………………………………………………….. 7-107.4.2 Collection of Funds …………………………………………………………………. 7-117.4.3 Access to Documentation ………………………………………………………… 7-117.4.4 Authority to Terminate Merchant Agreement …………………………….. 7-117.5 Card Issuing Programs …………………………………………………………………….. 7-127.5.1 Card Application Approval ………………………………………………………. 7-127.5.2 Cardholder Agreement …………………………………………………………….. 7-127.5.3 Payment of Fees ……………………………………………………………………… 7-127.5.4 Program Receivables ……………………………………………………………….. 7-127.6 MSP Registration ……………………………………………………………………………… 7-127.6.1 Registration Requirements for ISOs and Type II TPPs ………………… 7-127.6.1.1 SDP Program Noncompliance ………………………………………….. 7-147.6.2 Registration Requirements for Type I TPPs ……………………………….. 7-147.6.3 Prohibition from Acting as an MSP or DSE ………………………………… 7-147.6.4 Termination of MSP Agreement ……………………………………………….. 7-157.7 Type I TPP Evaluation Program ……………………………………………………….. 7-157.7.1 Compliance with Type I TPP Evaluation Program Standards ………. 7-157.8 Confidential Information of MSPs ……………………………………………………… 7-15Compliance Zones ………………………………………………………………………………… 7-16Table of Contentsx©1969–2010 MasterCard10 December 2010 • MasterCard RulesChapter 8 Cash Disbursements8.1 Cash Disbursements May Be Provided Only By Members…………………….. 8-18.2 Nondiscrimination …………………………………………………………………………….. 8-18.3 Maximum Cash Disbursement Amounts ……………………………………………… 8-18.4 Discount or Service Charges ………………………………………………………………. 8-28.5 MasterCard Acceptance Mark Must Be Displayed ………………………………… 8-28.6 Other Requirements ………………………………………………………………………….. 8-2Compliance Zones ………………………………………………………………………………….. 8-2Chapter 9 Settlement9.1 Definitions ……………………………………………………………………………………….. 9-19.2 Net Settlement ………………………………………………………………………………….. 9-19.3 Currency Conversion …………………………………………………………………………. 9-29.4 Interchange and Service Fees …………………………………………………………….. 9-29.5 Establishment of Intracountry Interchange and Service Fees …………………. 9-39.5.1 Default Intracountry Fees ………………………………………………………….. 9-39.5.2 Intraregional Fees ……………………………………………………………………… 9-49.5.3 Bilateral Agreement …………………………………………………………………… 9-49.6 Cost Studies ……………………………………………………………………………………… 9-59.6.1 Allocation of Expenses………………………………………………………………. 9-59.6.2 Noncompliance with a Cost Study ……………………………………………… 9-5Compliance Zones ………………………………………………………………………………….. 9-5Chapter 10 Asia/Pacific Region RulesOrganization of this Chapter ………………………………………………………………….. 10-13.6 Provision and Use of Information …………………………………………………….. 10-13.6.1 Obligation of Member to Provide Information …………………………… 10-13.6.1.1 Information to Cardholders ……………………………………………… 10-13.9 Transaction Requirements ………………………………………………………………… 10-2Table of Contents©1969–2010 MasterCardMasterCard Rules • 10 December 2010 xi3.9.1 Chip Transactions and Hybrid Terminals…………………………………… 10-23.11 Limitation of Liability of Cardholders for Unauthorized Use ………………. 10-35.11 Prohibited Practices ……………………………………………………………………….. 10-45.11.3 Minimum/Maximum Transaction Amount Prohibited ……………….. 10-45.13 Discounts or Other Benefits at the Point of Interaction …………………….. 10-56.2 Affinity and Co-Brand Card Programs ……………………………………………….. 10-56.2.5 Multiple Partners …………………………………………………………………….. 10-56.3 Brand Value Transactions and Proprietary Accounts ………………………….. 10-66.3.2 Fees and Reporting Requirements …………………………………………….. 10-69.5 Establishment of Intracountry Interchange and Service Fees ……………….. 10-69.5.3 Bilateral Agreement …………………………………………………………………. 10-6Chapter 10a New Zealand RulesOrganization of this Chapter ………………………………………………………………… 10a-1Definitions …………………………………………………………………………………………. 10a-12.6 Obligation to Issue Cards ……………………………………………………………….. 10a-12.7 Liability for Assigned ICAs and BINs ……………………………………………….. 10a-24.2 General Rules for Use of the Marks ………………………………………………… 10a-24.2.6 Particular Use of a Mark ………………………………………………………… 10a-24.2.6.6 Use on Cards ………………………………………………………………… 10a-25.1 The Merchant Agreement……………………………………………………………….. 10a-25.1.2 Required Terms …………………………………………………………………….. 10a-25.8 Card Acceptance Requirements ………………………………………………………. 10a-35.8.1 Honor All Cards…………………………………………………………………….. 10a-35.8.2 Merchant Acceptance …………………………………………………………….. 10a-35.11 Prohibited Practices ……………………………………………………………………… 10a-35.11.1 Discrimination …………………………………………………………………….. 10a-35.11.2 Charges to Cardholders ………………………………………………………… 10a-49.4 Interchange and Service Fees …………………………………………………………. 10a-49.5 Establishment of Intracountry Interchange and Service Fees ……………… 10a-49.5.1 Default Intracountry Fees ………………………………………………………. 10a-5Table of Contentsxii©1969–2010 MasterCard10 December 2010 • MasterCard Rules9.5.2 Intraregional Fees ………………………………………………………………….. 10a-5Chapter 11 Canada Region RulesOrganization of this Chapter ………………………………………………………………….. 11-13.9 Transaction Requirements ………………………………………………………………… 11-13.9.1 Chip Transactions and Hybrid Terminals…………………………………… 11-13.9.4 Automated Fuel Dispenser Transactions ……………………………………. 11-13.9.9 MasterCard PayPass Transactions ……………………………………………… 11-23.11 Limitation of Liability of Cardholders for Unauthorized Use ………………. 11-25.2 Acquirer Obligations ……………………………………………………………………….. 11-35.2.4 Payments to Merchants ……………………………………………………………. 11-35.13 Discounts or Other Benefits at the Point of Interaction …………………….. 11-3Chapter 11a Canada Region Code of Conduct Related RulesOrganization of this Chapter ………………………………………………………………….. 11-1Definitions …………………………………………………………………………………………… 11-12.6 Obligation to Issue Cards …………………………………………………………………. 11-23.6 Provision and Use of Information …………………………………………………….. 11-23.6.1 Obligation of Member to Provide Information …………………………… 11-23.6.1.2 Information to Merchants ………………………………………………… 11-23.8 Authorization Service ………………………………………………………………………. 11-23.8.1 Selective Authorization ……………………………………………………………. 11-23.14 Accounts on a Card ……………………………………………………………………….. 11-34.2 General Rules for Use of the Marks ………………………………………………….. 11-34.2.6 Particular Use of a Mark ………………………………………………………….. 11-34.2.6.6 Use on Cards ………………………………………………………………….. 11-34.2.13 Use of Other Acceptance Marks on Cards ……………………………….. 11-35.8 Card Acceptance Requirements ………………………………………………………… 11-45.8.1 Honor All Cards………………………………………………………………………. 11-45.11 Prohibited Practices ……………………………………………………………………….. 11-45.11.2 Charges to Cardholders ………………………………………………………….. 11-4Table of Contents©1969–2010 MasterCardMasterCard Rules • 10 December 2010 xiiiChapter 12 Europe Region RulesOrganization of this Chapter ………………………………………………………………….. 12-1Definitions …………………………………………………………………………………………… 12-11.2 Eligibility to be a Member ………………………………………………………………… 12-31.2.1 Principal Member or Affiliate Member ………………………………………. 12-32.3 Area of Use …………………………………………………………………………………….. 12-32.3.1 Extending or Otherwise Modifying the Area of Use …………………… 12-32.3.2 Central Acquiring ……………………………………………………………………. 12-32.3.2.1 Central Acquiring Registration ………………………………………….. 12-32.3.2.2 Central Acquirer Service Requirements ……………………………… 12-42.3.2.3 Intracountry Rules …………………………………………………………… 12-42.3.2.4 Centrally Acquired Merchants ………………………………………….. 12-52.3.2.4.1 Updating of Merchant Details ………………………………….. 12-52.3.2.5 Registration Procedure …………………………………………………….. 12-52.3.2.6 Extension of Registration …………………………………………………. 12-62.3.2.7 Interchange Fee Requirements …………………………………………. 12-62.3.2.8 Settlement of Disputes …………………………………………………….. 12-62.3.2.9 Member Noncompliance …………………………………………………. 12-72.6 Obligation to Issue Cards …………………………………………………………………. 12-73.1 Standards ……………………………………………………………………………………….. 12-73.1.3 Rules Applicable to Intracountry Transactions …………………………… 12-73.1.3.1 Order of Precedence ……………………………………………………….. 12-83.1.4 Communication of Intracountry Fallback Rules………………………….. 12-83.4 Choice of Laws ……………………………………………………………………………….. 12-93.6 Provision and Use of Information …………………………………………………….. 12-93.6.1 Obligation to Provide Information ……………………………………………. 12-93.6.1.1 Information to Cardholders ……………………………………………. 12-103.6.1.2 Information to Merchants ………………………………………………. 12-113.6.5 Data Protection ……………………………………………………………………… 12-123.6.5.1 Processing of Transaction-Related Personal Data ……………… 12-133.6.5.2 Data Subject Notice and Consent ……………………………………. 12-133.6.5.3 Data Subject Access to Personal Data ……………………………… 12-143.6.5.4 Integrity of Personal Data ………………………………………………. 12-143.9 Transaction Requirements ………………………………………………………………. 12-143.9.1 Chip Transactions and Hybrid Terminals…………………………………. 12-14Table of Contentsxiv©1969–2010 MasterCard10 December 2010 • MasterCard Rules3.9.2 CVC 2 Processing for Card-Not-Present Transactions ……………….. 12-153.9.5 Issuer Performance Standards…………………………………………………. 12-163.9.5.1 Issuer Failure Rate (Substandard Performance) ………………… 12-163.9.5.2 Calculation of the Issuer Failure Rate ……………………………… 12-163.9.5.3 Assessments for Substandard Performance ………………………. 12-173.9.7 Euro Migration ………………………………………………………………………. 12-174.1 Right to Use the Marks …………………………………………………………………… 12-184.1.2 Protection and Registration of the Marks …………………………………. 12-185.1 The Merchant Agreement……………………………………………………………….. 12-185.1.2 Required Terms …………………………………………………………………….. 12-185.8 Card Acceptance Requirements ………………………………………………………. 12-185.8.2 Merchant Acceptance …………………………………………………………….. 12-185.8.6 Purchase with Cash Back Transactions ……………………………………. 12-195.11 Prohibited Practices ……………………………………………………………………… 12-215.11.2 Charges to Cardholders ………………………………………………………… 12-215.13 Discounts or Other Benefits at the Point of Interaction …………………… 12-216.2 Affinity and Co-Brand Card Programs ……………………………………………… 12-216.2.5 Multiple Partners …………………………………………………………………… 12-216.3 Co-Residing Applications ……………………………………………………………….. 12-216.3.1 Definitions ……………………………………………………………………………. 12-216.3.2 Basic Requirements ……………………………………………………………….. 12-226.3.3 Notification …………………………………………………………………………… 12-228.3 Maximum Cash Disbursement Amounts ………………………………………….. 12-22Chapter 12a Europe Region Debit-related RulesOrganization of this Chapter ………………………………………………………………… 12a-1Definitions …………………………………………………………………………………………. 12a-12.7 Liability for Assigned ICAs and BINs ……………………………………………….. 12a-24.2 General Rules for Use of the Marks ………………………………………………… 12a-24.2.6 Particular Use of a Mark ………………………………………………………… 12a-24.2.6.6 Use on Cards ………………………………………………………………… 12a-25.8 Card Acceptance Requirements ………………………………………………………. 12a-3Table of Contents©1969–2010 MasterCardMasterCard Rules • 10 December 2010 xv5.8.1 Honor All Cards…………………………………………………………………….. 12a-35.8.2 Merchant Acceptance …………………………………………………………….. 12a-35.8.6 Purchase with Cash Back Transactions ……………………………………. 12a-4Chapter 12b SEPA RulesOrganization of this Chapter ………………………………………………………………… 12b-1Definitions …………………………………………………………………………………………. 12b-12.1 Purpose of License; Eligibility …………………………………………………………. 12b-12.1.1 Single European Payments Area License …………………………………. 12b-13.2 Conduct of Activity ………………………………………………………………………… 12b-23.2.6 Nondiscrimination …………………………………………………………………. 12b-23.9 Transaction Requirements ………………………………………………………………. 12b-33.9.1 Chip Transactions and Hybrid Terminals…………………………………. 12b-34.2 General Rules for Use of the Marks ………………………………………………… 12b-34.2.13 Use of Other Acceptance Marks on Cards ……………………………… 12b-3Chapter 13 Latin America and the Caribbean Region RulesOrganization of this Chapter ………………………………………………………………….. 13-12.6 Obligation to Issue Cards …………………………………………………………………. 13-13.9 Transaction Requirements ………………………………………………………………… 13-13.9.1 Chip Transactions and Hybrid Terminals…………………………………… 13-15.11 Prohibited Practices ……………………………………………………………………….. 13-25.11.3 Minimum/Maximum Transaction Amount Prohibited ……………….. 13-25.13 Discounts or Other Benefits at the Point of Interaction …………………….. 13-36.2 Affinity and Co-Brand Card Programs ……………………………………………….. 13-36.2.5 Multiple Partners …………………………………………………………………….. 13-39.3 Currency Conversion ……………………………………………………………………….. 13-39.5 Establishment of Intracountry Interchange and Service Fees ……………….. 13-4Table of Contentsxvi©1969–2010 MasterCard10 December 2010 • MasterCard RulesChapter 14 South Asia/Middle East/Africa Region RulesOrganization of this Chapter ………………………………………………………………….. 14-13.6 Provision and Use of Information …………………………………………………….. 14-13.6.1 Obligation of Member to Provide Information …………………………… 14-13.6.1.1 Information to Cardholders ……………………………………………… 14-13.9 Transaction Requirements ………………………………………………………………… 14-23.9.1 Chip Transactions and Hybrid Terminals…………………………………… 14-23.11 Limitation of Liability of Cardholders for Unauthorized Use ………………. 14-35.13 Discounts or Other Benefits at the Point of Interaction …………………….. 14-4Chapter 14a South Africa RulesOrganization of this Chapter ………………………………………………………………… 14a-1Definitions …………………………………………………………………………………………. 14a-12.6 Obligation to Issue Cards ……………………………………………………………….. 14a-12.7 Liability for Assigned ICAs and BINs ……………………………………………….. 14a-13.9 Transaction Requirements ………………………………………………………………. 14a-23.9.1 Chip Transactions and Hybrid Terminals…………………………………. 14a-24.2 General Rules for Use of the Marks ………………………………………………… 14a-24.2.6 Particular Use of a Mark ………………………………………………………… 14a-24.2.6.6 Use on Cards ………………………………………………………………… 14a-25.1 The Merchant Agreement……………………………………………………………….. 14a-35.1.2 Required Terms …………………………………………………………………….. 14a-35.8 Card Acceptance Requirements ………………………………………………………. 14a-35.8.1 Honor All Cards…………………………………………………………………….. 14a-35.8.2 Merchant Acceptance ………………………………………………………………….. 14a-3Chapter 14b India RulesOrganization of this Chapter ………………………………………………………………… 14b-1Definitions …………………………………………………………………………………………. 14b-1Table of Contents©1969–2010 MasterCardMasterCard Rules • 10 December 2010 xvii3.9 Transaction Requirements ………………………………………………………………. 14b-13.9.2 Card-Not-Present Transactions ……………………………………………….. 14b-15.8 Card Acceptance Requirements ………………………………………………………. 14b-25.8.6 Purchase With Cash Back Transactions …………………………………… 14b-2Chapter 15 United States Region RulesOrganization of this Chapter ………………………………………………………………….. 15-12.6 Obligation to Issue Cards …………………………………………………………………. 15-12.7 Liability for Assigned ICAs and BINs …………………………………………………. 15-12.7.1 Settlement Liability for Debit Licensees …………………………………….. 15-13.6 Provision and Use of Information …………………………………………………….. 15-23.6.1 Obligation of Member to Provide Information …………………………… 15-23.6.1.1 Information to Cardholders ……………………………………………… 15-23.8 Authorization Service ………………………………………………………………………. 15-33.8.3 Full and Partial Reversals …………………………………………………………. 15-33.8.4 Partial Approvals and Account Balance Responses …………………….. 15-53.9 Transaction Requirements ………………………………………………………………… 15-83.9.3 Refund Transactions ………………………………………………………………… 15-83.9.4 Automated Fuel Dispenser Transactions ……………………………………. 15-83.10 Additional Member Obligations ………………………………………………………. 15-93.10.4 Integrity of Brand and Network ……………………………………………… 15-93.11 Limitation of Liability of Cardholders for Unauthorized Use ………………. 15-95.11 Prohibited Practices ……………………………………………………………………… 15-115.11.3 Minimum/Maximum Transaction Amount Prohibited ……………… 15-115.13 Discounts or Other Benefits at the Point of Interaction …………………… 15-126.2 Affinity and Co-brand Card Programs ……………………………………………… 15-126.2.5 Multiple Partners …………………………………………………………………… 15-128.2 Nondiscrimination …………………………………………………………………………. 15-13Table of Contentsxviii©1969–2010 MasterCard10 December 2010 • MasterCard RulesChapter 15a United States Region Debit-related RulesOrganization of this Chapter ………………………………………………………………… 15a-1Definitions …………………………………………………………………………………………. 15a-12.7 Liability for Assigned ICAs and BINs ……………………………………………….. 15a-12.20 Risk of Loss …………………………………………………………………………………. 15a-24.2 General Rules for Use of the Marks ………………………………………………… 15a-24.2.6 Particular Use of a Mark ………………………………………………………… 15a-24.2.6.6 Use on Cards ………………………………………………………………… 15a-25.1 The Merchant Agreement……………………………………………………………….. 15a-25.1.2 Required Terms …………………………………………………………………….. 15a-25.8 Card Acceptance Requirements ………………………………………………………. 15a-35.8.1 Honor All Cards…………………………………………………………………….. 15a-35.8.2 Merchant Acceptance …………………………………………………………….. 15a-3Chapter 15b United States Region PIN-based Debit TransactionRulesOrganization of this Chapter ………………………………………………………………… 15b-1Definitions …………………………………………………………………………………………. 15b-13.9 Transaction Requirements ………………………………………………………………. 15b-23.9.6 PIN-based Debit Transactions ………………………………………………… 15b-24.2 General Rules for Use of the Marks ………………………………………………… 15b-24.2.6 Particular Use of a Mark ………………………………………………………… 15b-24.2.6.6 Use on Cards ………………………………………………………………… 15b-2Appendix A Geographic ListingA.1 Asia/Pacific Region ………………………………………………………………………….. A-1A.2 Canada Region ………………………………………………………………………………… A-1A.3 Europe Region ………………………………………………………………………………… A-2A.3.1 Single European Payments Area (SEPA) …………………………………….. A-3A.4 Latin America and the Caribbean Region …………………………………………… A-3Table of Contents©1969–2010 MasterCardMasterCard Rules • 10 December 2010 xixA.5 South Asia/Middle East/Africa Region ……………………………………………….. A-4A.6 United States Region ………………………………………………………………………… A-5DefinitionsAccess Device–Bylaws©1969–2010 MasterCardMasterCard Rules • 29 October 2010 Definitions-1DefinitionsThe following terms used in the MasterCard Rules manual have the meanings set forthbelow. NoteAdditional defined terms appear in Chapter 9, “Settlement”; Chapter 10a, “NewZealand Rules”; Chapter 12, “Europe Region Rules”; Chapter 12a, “EuropeRegion Debit-related Rules”; Chapter 12b, “SEPA Rules”; Chapter 14a, “SouthAfrica Rules”; Chapter 14b, “India Rules”; Chapter 15, “United States RegionRules”; Chapter 15a, “United States Region Debit-related Rules”; and Chapter15b, “United States Region PIN-based Debit Transaction Rules.”Access DeviceA means other than a Card by which a Cardholder may access a MasterCard account inaccordance with the Standards. See Card.AcquirerA Member in its capacity as an acquirer of a Transaction from a Merchant.Activity(ies)The undertaking of any act that can be lawfully undertaken only pursuant to License bythe Corporation.Affiliate MemberA financial institution that is eligible and approved to be a Member pursuant to Rule 1.1.3and is Sponsored by a Class A Member.Area of UseThe country or countries in which a Member is licensed to use the Mark(s), and, as a rule,set forth in the License or in an exhibit to the License.Association MemberAn entity that is eligible and approved to be a Member pursuant to Rule 1.1.1 and is aClass A Member.Board, Board of DirectorsThe Board of Directors of MasterCard International Incorporated and MasterCardIncorporated.BylawsThe bylaws of MasterCard International Incorporated.*chg*DefinitionsCard–Data Storage Entity (DSE)Definitions-2©1969–2010 MasterCard29 October 2010 • MasterCard RulesCardA card issued by a Member pursuant to License and in accordance with the Standards thatprovides access to a credit, debit, or prepaid MasterCard account. Unless otherwise statedherein, Standards applicable to a Card are also applicable to an Access Device and aMobile Payment Device.CardholderThe authorized user of a Card or Access Device issued by a Member.Cardholder CommunicationAny communication by or on behalf of an Issuer to a Cardholder or prospectiveCardholder. A Solicitation is one kind of Cardholder Communication.Class A MemberAn Association Member or a Principal Member.ControlAs used herein, Control has such meaning as the Corporation deems appropriate in itssole discretion given the context of the usage of the term and all facts and circumstancesthe Corporation deems appropriate to consider. As a general guideline, Control oftenmeans to have, alone or together with another entity or entities, direct, indirect, legal, orbeneficial possession (by contract or otherwise) of the power to direct the managementand policies of another entity.CorporationMasterCard International Incorporated and its subsidiaries and affiliates. As used herein,Corporation also means the President and Chief Executive Officer of MasterCardInternational Incorporated, or his or her designee, or such officer(s) or other employee(s)responsible for the administration and/or management of a program, service, product,system or other function. Unless otherwise set forth in the Standards, and subject to anyrestriction imposed by law or regulation or by the Board or by the MasterCardIncorporated Certificate of Incorporation or by the MasterCard International IncorporatedCertificate of Incorporation (as each such Certificate of Incorporation may be amendedfrom time to time), each such person is authorized to act on behalf of the Corporation andto so act in his or her sole discretion.Data Storage Entity (DSE)An entity other than a Member, Merchant, Independent Sales Organization (ISO), or ThirdParty Processor (TPP) that stores, transmits, and/or processes MasterCard account data foror on behalf of a Merchant, Sub-merchant, or Member Service Provider.*chg*DefinitionsInterchange System–Licensee©1969–2010 MasterCardMasterCard Rules • 29 October 2010 Definitions 3Interchange SystemThe computer hardware and software operated by and on behalf of the Corporation forthe routing, processing, and settlement of Transactions, including, without limitation, theMasterCard Worldwide Network, the Regional Service Center (RSC), the Regional ClearingManagement System (RCMS), the Global Clearing Management System (GCMS), and theSettlement Account Management (S.A.M.) system.Interregional TransactionA Transaction that occurs at a Merchant located and doing business in a differentMasterCard region from the MasterCard region in which the Card was issued, except asotherwise defined by the Corporation.Intracountry TransactionA Transaction that occurs at a Merchant located and doing business in the same countryas the country in which the Card was issued, except as otherwise defined by theCorporation. A Transaction qualifies as an Intracountry Transaction when it is completedusing a Card that bears the Marks either alone or in combination with the marks ofanother eligible payment scheme, and it is processed as a Transaction, as shown by theCard product identification in the Transaction record, via either the Interchange System ora different network.Intraregional TransactionA Transaction that occurs at a Merchant located and doing business in a different countryfrom the country in which the Card was issued, within the same MasterCard region,except as otherwise defined by the Corporation.IssuerA Member in its capacity as an issuer of a Card or Access Device. For the purpose of thisdefinition, an Issuer also means a Principal Debit Licensee and an Affiliate Debit Licensee.License, LicensedThe contract between the Corporation and a Member granting the Member the right touse one or more of the Mark(s) in accordance with the Standards. To be “Licensed”means to have such a right pursuant to a License.LicenseeA Member or other person authorized in writing by the Corporation to use a Mark.DefinitionsMarks–Member Service Provider (MSP)Definitions-4©1969–2010 MasterCard29 October 2010 • MasterCard RulesMarksThe names, logos, trade names, logotypes, trademarks, service marks, trade designations,and other designations, symbols, and marks, including but not limited to the MasterCardBrand Mark and the MasterCard Word Mark, that MasterCard International Incorporatedand/or its affiliates or subsidiaries own, manage, license, or otherwise control and makeavailable for use by Members and other authorized entities. A “Mark” means any one ofthe Marks.MasterCardMasterCard International Incorporated.MasterCard Acceptance MarkThe MasterCard Acceptance Mark is a combined mark which includes the MasterCardBrand Mark placed on the dark blue acceptance rectangle.MasterCard Brand MarkThe MasterCard Word Mark as a custom lettering legend placed within the MasterCardInterlocking Circles Device. The Corporation is the exclusive owner of the MasterCardBrand Mark.MasterCard Word MarkThe word “MasterCard,” which should be followed by a registered trademark symbol orthe local law equivalent. The Corporation is the exclusive owner of the MasterCard WordMark.Member, MembershipA financial institution or other entity that has been granted membership in and hasbecome a member of the Corporation in accordance with the Standards. “Membership”means membership in the Corporation.Member ReportAny report a Member is required to provide to the Corporation, whether on a one-time orrepeated basis, pertaining to its Membership, Activities, use of any Mark, or any of suchmatters. By way of example and not limitation, the Quarterly Member Report (QMR) is aMember Report.Member Service Provider (MSP)A non-Member or Member that is registered by the Corporation as an MSP in accordancewith the Standards. An MSP is an agent of a Member.DefinitionsMerchant–Program Service(s)©1969–2010 MasterCardMasterCard Rules • 29 October 2010 Definitions 5MerchantA commercial entity or person that, pursuant to a Merchant Agreement, is authorized toaccept Cards and Access Devices when properly presented.Merchant AgreementAn agreement between a Merchant and a Member that sets forth the terms pursuant towhich the Merchant is authorized to accept Cards and Access Devices.Mobile Payment DeviceA Cardholder-controlled mobile phone containing a payment application that is compliantwith the Standards. A Mobile Payment Device is differentiated from an Access Device inthat a Mobile Payment Device uses an integrated keyboard and screen to access a creditor debit MasterCard Account. See Card.Mobile Remote PaymentMobile Remote Payment is a payment functionality that is initiated by an enrolledCardholder from a Cardholder-controlled mobile phone which is registered with theCardholder’s Issuer and used for entry of the Cardholder’s PIN or mobile-specificcredentials.OwnershipAs used herein, ownership has such meaning as the Corporation deems appropriate in itssole discretion given the context of the usage of the term and all facts and circumstancesthe Corporation deems appropriate to consider. As a general guideline, ownership oftenmeans to own indirectly, legally, or beneficially more than fifty percent (50%) of an entity.Payment FacilitatorA Merchant registered by an Acquirer to facilitate Transactions on behalf of Submerchants.Point of Interaction (POI)The location at which a Transaction occurs, as determined by the Corporation.Principal MemberA financial institution that is eligible and approved to be a Member pursuant to Rule 1.1.2and is a Class A Member.ProgramA Member’s Card issuing program, Merchant acquiring program, or both.Program Service(s)Service(s) to support a Member’s Activity as an Issuer or as an Acquirer.*chg**chg*DefinitionsRemote Transaction–TransactionDefinitions-6©1969–2010 MasterCard29 October 2010 • MasterCard RulesRemote TransactionA non-face-to-face Transaction performed partially or wholly by means of electroniccommunication, such as via phone order, the Internet, text messaging, facsimile, or thelike.RulesThe Standards set forth in the MasterCard Rules manual.Solicitation, SolicitAn application, advertisement, promotion, marketing communication, Web site or the likeintended to solicit the enrollment of a person as a Cardholder or as a Merchant. To“Solicit” means to use a Solicitation.Special Issuer ProgramIssuer Activity the Corporation deems may be undertaken only with the express priorconsent of the Corporation. As of the date of the publication of these Rules, SpecialIssuer Programs include Affinity Card, Co-brand Card, Proprietary Account, RemoteTransaction account, secured Card, and prepaid Card Programs.Sponsor, SponsorshipThe relationship described in the Standards between a Class A Member and an AffiliateMember that engages in Activity indirectly through the Class A Member. In such event,the Class A Member is the Sponsor of the Affiliate Member and the Affiliate Member isSponsored by the Class A Member. “Sponsorship” means the Sponsoring of a Member.StandardsThe Amended and Restated Certificate of Incorporation, Bylaws, Rules, and policies, andthe operating regulations and procedures of the Corporation, including but not limited toany manuals, guides or bulletins, as may be amended from time to time.Sub-licenseeA person authorized in writing to use a Mark either by a Licensee in accordance with theStandards or by the Corporation.Sub-merchantA merchant that, pursuant to an agreement with a Payment Facilitator, is authorized toaccept Cards and Access Devices when properly presented.TransactionThe sale of goods or services by a Merchant to a Cardholder pursuant to acceptance of aCard or Access Device by the Merchant.*chg*DefinitionsVolume–Volume©1969–2010 MasterCardMasterCard Rules • 29 October 2010 Definitions 7VolumeThe aggregate financial value of a group of Transactions. “Volume” does not mean thenumber of Transactions.©1969–2010 MasterCardMasterCard Rules • 29 October 2010 1-i1 MembershipThis chapter contains information about Membership in the Corporation.1.1 Types of Members …………………………………………………………………………….. 1-11.1.1 Association Member ………………………………………………………………….. 1-11.1.2 Principal Member ……………………………………………………………………… 1-11.1.3 Affiliate Member ……………………………………………………………………….. 1-11.2 Eligibility to be a Member ………………………………………………………………….. 1-11.2.1 Principal Member or Affiliate Member ………………………………………… 1-11.2.2 Association Member ………………………………………………………………….. 1-21.2.3 Alternative Membership Eligibility Criteria …………………………………… 1-21.3 Application to be a Member ………………………………………………………………. 1-21.4 Interim Participation ………………………………………………………………………….. 1-31.5 Obligations, Rights and Responsibilities ……………………………………………… 1-31.5.1 Obligation to Become a Member ……………………………………………….. 1-31.5.2 Obligation to Participate ……………………………………………………………. 1-31.5.3 Right to Participate ……………………………………………………………………. 1-31.5.4 Membership Not Transferable ……………………………………………………. 1-41.5.5 Member Responsibilities ……………………………………………………………. 1-41.5.6 Enforcement of Payment of Fees and Other Obligations ……………… 1-41.6 Termination of Membership ………………………………………………………………. 1-51.6.1 Voluntary Termination ………………………………………………………………. 1-51.6.2 Termination by the Corporation …………………………………………………. 1-5Compliance Zones ………………………………………………………………………………….. 1-6Membership1.1 Types of Members©1969–2010 MasterCardMasterCard Rules • 29 October 2010 1-11.1 Types of MembersThe Corporation has the following three types of Members: AssociationMember, Principal Member, and Affiliate Member.1.1.1 Association MemberAn Association Member is a Class A Member that participates directly inActivity but does not directly issue or acquire without the express prior writtenconsent of the Corporation. An Association Member may Sponsor one or moreAffiliate Members.1.1.2 Principal MemberA Principal Member is a Class A Member that participates directly in Activity.A Principal Member may Sponsor one or more Affiliate Members.1.1.3 Affiliate MemberAn Affiliate Member participates indirectly in Activity through the Sponsorshipof a Class A Member. An Affiliate Member is not a Class A Member and maynot Sponsor any other Member.1.2 Eligibility to be a MemberThe following are eligible to be a Member of this Corporation.1.2.1 Principal Member or Affiliate MemberEffective on or after 15 July 1993, any entity that is a financial institutionauthorized to engage in financial transactions under the laws or governmentregulations of the country (or any subdivision thereof) in which it is organizedor principally engaged in business may apply to be a Principal Member or anAffiliate Member of the Corporation.For purposes of this section, “financial transactions” means the making ofcommercial or consumer loans, the extension of credit, the effecting oftransactions with payment services cards, or the taking of consumer orcommercial deposits.Membership1.3 Application to be a Member1-2©1969–2010 MasterCard29 October 2010 • MasterCard RulesAny such financial institution must have the requisite right, power, andauthority, corporate and otherwise, to function as a Member of thisCorporation and to engage in Activity, and must have submitted businessplan(s) approved by the Corporation in accordance with Rule 1.5.5. Any suchfinancial institution also must be regulated and supervised by one or moregovernmental authorities or agencies authorized and empowered to establishor enforce rules regarding financial transactions and the financial condition,activities, and practices of entities engaging in financial transactions. Withrespect to any financial institution that does not take deposits, it is a furtherrequirement that financial transactions constitute substantially all of thebusiness conducted by it. Note A variation to this Rule appears in Chapter 12, “Europe Region Rules.”1.2.2 Association MemberAny entity that is Controlled by one or more financial institutions eligible andapproved to be a Member(s) as described in Rule 1.2.1 and that is engaged orproposes to engage in Activity on behalf of or through one or more of thoseMembers may apply to be an Association Member. Any such entity must havethe requisite right, power, and authority, corporate and otherwise, to functionas a Class A Member of this Corporation, and must have submitted businessplan(s) approved by the Corporation in accordance with Rule 1.5.5.1.2.3 Alternative Membership Eligibility CriteriaThe Corporation may adopt, consistent with the promotion of sound practices,alternative Membership eligibility criteria on a regional, country-by-country orother basis for any reason. Any such entity must have submitted businessplan(s) approved by the Corporation in accordance with Rule 1.5.5.1.3 Application to be a MemberAny entity eligible to be a Member may apply to become a Member. Anapplication to become a Member must be made in the form and include all ofthe information then required, and the entity must pay the fee or fees thenrequired. An applicant to be a Member must agree, and by execution andsubmission of an application to be a Member agrees, that it will comply withall applicable provisions of the Certificate of Incorporation and the Standardsof this Corporation as in effect from time to time, and with applicable law.Membership1.4 Interim Participation©1969–2010 MasterCardMasterCard Rules • 29 October 2010 1-31.4 Interim ParticipationPending action on a properly completed and submitted application to be aMember, the Corporation may authorize the applicant to participate in Activityon an interim basis as if the applicant were a Member. The continuation ofsuch interim participation is subject to the subsequent approval or disapprovalof the application to be a Member. As a condition of such conditionalauthorization, the applicant must agree, and by commencement of any Activitythe applicant is deemed to have agreed, to comply during this interim period(and thereafter as applicable) with the Standards and to discontinueimmediately any use of the Marks and Activity if the application isdisapproved. All damages, losses, costs, and liabilities arising directly orindirectly, or consequentially, from or related to any interim participation inActivity by the applicant and from the disapproval of the application to be aMember is solely at the applicant’s risk and expense, and the Corporation hasno responsibility for any such damages, losses, costs, or liabilities.1.5 Obligations, Rights and Responsibilities1.5.1 Obligation to Become a MemberSubject to Rule 1.4, a financial institution or other entity that is eligible to be aMember may not participate in Activity unless and until it becomes a Member.1.5.2 Obligation to ParticipateEach Member must participate as a Class A Member or as an Affiliate Member,or as both.1.5.3 Right to ParticipateEach Member may only use a Mark that the Member is authorized to usepursuant to a License by the Corporation.Membership1.5 Obligations, Rights and Responsibilities1-4©1969–2010 MasterCard29 October 2010 • MasterCard Rules1.5.4 Membership Not TransferableMembership in the Corporation is not transferable or assignable, whether bysale, consolidation, merger, operation of law, or otherwise, without the expresswritten consent of the Corporation, provided however, that in the event thatthe Cards issued by, the Ownership of, or any Activity of a Member areacquired by any person, whether by sale, consolidation, merger, operation oflaw or otherwise, the obligations, but not the rights, of such Member shalltransfer to the person acquiring such Member.1.5.5 Member ResponsibilitiesEach Member must:1. At all times be entirely responsible for and Control all aspects of itsActivities, and the establishment and enforcement of all management andoperating policies applicable to its Activities, in accordance with theStandards;2. Not transfer or assign any part or all of such responsibility and Control orin any way limit its responsibility or Control;3. Ensure that all policies applicable to its Activities conform to the Standardsand comply with applicable laws and regulations;4. Conduct meaningful and ongoing monitoring to ensure compliance with allof the responsibilities set forth in this Rule;5. Maintain a significant economic interest in each of its Activities; and6. Operate Activities at a scale or volume of operations consistent with thebusiness plan(s) approved by the Corporation in connection with theapplication to be a Member or application for a License, or both, as thecase may be.1.5.6 Enforcement of Payment of Fees and Other ObligationsThe Corporation may apply any sum due to the Member from the Corporationtoward the payment of any fee, assessment or other obligation(s) owed to theCorporation by the Member or, in the case of a Class A Member, owed to theCorporation by any Affiliate Member Sponsored by the Class A Member.Membership1.6 Termination of Membership©1969–2010 MasterCardMasterCard Rules • 29 October 2010 1-51.6 Termination of MembershipMembership in the Corporation may terminate in one of two ways: voluntarytermination and termination by the Corporation. The Corporation maycontinue a License of a terminated Member as set forth in Rule 2.13. Rights,liabilities, and obligations of terminated Members are set forth in Rule 2.14.1.6.1 Voluntary TerminationA Member may voluntarily terminate its Membership. A Member thatparticipates in Activity as a Class A Member and also participates in Activity asan Affiliate Member may voluntarily terminate its participation in Activity aseither and continue to participate in Activity as the other.In order to voluntarily terminate as a Member, the Member must give writtennotice addressed to the Secretary of this Corporation by registered or certifiedmail, return receipt requested, or by personal or reputable courier service.The notice must:1. State that the notice is a notice of termination;2. Be received by the Secretary;3. Fix a date on which the termination will be effective, which must be atleast thirty days after the notice is received by the Secretary; and4. Be otherwise in the form as may be required from time to time by theCorporation.1.6.2 Termination by the CorporationA Member may be terminated as a Member by the Corporation. Thetermination is effective upon delivery, or an inability to deliver after areasonable attempt to do so, of written or actual notice by the Corporation tothe Member.The Corporation may, at its sole discretion, effect such termination forthwithand without prior notice if:1. The Member suspends payments within the meaning of Article IV of theUniform Commercial Code in effect at the time in the State of Delaware,regardless of whether, in fact, the Member is subject to the provisionsthereof; orMembershipCompliance Zones1-6©1969–2010 MasterCard29 October 2010 • MasterCard Rules2. The Member takes the required action by vote of its directors,stockholders, members, or other persons with the legal power to do so, orotherwise acts, to cease operations and to wind up the business of themember, such Membership termination to be effective upon the date of thevote or other action; or3. The Member fails or refuses to make payments in the ordinary course ofbusiness or becomes insolvent, makes an assignment for the benefit ofcreditors, or seeks the protection, by the filing of a petition or otherwise, ofany bankruptcy or similar statute governing creditors’ rights generally; or4. The government or the governmental regulatory authority havingjurisdiction over the Member serves a notice of intention to suspend orrevoke, or suspends or revokes, the operations or the charter of theMember; or5. A liquidating agent, conservator, or receiver is appointed for the Member,or the Member is placed in liquidation by any appropriate governmental,regulatory, or judicial authority; or6. The Member’s right to engage in Activity is suspended by the Corporationdue to the Member’s failure to comply with the Corporation’s AML Programor applicable law or regulation, and such suspension continues for twentysix(26) consecutive weeks; or7. A Member fails to engage in Activity for twenty-six (26) consecutive weeks;or8. The Member is no longer Licensed to use any of the Marks.Compliance ZonesThe following table identifies the noncompliance category that the Corporationhas assigned to the Standards described within this chapter. Thesenoncompliance categories are assigned for the purposes of noncomplianceassessments under the compliance framework in Rule 3.1.2.Rule Number Rule Title Category1.1 Types of Members A1.2 Eligibility to be a Member A1.3 Application to be a Member A1.4 Interim Participation A1.5 Obligations, Rights and Responsibilities A1.6 Termination of Membership A©1969–2010 MasterCardMasterCard Rules • 10 December 2010 2-i2 Licensing and Licensed ActivitiesThis chapter contains information about licensing and rights and obligationsrelated to Licensed Activity by Members.2.1 Purpose of License; Eligibility …………………………………………………………….. 2-12.1.1 Single European Payments Area License …………………………………….. 2-12.2 License Application …………………………………………………………………………… 2-12.3 Area of Use ………………………………………………………………………………………. 2-12.3.1 Extending or Otherwise Modifying the Area of Use …………………….. 2-22.3.2 Central Acquiring—Europe Region Only …………………………………….. 2-42.4 Special Conditions of Membership or License ……………………………………… 2-42.5 MasterCard Anti-Money Laundering Program ………………………………………. 2-52.6 Obligation to Issue Cards …………………………………………………………………… 2-62.7 Liability for Assigned ICAs and BINs …………………………………………………… 2-62.7.1 Settlement Liability for Debit Licensees ………………………………………. 2-72.8 Obligations of a Sponsor …………………………………………………………………… 2-72.9 Name Change …………………………………………………………………………………… 2-72.10 Membership Fees and Assessments …………………………………………………… 2-72.11 Sale or Change in Ownership or Control of Member or Portfolio ………… 2-82.12 Suspension and Amendment of Membership or License or Both …………. 2-82.13 Rights, Liabilities, and Obligations of Terminated Members ………………… 2-92.14 Failure of Class A Member to Discharge Obligations ………………………… 2-112.15 System Liquidity…………………………………………………………………………….. 2-122.16 Loss Allocation Among Members ……………………………………………………. 2-132.17 Limitation of Obligation …………………………………………………………………. 2-132.18 Liability for Owned or Controlled Entities ……………………………………….. 2-142.19 Risk of Loss …………………………………………………………………………………… 2-15Compliance Zones ………………………………………………………………………………… 2-16Licensing and Licensed Activities2.1 Purpose of License; Eligibility©1969–2010 MasterCardMasterCard Rules • 10 December 2010 2-12.1 Purpose of License; EligibilityEach Member, as a condition of Membership, must execute one or moreLicenses in such form as is required by the Corporation. Each Member mustassist the Corporation in recording any License granted to the Member ifrequired in the country of license or otherwise upon request of theCorporation. The Corporation may add additional requirements or limitationsor other conditions to a License then in effect. In the event of aninconsistency between a Standard and a provision in a License, the Standardprevails and the License is deemed to be amended so as to be consistent withthe Standard.2.1.1 Single European Payments Area LicenseNote Rules on this topic appear in Chapter 12b, “SEPA Rules.”2.2 License ApplicationAn application for a License must be made in the form and include allinformation then required. An applicant for a License must agree and, byexecution and submission of an application for a License agrees, and by use ofa Mark agrees, to comply with all provisions of the License pertaining to use ofa Mark and with the Standards of this Corporation as may be in effect fromtime to time. A Licensee may not transfer or assign its License, whether bysale, consolidation, merger, operation of law or otherwise, without the expresswritten consent of the Corporation, provided, however, that in the event thatthe Cards issued by, the Ownership of, or any Activity of a Member areacquired by any person, whether by sale, consolidation, merger, operation oflaw or otherwise, the obligations, but not the rights, of such Member shalltransfer to the person acquiring such Member.2.3 Area of UseExcept as otherwise provided in the Standards, each Member may use a Marksolely in the Area of Use in which the Member has been granted a License. Ifthe License does not specify an Area of Use, the License is deemed toauthorize the Member to use the Mark only in the country or countries theCorporation determines to be the Member’s Area of Use.Licensing and Licensed Activities2.3 Area of Use2-2©1969–2010 MasterCard10 December 2010 • MasterCard RulesA License that the Corporation deems to be inconsistent with this Rule isdeemed amended effective as of the granting of the License so as to beconsistent with this Rule.Except as otherwise provided in the Standards, the ICA number under whichCards are issued or acquired must reflect the country, from among thosespecified in the Area of Use of the License, where such Activity is conducted.2.3.1 Extending or Otherwise Modifying the Area of UseA Member must apply to the Corporation for permission to extend orotherwise modify the Area of Use of a License. Such application must bemade in the form and include all information then required. If the applicationis approved, the Corporation will amend the License to reflect the change inthe Area of Use.Notwithstanding the foregoing, a Member is not required to make suchapplication to conduct any of the following Activities, subject to (a) theCorporation’s right to prohibit or restrict or condition any such Activity and (b)compliance by the Member with Standards, laws and regulations applicable toany such Activity:1. Issue Cards outside of the Area of Use, provided that the Member does notuse Solicitations or solicit outside of the Area of Use.2. Solicit and issue Cards to citizens of any country within the Area of Use,wherever such citizens reside. Any Card Solicitation, wherever conducted,must be directed only to residents of countries within the Member’s Area ofUse.3. Issue MasterCard Corporate Card® Cards to employees of an entity onwhose behalf the Cards are issued, wherever such employees reside,provided that the entity is multinational, having a presence and conductingregular business in more than one country, including at least one countryin the Member’s Area of Use.4. Issue payroll or incentive Cards to employees of an entity on whose behalfthe Cards are issued, provided that the entity is multinational, having apresence and conducting regular business in more than one country,including at least one country in the Member’s Area of Use, and:a. The gross dollar volume (GDV) within a country in a calendar yearfrom the Member’s and its Sponsored Affiliate Members total crossborderissuance for all payroll and incentive Card Programs for allcompanies served in that country does not exceed one percent of thatcountry’s MasterCard GDV in that calendar year, orLicensing and Licensed Activities2.3 Area of Use©1969–2010 MasterCardMasterCard Rules • 10 December 2010 2-3b. If the Member has a License to issue Cards in a particular country(Country A) but wishes to issue Cards into Country A from anothercountry in which the Member is also licensed (Country B), theMember’s and its Sponsored Affiliate Members’ total cross-borderissuance from Country B into Country A in a calendar year may notexceed:i. 10 percent of that Member’s and its Sponsored Affiliate Members’total domestic MasterCard GDV in Country A in that calendar year,orii. if greater than the 10 percent described herein, the amount allowedunder the one percent threshold described above.5. Acquire Transactions from Merchants located in a country within the Areaof Use, even if such Transactions arise from mail order, phone order, ecommerce,or recurring payment Transactions that the Merchant effectswith Cardholders in countries outside of the Area of Use.6. Acquire mail order, phone order, e-commerce, or recurring paymentTransactions from Merchants located outside of the Area of Use if suchTransactions solely reflect sales to Cardholders residing within the Area ofUse.7. Acquire airline Transactions in a country outside of the Area of Use, subjectto satisfying all of the following requirements:a. The airline has a meaningful presence in at least one country withinthe Area of Use; andb. The ICA number under which airline Transactions are acquired mustreflect either the country in which the airline ticket office is located ora country within the MasterCard region in which the airline ticket officeis located; andc. The Member authorizes, clears, and settles each “local Transaction” in amanner that does not significantly disadvantage an Issuer in the samecountry in the judgment of the Corporation.8. Acquire e-commerce Transactions from a Merchant located in a countryoutside of the Area of Use, subject to satisfying all of the followingrequirements:a. The ICA number under which e-commerce Transactions are acquiredmust reflect the country in which the Merchant is located;Note A variation to this Rule provision appears in Chapter 12, “Europe Region Rules.”b. The Merchant implements MasterCard® SecureCode™; andLicensing and Licensed Activities2.4 Special Conditions of Membership or License2-4©1969–2010 MasterCard10 December 2010 • MasterCard Rulesc. The Member authorizes, clears, and settles the Transaction through theInterchange System; andd. The Member authorizes, clears, and settles each “local Transaction” in amanner that does not significantly disadvantage an Issuer in the samecountry in the judgment of the Corporation; ande. The Member, the Merchant, the Third Party Processor (if any), and theData Storage Entity (if any) comply with the MasterCard Site DataProtection Program.The Member must apply for and receive permission from the Corporationbefore acquiring e-commerce Transactions under this Rule 2.3.1,paragraph 8.A Merchant’s location generally is deemed to be the address set forth in theMerchant Agreement. The location of a Merchant conducting e-commerce,mail order, phone order, or recurring payment Transactions may bedetermined based in full or in part on where the entity holds a license, paystaxes, or maintains an address for purposes of receiving mail. Anydisagreement between Members regarding a Merchant location may bereferred to the Corporation for final resolution.As used in this Rule, a “local Transaction” means a Transaction by aCardholder residing in a country that takes place at a Merchant located in thesame country.2.3.2 Central Acquiring—Europe Region OnlyNote Rules on this topic appear in Chapter 12, “Europe Region Rules.”2.4 Special Conditions of Membership or LicenseThe Corporation may condition initial or continued Membership or any Licenseor the conduct of any Activity on compliance with special conditions, such asthe establishment of escrow arrangements, the delivery of letters of credit, orother arrangements that the Corporation deems necessary or appropriate.*chg*Licensing and Licensed Activities2.5 MasterCard Anti-Money Laundering Program©1969–2010 MasterCardMasterCard Rules • 10 December 2010 2-5The Corporation has the right at any time to require that a Member enter into asecurity arrangement with the Corporation. If a Member does not enter into asecurity arrangement with the Corporation that is satisfactory to theCorporation, the Corporation has the right at any time to collect from theMember, in addition to any amount otherwise due and payable by the Memberto the Corporation or to other Members, such additional amount from theMember as the Corporation deems appropriate as collateral. The Corporationhas the right to collect any such additional amount by any means available tothe Corporation, including, by way of example and not limitation:1. By taking any funds deposited by any persons from any account that theCorporation is authorized to draw upon for any purpose.2. By taking any funds due to such Member from other Members.3. By taking any funds being paid by such Member to other Members.In each case where the Corporation takes any such collateral, the Corporationhas the right, as it deems necessary or appropriate, to take ownership of suchcollateral (such as by placing funds taken in an account in the Corporation’sname as a secured party) and to apply such collateral as payment toward anyobligations of the Member to the Corporation or otherwise owed by theMember under the Standards.Each Member hereby appoints and authorizes the Corporation to act as theMember’s attorney and agent for any and all purposes in connection with thefiling, recording, or other perfecting of the Corporation’s rights under theStandards. This Rule constitutes a security agreement between each Memberand the Corporation, and vests in the Corporation a security interest in anycollateral collected as provided in these Standards, granted contemporaneouslyin exchange and as a condition for the continuation of the Member’sMembership and Licenses.2.5 MasterCard Anti-Money Laundering ProgramAn application for Membership or License must be accompanied by affirmativeevidence satisfactory to the Corporation that the applicant is in compliancewith the MasterCard Anti-Money Laundering Program (the “AML Program”).Each Member must, at all times, be in compliance with the AML Program.Licensing and Licensed Activities2.6 Obligation to Issue Cards2-6©1969–2010 MasterCard10 December 2010 • MasterCard RulesThe Corporation has exclusive authority to determine at any time whether anapplicant or a Member is in compliance with the AML Program. Eachapplicant to be a Member and each Member must cooperate with any effort bythe Corporation to evaluate such applicant’s or Member’s compliance with theAML Program. The Corporation may condition initial or continuedMembership or License or both upon compliance with special conditions thatthe Corporation deems necessary or appropriate to ensure continuedcompliance with the AML Program by the applicant, Member, and Corporation,as the case may be.2.6 Obligation to Issue CardsEach Class A Member, together with its Sponsored Affiliate Members, musthave issued and outstanding a reasonable number of Cards based on suchcriteria as the Corporation may deem appropriate from time to time. Inaddition to any other action that the Corporation deems appropriate, a Class AMember that does not issue and have outstanding the requisite number ofCards will be assessed an additional 20% of the assessment paid on itsacquiring volume for each year in which the Card-issuing shortfall exists.If an approved application for issuance of a payment card or device indicatesthe applicant’s preference, by way of a checkmark or otherwise, to be issued aCard, then the Issuer must issue a Card.Note Variations to this Rule appear in Chapter 10a, “New Zealand Rules”; Chapter11a, “Canada Region Code of Conduct Related Rules”; Chapter 12, “EuropeRegion Rules”; Chapter 13, “Latin America and the Caribbean Region Rules”;Chapter 14a, “South Africa Rules”; and Chapter 15, “United States RegionRules.”2.7 Liability for Assigned ICAs and BINsEach Class A Member is responsible to the Corporation and to all otherMembers for Transactions arising from the use of the ICA(s)/BIN(s) that theCorporation assigns to the Class A Member.Neither a Class A Member nor any of its Sponsored Affiliate Members may usethe Class A Member’s BIN to issue Cards other than as specified by theCorporation. By way of example and not limitation, a Member may not issuea consumer Program Card using a MasterCard Corporate Card® BIN.*chg*Licensing and Licensed Activities2.8 Obligations of a Sponsor©1969–2010 MasterCardMasterCard Rules • 10 December 2010 2-7Note Additions to this Rule appear in Chapter 10a, “New Zealand Rules”; Chapter12a, “Europe Region Debit-related Rules”; Chapter 14a, “South Africa Rules”;and Chapter 15a, “United States Region Debit-related Rules.”2.7.1 Settlement Liability for Debit LicenseesNote A Rule on this topic appears in Chapter 15, “United States Region Rules.”2.8 Obligations of a SponsorEach Class A Member must advise the Corporation promptly if an AffiliateMember ceases to be Sponsored by the Class A Member or changes its nameor has a transfer of Ownership or Control.2.9 Name ChangeThe Corporation must receive written notice at least sixty (60) calendar daysbefore the effective date of any proposed Member name change. A Memberthat proposes to change its name must promptly undertake necessary orappropriate action to ensure that its Membership and License(s) and Activitiesdisclose the true identity of the Member.2.10 Membership Fees and AssessmentsEach Member is responsible to timely pay to the Corporation all fees, charges,assessments and the like applicable to Membership and Activity as may be ineffect from time to time, including those set forth in the applicable regionalMasterCard Consolidated Billing System manual.Licensing and Licensed Activities2.11 Sale or Change in Ownership or Control of Member or Portfolio2-8©1969–2010 MasterCard10 December 2010 • MasterCard Rules2.11 Sale or Change in Ownership or Control of Memberor PortfolioThe Corporation must receive written notice at least thirty (30) calendar daysbefore the effective date of any proposed transfer or assignment of an Issuer orAcquirer portfolio, or any proposed change of Control of a Member. AMember must promptly provide the Corporation any information requested bythe Corporation relating to such an event or proposed event and theCorporation may:1. Suspend or impose conditions on Membership or any License granted tothe Member or both.2. Amend rights or obligations or both of a Member.3. Terminate the Membership of any Member that:a. transfers or attempts to transfer Control of the Member to an entity thatis not a Member; orb. merges into or is consolidated with an entity that is not a Member; orc. sells all or substantially all of its assets; ord. sells all or substantially all of its Issuer or Acquirer portfolio(s); ore. experiences a change in Control or Ownership; orf. transfers or assigns, or attempts to transfer or assign, its Membership.2.12 Suspension and Amendment of Membership orLicense or BothThe Corporation may, in its sole discretion:1. Suspend the Membership of a Member or any License granted to a Memberor both; or2. Amend the rights or obligations or both of a Member; or3. Amend the rights or obligations or both set forth in a License.Licensing and Licensed Activities2.13 Rights, Liabilities, and Obligations of Terminated Members©1969–2010 MasterCardMasterCard Rules • 10 December 2010 2-9A Member that has been suspended or whose License has been suspendedmust continue to comply with the Standards and must also comply with suchadditional requirements as the Corporation may impose from time to time. Inaddition, if Membership is suspended or terminated for any reason, theCorporation may continue a License of the suspended or terminated Memberfor purposes of the orderly winding up, continuation or transfer of thesuspended or terminated Member’s business, resumption or reinstatement ofMembership, or other purpose. Such continuation of a License is subject tosuch terms as may be required by the Corporation.2.13 Rights, Liabilities, and Obligations of TerminatedMembersEach License granted to a Member is terminated effective at the time of thetermination of the Member’s Membership. All of the following apply withrespect to a terminated Member:1. Except as otherwise set forth in the Standards, a terminated Member has noright to use any Mark or to otherwise engage or participate in any Activity.A terminated Member must immediately cease its use of all Marks and mustensure that such Marks are no longer used by any of the following:a. The Member’s Merchants;b. Any Affiliate Member Sponsored by a terminated Class A Member;c. Member Service Providers of a terminated Class A Member and of anyAffiliate Member Sponsored by a terminated Class A Member;d. Merchants of an Affiliate Member Sponsored by a terminated Class AMember; ore. Any other entity or person acting to provide, directly or indirectly,service related to Activity undertaken pursuant to the authority orpurported authority of the terminated Member.2. A terminated Member is not entitled to any refund of dues, fees,assessments, or other payments and remains liable for, and must promptlypay to this Corporation (a) any and all applicable dues, fees, assessments,or other charges as provided in the Standards and (b) all other charges,debts, liabilities, and other amounts arising or owed in connection with theMember’s Activities, whether arising, due, accrued, or owing before or aftertermination of such Membership.Licensing and Licensed Activities2.13 Rights, Liabilities, and Obligations of Terminated Members2-10©1969–2010 MasterCard10 December 2010 • MasterCard Rules3. The terminated Member must promptly cancel all Cards then outstandingthat were issued by the terminated Member and, if the terminated Memberis a Class A Member, by all of that Member’s Sponsored Affiliate Members.4. The terminated Member must promptly cause all of its Cardholders and, ifthe terminated Member is a Class A Member, the Cardholders of itsSponsored Affiliate Members to be notified of the cancellation of Cards inwriting. Such notice must be in a form and substance satisfactory to theCorporation.5. If a terminated Member does not take an action that this Rule or any otherStandard or that the Corporation otherwise requires, the Corporation maytake any such required action without prior notice to the terminatedMember and on behalf of and at the expense of the Member.6. If a Class A Member that Sponsors one or more Affiliate Membersterminates its Class A Membership, such Class A Member must cause eachof its Sponsored Affiliate Members to take the actions required of aterminated Member under this Rule, unless and to the extent that any suchAffiliate Member become an Affiliate Member Sponsored by a differentClass A Member within a period of time acceptable to the Corporation.7. If an Affiliate Member terminates its Membership or its Sponsorship by aClass A Member, the Sponsoring Class A Member must cause the AffiliateMember to take the actions required of a terminated Member under thisRule. If that Affiliate Member fails to so comply, the Corporation may takeany action that this Rule requires without notice to the Affiliate Member orthe Sponsoring Class A Member on behalf of and at the expense of theSponsoring Class A Member.8. A terminated Member has no right to present records of Transactionseffected after the date of termination to any other Member, except aspermitted by the Standards.9. A terminated Member continues to have the rights and obligations set forthin the Standards and License(s) with respect to its use of the Marks andconduct of Activity until such time as the Corporation determines suchrights or obligations or both cease.10. A terminated Member has a continuing obligation to provide promptly tothe Corporation, on request, Member Reports and any other informationabout Activity.11. A terminated Member must, at the option of the Corporation, immediatelyeither destroy, or take such steps as the Corporation may requireregarding, all confidential and proprietary information of the Corporationin any form previously received as a Member.Licensing and Licensed Activities2.14 Failure of Class A Member to Discharge Obligations©1969–2010 MasterCardMasterCard Rules • 10 December 2010 2-11This Rule does not apply in the event that the Corporation has approved:1. A transfer of Membership of a Principal Member to an Affiliate MemberSponsored by a Class A Member; or2. A transfer of Membership of an Affiliate Member to a Class A Member; or3. A transfer of Sponsorship of an Affiliate Member to a different Class AMember.2.14 Failure of Class A Member to Discharge ObligationsSubject to the limitation set forth in Rule 2.17, if a Class A Member fails todischarge any obligation to any other Member(s) arising from or in connectionwith any Activity that it has conducted as a Member, the Corporation maysatisfy such obligation(s) to the extent such obligation(s) is not otherwisesatisfied. To the extent the Corporation satisfies a Member’s settlementobligation, the satisfaction constitutes an automatic transfer, sale, and absoluteassignment to the Corporation, and not an assignment for security purposes, ofall right, title, and interest in the receivable. Such satisfaction of the obligationalso entitles the Corporation to all records and documents related to thereceivable, including the name and address of each Cardholder obligated tosatisfy any part of the receivable. The Member must promptly deliver all suchrecords and documents to the Corporation or to the Corporation’s designee.Any proceeds received by the Member from any receivable must be held intrust by the Member and paid to the Corporation as soon as practicable.Any satisfaction of any Member obligation by the Corporation may berecovered by the Corporation through an assessment of any one or more ofthe Members.The Corporation may take any action the Corporation deems necessary orappropriate to protect its interest in the receivable and to protect the integrityof the affairs of the Corporation, such as, by way of example and notlimitation, by:1. Rejecting Transaction authorization requests relating to use of theMember’s Cards.2. Establishing a settlement account for monies due to and from the Member.3. Without prior notice to the Member, holding any monies due to theMember from the Corporation and net settlement and apply the monies tothe amounts the Member owes to the Corporation and to other Membersarising from Membership.Licensing and Licensed Activities2.15 System Liquidity2-12©1969–2010 MasterCard10 December 2010 • MasterCard Rules4. Listing some or all of a Member’s Card account numbers on the ElectronicWarning Bulletin file, the international Warning Notice(s), or both, or inother or similar publications.5. Effecting chargebacks on behalf of the Member.6. Overseeing the disposition of unused Card stock and any other mediabearing security-sensitive information, including Card account information.2.15 System LiquidityIf the Corporation requires funds to maintain system liquidity and, as set forthin Rule 2.14, to meet any obligations that a Member or Members have failed todischarge (for purposes of this Rule, “Non-discharged Member Obligations”),the Corporation may collect funds directly from the settlement accounts ofMembers upon reasonable notice to the Members. In such event, the fundswill be collected by the Corporation by:1. Decreasing the gross daily settlement amounts of outgoing volumes ofClass A Members by up to (five) 5 percent of the amount settled on one ormore days; and2. Increasing the gross daily settlement amounts of incoming volumes ofClass A Members by up to (five) 5 percent of the amount settled on one ormore days.This collection may continue as long as deemed necessary or appropriate tosatisfy Non-discharged Member Obligations and to ensure system liquidity oruntil the Corporation deems such collection no longer necessary orappropriate.Collected funds are treated as advance payments on the sums that may berequired from the Class A Members in the allocation among Members of lossrelated to a Non-discharged Member Obligations. If the funds collected from aMember exceed the amount ultimately allocated to it in connection with aNon-discharged Member Obligations, the excess amount will be returned tothe Member with interest. If the funds collected from a Member do not exceedthe amount allocated to it, the Member will pay any shortage to theCorporation with interest. Any interest payment by or to the Corporation willbe based on the average effective Federal Reserve Fund’s Earning Credit Rate(or if such rate is not published, a rate that the Corporation designates) duringthe time between the incidence of the Member funding and the finalallocation.Licensing and Licensed Activities2.16 Loss Allocation Among Members©1969–2010 MasterCardMasterCard Rules • 10 December 2010 2-132.16 Loss Allocation Among MembersAny loss that the Corporation incurs, or for which the Corporation mayotherwise be responsible due to the failure of a Member, whether or notintentional, to perform any of its Membership obligations, may be allocatedamong the Members by the Corporation in such manner and at such time(s) asthe Corporation determines to be appropriate.2.17 Limitation of ObligationExcept as otherwise set forth in the Standards, the Corporation has noobligation with respect to the failure of a Class A Member, for any reason, todischarge any obligation arising out of or in connection with Membership orany License or Activity, including, without limitation, any one or more of thefollowing obligations:1. An obligation arising from a Transaction in which the Member, takentogether with any of its sponsored Affiliate Members, acts as both theIssuer and the Acquirer.2. An obligation arising from a Transaction in which the Issuer and Acquirerare related parties or are under common Control by one or more parents,holding companies, or other entities.3. Any obligation arising, or then existing, with respect to a Transactionsettled outside of the Corporation’s settlement system, if the Principal orAssociation Member has failed with respect to its settlement obligation, andthe Corporation has not received actual written notice of the failure fromor on behalf of the intended settlement recipient by midnight of the localbusiness day following such failure. As used herein, Transactions settledoutside of the Corporation’s settlement system include, without limitation,Transactions settled via:a. A processor or any other entity or person net settling between two ormore Principal Members or Association Members;b. Indirect or consolidated settlement arrangements when the Corporationis not directly settling with a Principal Member or Association Member;c. Bilateral or other local settlement arrangements including those clearedvia the Corporation’s Interchange System; andd. Any other arrangement that the Corporation deems to be an alternatearrangement.4. Any obligation arising, or then existing, with respect to a cross-borderTransaction, if the Principal Member or Association Member has failed tocomply with the Standards.Licensing and Licensed Activities2.18 Liability for Owned or Controlled Entities2-14©1969–2010 MasterCard10 December 2010 • MasterCard Rules5. An obligation of its Affiliate Member.6. Any obligation of a Principal Member or Association Member to any of itsAffiliate Members.2.18 Liability for Owned or Controlled EntitiesEach Member (referred to for purposes of this Rule as a “ResponsibleMember”) shall irrevocably and unconditionally guarantee, as a primary obligorand not merely as a surety, to the Corporation and all other Members, theprompt payment and performance of the obligations (the “GuaranteedObligations”) of each of the Responsible Member’s affiliated entities arisingunder the Standards (as the term “Standards” is defined in the Rules, theMaestro Global Rules, and the Cirrus Worldwide Operating Rules, respectively)and from each such affiliated entity’s MasterCard, Maestro, and Cirrus Activitiesand use of any of the Marks (as defined in the Rules) and Service Marks (asdefined in the Maestro Global Rules and the Cirrus Worldwide OperatingRules).For purposes of this Rule, a Responsible Member’s affiliated entity is defined asfollows:1. A Member that is Owned or Controlled by the Responsible Member or isowned or controlled by the Responsible Member and another Member orMembers; or2. A Member that, with the Responsible Member, is under commonOwnership by, or Control of, another entity; or3. A Member that Owns or Controls the Responsible Member or sharesOwnership or Control of the Responsible Member with another Member orMembers.The obligations of each Responsible Member under this Rule shall becontinuing, absolute, and unconditional and shall not be discharged orimpaired or otherwise affected by any act or omission (including any renewal,extension, amendment, waiver or unenforceability of any of the GuaranteedObligations) that may vary the risk of such Responsible Member or otherwiseoperate as a discharge of the obligations of such Responsible Member as amatter of law or equity, and all defenses of the Responsible Member withrespect thereto are waived to the fullest extent permitted by applicable law.The Responsible Member’s liability to the Corporation and all other Members isa primary obligation, while the Corporation’s liability, if any, to anotherMember is secondary, in that it only arises if a Responsible Member is unableto pay its Guaranteed Obligations in full. Any assessments imposed on aMember for liability under this Rule may be collected by the Corporation, at itsoption, from the Member’s settlement account or by any other means available.Licensing and Licensed Activities2.19 Risk of Loss©1969–2010 MasterCardMasterCard Rules • 10 December 2010 2-15A Responsible Member may not be exempted from this Rule except uponwritten notice by the General Counsel of the Corporation.2.19 Risk of LossEach Member bears all risk of loss, and the Corporation bears no risk of losswith respect to all amounts owed by the Member under the Standards exceptto the extent any such amount is received by the Corporation, free and clear.Each Member remains fully responsible for fulfillment of, and must take allactions necessary to fulfill, all of its obligations under the Standards, regardlessof whether the Member designates a third party to perform all or any part ofsuch obligations on the Member’s behalf. The fact that the Member has paidany portion of the amount owed to such third party designee does notdischarge the Member’s obligations to the Corporation.The Corporation may draw on the Member’s funds to fulfill any of theMember’s obligations under the Standards, regardless of whether those fundsare held or Controlled by the Member or by any third party designee, to thesame extent the Corporation is entitled to draw on funds from any settlementaccount or funds of the Member under the Standards, and regardless ofwhether those funds are commingled with any other funds. If the Corporationdraws on the Member’s funds, the Corporation is not required to reimburse theMember or any third party (whether a third party designee of the Member oranother Member) for funds drawn which are owned by any of them orotherwise subject to any of their rights. The Member and any third party(whether a third party designee of the Member or another Member) bear allrisk and liability related to the funds drawn and jointly and severally indemnifyand hold the Corporation harmless from all liability and claims arising fromany such draw of funds. Each Member bears all risk of loss, and theCorporation bears no risk of loss with respect to all amounts owed by theCorporation to the Member under the Standards once the payment is receivedby the Member or a third party designee of the Member and regardless ofwhether or how such Transactions are cleared and settled. Each Member mustnotify the Corporation promptly in writing if any third party designeecommingles funds received for or from the Member in connection with theMember’s Transactions with any other funds.Each Member must notify the Corporation promptly in writing of the details ofany failure of the Member or any third party designee of the Member to meetany of their obligations with respect to payment of funds owed under theStandards.Licensing and Licensed ActivitiesCompliance Zones2-16©1969–2010 MasterCard10 December 2010 • MasterCard RulesIf a Member’s third party designee advances funds on behalf of the Member topay the Corporation or any other party entitled to receive those funds underthe Standards, then such payment is deemed to be a payment by the Member,and the Member and the third party designee of the Member jointly andseverally bear all of the risks of loss and must jointly and severally indemnifyand hold the Corporation harmless from any and all liability and claims arisingfrom any such payment.The Member must:1. Obtain the prior written agreement of any third party designee of theMember that may be given access to any funds owed by or to the Memberpursuant to the Standards; and2. Guarantee any such third party designee’s compliance with all itsobligations to the Corporation under this Rule.Note An addition to this Rule appears in Chapter 15, “United States Region Rules.”Compliance ZonesThe following table identifies the noncompliance category that the Corporationhas assigned to the Standards described within this chapter. Thesenoncompliance categories are assigned for the purposes of noncomplianceassessments under the compliance framework in Rule 3.1.2.Rule Number Rule Title Category2.1 Purpose of License; Eligibility A2.2 License Application A2.3 Area of Use A2.4 Special Conditions of Membership or License A2.5 MasterCard Anti-Money Laundering Program A2.6 Obligation to Issue Cards A2.7 Liability for Assigned ICAs and BINs A2.8 Obligations of a Sponsor C2.9 Name Change C2.10 Membership Fees and Assessments A2.11 Sale or Change in Ownership or Control of Member or Portfolio ALicensing and Licensed ActivitiesCompliance Zones©1969–2010 MasterCardMasterCard Rules • 10 December 2010 2-17Rule Number Rule Title Category2.12 Suspension and Amendment of Membership or License or Both A2.13 Rights, Liabilities, and Obligations of Terminated Members A2.14 Failure of Class A Member to Discharge Obligations A2.15 System Liquidity A2.16 Loss Allocation Among Members A2.17 Limitation of Obligation A2.18 Liability for Owned or Controlled Entities A2.19 Risk of Loss A©1969–2010 MasterCardMasterCard Rules • 10 December 2010 3-i3 Member ObligationsThis chapter contains information about Membership obligations.3.1 Standards …………………………………………………………………………………………. 3-13.1.1 Variances …………………………………………………………………………………. 3-13.1.2 Failure to Comply with a Standard ……………………………………………… 3-23.1.2.1 Noncompliance Categories ………………………………………………… 3-23.1.2.1.1 Category A—Payment System Integrity ………………………. 3-23.1.2.1.2 Category B—Visible to Customers ……………………………… 3-33.1.2.1.3 Category C—Efficiency and Operational Performance …. 3-33.1.2.2 Noncompliance Assessments ……………………………………………… 3-33.1.2.3 Certification ……………………………………………………………………… 3-53.1.2.4 Review Process ………………………………………………………………… 3-53.1.2.5 Resolution of Review Request ……………………………………………. 3-53.1.3 Rules Applicable to Intracountry Transactions …………………………….. 3-53.2 Conduct of Activity ……………………………………………………………………………. 3-53.2.1 Conflict with Law ……………………………………………………………………… 3-63.2.2 Obligations of a Sponsor …………………………………………………………… 3-63.2.3 Affiliate Members ……………………………………………………………………… 3-63.2.4 Materially Adverse Financial Condition or Discrepancy ………………… 3-73.2.5 Compliance ………………………………………………………………………………. 3-73.2.6 Nondiscrimination—Europe Region Only …………………………………… 3-73.3 Indemnity and Limitation of Liability ………………………………………………….. 3-83.4 Choice of Laws ……………………………………………………………………………….. 3-103.5 Examination and Audit…………………………………………………………………….. 3-103.6 Provision and Use of Information …………………………………………………….. 3-123.6.1 Obligation of Member to Provide Information …………………………… 3-123.6.1.1 Information to Cardholders ……………………………………………… 3-123.6.1.2 Information to Merchants ………………………………………………… 3-123.6.1.3 Transaction Currency Information ……………………………………. 3-133.6.2 Confidential Information of Members ……………………………………….. 3-133.6.3 Use of Corporation Information by a Member …………………………… 3-143.6.4 Confidential Information of the Corporation and the Corporation’sAffiliates …………………………………………………………………………………………. 3-153.6.5 Data Protection—Europe Region Only ……………………………………… 3-15Member Obligations3-ii©1969–2010 MasterCard10 December 2010 • MasterCard Rules3.7 Quarterly Member Report ………………………………………………………………… 3-153.7.1 Report Not Received ……………………………………………………………….. 3-163.7.2 Erroneous or Incomplete Report ………………………………………………. 3-163.7.3 Overpayment Claim ………………………………………………………………… 3-173.8 Authorization Service ………………………………………………………………………. 3-173.8.1 Selective Authorization ……………………………………………………………. 3-183.8.2 Authorization Routing ……………………………………………………………… 3-183.8.3 Full and Partial Reversals …………………………………………………………. 3-183.8.4 Full Approvals and Account Balance Responses ………………………… 3-183.9 Transaction Requirements ………………………………………………………………… 3-193.9.1 Chip Transactions and Hybrid Terminals…………………………………… 3-203.9.2 Card-Not-Present Transactions …………………………………………………. 3-213.9.3 Refund Transactions ………………………………………………………………… 3-213.9.4 Automated Fuel Dispenser Transactions ……………………………………. 3-213.9.5 Issuer Performance Standards…………………………………………………… 3-213.9.6 PIN-based Debit Transactions ………………………………………………….. 3-213.9.7 Euro Migration ………………………………………………………………………… 3-213.9.8 Chargebacks for Reissued Cards ………………………………………………. 3-223.9.9 MasterCard PayPass Transactions ……………………………………………… 3-223.10 Additional Member Obligations ………………………………………………………. 3-223.10.1 Safeguard Card Account and Transaction Information ………………. 3-223.10.2 Satisfaction of Minimum Member Obligations ………………………….. 3-223.10.3 Satisfaction of Minimum Financial Requirements ……………………… 3-223.10.4 Integrity of Brand and Network ……………………………………………… 3-233.10.5 Fees, Expenses and Other Payment Obligations ………………………. 3-233.10.5.1 Taxes and Other Charges ………………………………………………. 3-243.11 Limitation of Liability of Cardholders for Unauthorized Use ………………. 3-243.12 Pay-Per-Call Service ……………………………………………………………………….. 3-253.13 Encashment of MasterCard Travelers Cheques …………………………………. 3-253.14 Accounts on a Card ……………………………………………………………………….. 3-25Compliance Zones ………………………………………………………………………………… 3-25Member Obligations3.1 Standards©1969–2010 MasterCardMasterCard Rules • 10 December 2010 3-13.1 StandardsFrom time to time, the Corporation promulgates Standards governing theconduct of Members and Activities. The Corporation has the sole right in itssole discretion to interpret and enforce the Standards. The Corporation has theright, but not the obligation, to resolve any dispute between or amongMembers including, but not limited to, any dispute involving the Corporation,the Standards, or the Members’ respective Activities, and any such resolutionby the Corporation is final and not subject to appeal or other reviews. Inresolving disputes between or among Members, or in applying its Standards toMembers, the Corporation may deviate from any process in the Standards orthat the Corporation otherwise applies, and may implement an alternativeprocess, if an event, including, without limitation, an account data compromiseevent, is, in the sole judgment of the Corporation, of sufficient scope,complexity and/or magnitude to warrant such deviation. The Corporation willexercise its discretion to deviate from its Standards only in circumstances theCorporation determines to be extraordinary. Any decision to alter or suspendthe application of any process(es) will not be subject to appeal, review orother challenge. The Corporation reserves the right to limit, suspend orterminate Membership or Membership privileges of any Member that does notcomply with any Standard or with any decision of the Corporation with regardto the interpretation and enforcement of any Standard, or that in any respectviolates any Standard or applicable law.3.1.1 VariancesA variance is the consent by the Corporation for a Member to act other than inaccordance with a Standard. Only a Member may request a variance. Anysuch request must specify the Rule(s) or other Standard(s) for which a varianceis sought. The request must be submitted to the Corporation in writing,together with a statement of the reason for the request.If the Member claims to be prevented from fully complying with a Standardbecause of law or regulation, the Member must provide a copy of the law orregulation and if such law or regulation is in a language other than English, acomplete certified English translation. As a condition of granting a variance forthat reason, the Corporation may require the Member to undertake some otherform of permissible Activity.The Corporation may assess a fee to consider and act on a variance request.*chg**chg*Member Obligations3.1 Standards3-2©1969–2010 MasterCard10 December 2010 • MasterCard Rules3.1.2 Failure to Comply with a StandardFailure to comply with any Standard(s) adversely affects the Corporation andits Members and undermines the integrity of the MasterCard system.Accordingly, a Member that fails to comply with any Standard is subject toassessments (“noncompliance assessments”) as set forth in the Standards. Inlieu of or in addition to the imposition of a noncompliance assessment, theCorporation, in its sole discretion, may require a Member to take such actionand the Corporation itself may take such action as the Corporation deemsnecessary or appropriate to ensure compliance with the Standards andsafeguard the integrity of the MasterCard system. In the exercise of suchdiscretion, the Corporation may consider the nature, willfulness, number andfrequency of occurrences and possible consequences resulting from a failure tocomply with any Standard(s). The Corporation may provide notice and limitedtime to cure such noncompliance before imposing a noncomplianceassessment.3.1.2.1 Noncompliance CategoriesFrom time to time, the Corporation establishes programs that address instancesof noncompliance with particular Standards, such as the Standards pertainingto account data compromise events set forth in section 10.2 of the SecurityRules and Procedures manual. With respect to noncompliance with a Standardnot addressed in such a program, the Corporation has implemented acompliance framework designed to group noncompliance with the Standardsinto three (3) categories. Every instance of noncompliance not addressed in aprogram established by the Corporation will fall within at least one of thesecategories.3.1.2.1.1 Category A—Payment System IntegrityCategory A noncompliance affects payment system integrity. The Corporationhas the authority to impose monetary noncompliance assessments for CategoryA noncompliance with the Standards. “Payment system integrity” violationsinclude, but are not limited to, noncompliance involving Membership andLicense requirements, Merchant signing and monitoring requirements, orprotection of Card, account, or Transaction information.*chg**chg**chg*Member Obligations3.1 Standards©1969–2010 MasterCardMasterCard Rules • 10 December 2010 3-33.1.2.1.2 Category B—Visible to CustomersCategory B noncompliance addresses conduct that is visible to customers. TheCorporation has the authority to impose monetary noncompliance assessmentsfor Category B noncompliance or, in the alternative, may provide notice and alimited time to cure such noncompliance before imposing monetaryassessments. “Visible to customers” violations include, but are not limited to,noncompliance involving the use of the Marks, identification of the Merchantat the Point of Interaction, the setting of minimum and maximum Transactionamounts, and the payment of Merchants and Sub-merchants for Transactions.3.1.2.1.3 Category C—Efficiency and Operational PerformanceCategory C noncompliance addresses efficiency and operational performance.The Corporation has the authority to impose monetary noncomplianceassessments for Category C noncompliance or, in the alternative, may providenotice and a limited time to cure such noncompliance before imposingmonetary assessments. “Efficiency and operational performance” violationsinclude, but are not limited to, noncompliance involving presentment ofTransactions within the required time frame, supplying Merchants withmaterials required for Transaction processing, and the obligation to provide theCorporation with requested information.3.1.2.2 Noncompliance AssessmentsThe following schedule pertains to any Standard that does not have anestablished compliance program. The Corporation may deviate from thisschedule at any time.NoncomplianceCategory Assessment Type Assessment DescriptionA Per Violation First violation: up to USD 25,000Second violation within 12 months: up to USD 50,000Third violation within 12 months: up to USD 75,000Fourth and subsequent violations within 12 months:Up to USD 100,000 per violationVariable Occurrence(by device or Transaction)Up to USD 2,500 per occurrence for the first 30 daysUp to USD 5,000 per occurrence for days 31–60Up to USD 10,000 per occurrence for days 61–90Up to USD 20,000 per occurrence for subsequentviolations*chg**chg*Member Obligations3.1 Standards3-4©1969–2010 MasterCard10 December 2010 • MasterCard RulesNoncomplianceCategory Assessment Type Assessment DescriptionVariable Occurrence(by number of Cards)Up to USD 0.50 per cardMinimum USD 1,000 per month per card baseNo maximum per month per card baseNo maximum per month per Card base or per all CardbasesB Per Violation First violation: up to USD 20,000Second violation within 12 months: up to USD 30,000Third violation within 12 months: up to USD 60,000Fourth and subsequent violations within 12 months:Up to USD 100,000 per violationVariable Occurrence(by device or Transaction)Up to USD 1,000 per occurrence for the first 30 daysUp to USD 2,000 per occurrence for days 31–60Up to USD 4,000 per occurrence for days 61–90Up to USD 8,000 per occurrence for subsequentviolationsVariable Occurrence(by number of Cards)Up to USD 0.30 per CardMinimum USD 1,000 per month per Card baseMaximum USD 20,000 per month per Card baseMaximum USD 40,000 per month per all Card basesC Per Violation First violation: up to USD 15,000Second violation within 12 months: up to USD 25,000Third violation within 12 months: up to USD 50,000Fourth and subsequent violations within 12 months:Up to USD 75,000 per violationVariable Occurrence(by device or Transaction)Up to USD 1,000 per occurrence for the first 30 daysUp to USD 2,000 per occurrence for days 31–60Up to USD 4,000 per occurrence for days 61–90Up to USD 8,000 per occurrence for subsequentviolationsVariable Occurrence(by number of Cards)Up to USD 0.15 per cardMinimum USD 1,000 per month per Card baseMaximum USD 10,000 per month per Card baseMaximum USD 20,000 per month per all Card basesIn the above table all days refer to calendar days and violations of a Standardare tracked on a rolling 12-month basis.Member Obligations3.2 Conduct of Activity©1969–2010 MasterCardMasterCard Rules • 10 December 2010 3-53.1.2.3 CertificationA senior executive officer of each Class A Member must, if requested by theCorporation, promptly certify in writing to the Corporation the status ofcompliance or noncompliance with any Standard by the Member or by any ofsuch Member’s Sponsored Affiliate Members.3.1.2.4 Review ProcessA Member may request that the Secretary of this Corporation review anassessment imposed by the Corporation for noncompliance with a Standard.Such a request must be submitted in writing and signed by the Member’sprincipal contact. The request must be postmarked no later than 30 calendardays after the date of the disputed assessment.The Corporation will assess a USD 500 fee for each request for review of anoncompliance assessment. The fee will be refunded only if the assessment isrescinded in full.3.1.2.5 Resolution of Review RequestWhen a Member requests review of an assessment for noncompliance with aStandard, the Secretary of this Corporation may take such action as he or shedeems necessary or appropriate or may elect not to act. The Secretary maydelegate authority to act or not to act with respect to any particular matter ortype of matter. If the Secretary or his or her designee elects to conduct furtherinquiry into the matter, each Member must cooperate promptly and fully. Ifthe Secretary or his or her designee makes a recommendation of action toresolve the matter, such recommendation is final and not subject to furtherreview or other action.3.1.3 Rules Applicable to Intracountry TransactionsNote A Rule on this topic appears in Chapter 12, “Europe Region Rules.”3.2 Conduct of ActivityEach Member at all times must conduct Activity in compliance with theStandards and with all applicable laws and regulations. Each Member mustconduct all Activity and otherwise operate in a manner that is financially soundand so as to avoid risk to the Corporation and to other Members.Member Obligations3.2 Conduct of Activity3-6©1969–2010 MasterCard10 December 2010 • MasterCard Rules3.2.1 Conflict with LawA Member is not required to undertake any act that is unambiguouslyprohibited by applicable law or regulation.3.2.2 Obligations of a SponsorEach Class A Member that Sponsors one or more Affiliate Members must causeeach such Affiliate Member to comply with all Standards applicable to theActivity of that Affiliate Member. A Class A Member is liable to theCorporation and to all other Members for all Activities of any Affiliate MemberSponsored by the Class A Member and for any failure by such SponsoredAffiliate Member to comply with a Standard or with applicable law orregulation.If an Affiliate Member Sponsored by a Class A Member ceases to be soSponsored by that Class A Member, such Class A Member nonetheless isobligated, pursuant to and in accordance with the Standards, to acquire fromother Members the records of Transactions arising from the use of Cards issuedby that formerly Sponsored Affiliate Member and whether such Transactionsarise before or after the cessation of the Sponsorship.3.2.3 Affiliate MembersExcept to the extent any liability or obligation arising under a Standard hasbeen satisfied by a Class A Member, each Affiliate Member is responsible forthe liabilities and obligations arising out of, or in connection with, its Activities,regardless of any:1. Action taken by such Affiliate Member to satisfy such liability or obligationwith, through or by a Class A Member that Sponsors or Sponsored suchAffiliate Member, or2. Agreement between any Class A Member and such Affiliate Member.In accordance with the Standards and in compliance with applicable laws andregulations, each Class A Member will have access to and may use orotherwise process its Sponsored Affiliate Members’ confidential informationand Confidential Transaction Data (as defined in Rule 3.6.2) in connection withauthorization, settlement, clearing, fraud reporting, chargebacks, billing, andother related activities.Member Obligations3.2 Conduct of Activity©1969–2010 MasterCardMasterCard Rules • 10 December 2010 3-73.2.4 Materially Adverse Financial Condition or DiscrepancyA Member must promptly report to the Corporation any materially adversefinancial condition or discrepancy or suspected materially adverse financial ordiscrepancy relating to the Member or, in the case of a Class A Member, anyAffiliate Member Sponsored by the Class A Member. The Member must referor, if applicable, cause the Affiliate Member to refer, such condition(s) ordiscrepancy(ies) to independent certified public accountants or another personor firm satisfactory to the Corporation for evaluation and recommendation asto remedial action, and promptly provide the Corporation a copy of suchevaluation and recommendation after receipt thereof.3.2.5 ComplianceFrom time to time, the Corporation may develop means and apply criteria toevaluate a Member’s compliance with Rule 3.2. Each Member must fullycooperate with any effort by the Corporation and the Corporation’srepresentatives to evaluate a Member’s compliance with Rule 3.2.In the event that the Corporation determines that a Member is not complyingor may not on an ongoing basis comply with the requirements of Rule 3.2, theCorporation may:1. Impose special terms upon the Member as the Corporation deemsnecessary or appropriate until each condition or discrepancy is resolved tothe Corporation’s satisfaction so as to enable the Member to be and toremain in full compliance with Rule 3.2, or2. Require the Member to withdraw from Membership.3.2.6 Nondiscrimination—Europe Region OnlyNote A Rule on this topic appears in Chapter 12b, “SEPA Rules.”Member Obligations3.3 Indemnity and Limitation of Liability3-8©1969–2010 MasterCard10 December 2010 • MasterCard Rules3.3 Indemnity and Limitation of LiabilityEach Member (each, for the purposes of this Rule, an “Indemnifying Member”)must protect, indemnify, and hold harmless the Corporation and theCorporation’s parent and subsidiaries and affiliated entities, and each of thedirectors, officers, employees and agents of the Corporation and theCorporation’s parent and subsidiaries and affiliated entities from any actual orthreatened claim, demand, obligation, loss, cost, liability and/or expense(including, without limitation, actual attorneys’ fees, costs of investigation, anddisbursements) resulting from and/or arising in connection with, any act oromission of the Indemnifying Member, its subsidiaries, or any personassociated with the Indemnifying Member or its subsidiaries (including,without limitation, such Indemnifying Member’s directors, officers, employeesand agents, all direct and indirect parents, subsidiaries, and affiliates of theIndemnifying Member, the Indemnifying Member’s customers in connectionwith issuing and/or acquiring Activity and/or other business, and theIndemnifying Member’s suppliers, including, without limitation, anyprocessors, Member Service Providers (MSPs), and other persons acting for, orin connection with the Indemnifying Member or a Merchant for which theIndemnifying Member acquires Transactions, or any such Merchant’semployees, representatives, agents suppliers, customers, including any DataStorage Entity (DSE)) with respect to, or relating to:1. Any programs and/or Activities of the Indemnifying Member;2. Any programs and/or activities of any person associated with theIndemnifying Member and/or its subsidiaries;3. The compliance or non-compliance with the Standards by theIndemnifying Member;4. The compliance or non-compliance with the Standards by any personassociated with the Indemnifying Member and its subsidiaries;5. Any other activity of the Indemnifying Member;6. Direct or indirect access to and/or use of the Interchange System (it beingunderstood that the Corporation does not represent or warrant that theInterchange System or any part thereof is or will be defect-free or errorfreeand that each Member chooses to access and use the InterchangeSystem at the Member’s sole risk and at no risk to the Corporation);7. Any other activity of any person associated with the Indemnifying Member,its subsidiaries, or both that used and/or otherwise involved any of theMarks or other assets;8. Any failure of another Member to perform as required by the Standards orapplicable law; or9. The Corporation’s interpretation, enforcement, or failure to enforce anyStandard(s).Member Obligations3.3 Indemnity and Limitation of Liability©1969–2010 MasterCardMasterCard Rules • 10 December 2010 3-9The Corporation does not represent or warrant that the Interchange System orany other system, process or activity administered, operated, controlled orprovided by or on behalf of the Corporation (collectively, for purposes of thisRule, the “Systems”) is free of defect and/or mistake and, unless otherwisespecifically stated in the Standards or in a writing executed by and betweenthe Corporation and a Member, the Systems are provided on an “as-is” basisand without any express or implied warranty of any type, including, but notlimited to, the implied warranties of merchantability and fitness for a particularpurpose or non-infringement of third party intellectual property rights. IN NOEVENT WILL THE CORPORATION BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIALOR CONSEQUENTIAL DAMAGES, OR DAMAGES FOR LOSS OF PROFITS, OR ANYOTHER COST OR EXPENSE INCURRED BY A MEMBER OR ANY THIRD PARTY ARISINGFROM OR RELATED TO USE OR RECEIPT OF THE SYSTEMS, WHETHER IN AN ACTIONIN CONTRACT OR IN TORT, AND EVEN IF THE MEMBER OR ANY THIRD PARTY HASBEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. EACH MEMBER ASSUMESTHE ENTIRE RISK OF USE OR RECEIPT OF THE SYSTEMS.Only in the event the limitation of liability set forth in the immediatelypreceding paragraph is deemed by a court of competent jurisdiction to becontrary to applicable law, the total liability, in the aggregate, of theCorporation to a Member and anyone claiming by or through the Member, forany and all claims, losses, costs or damages, including attorneys’ fees and costsand expert-witness fees and costs of any nature whatsoever or claims expensesresulting from or in any way related to the Systems shall not exceed the totalcompensation received by the Corporation from the Member for the particularuse or receipt of the Systems during the twelve (12) months ending on thedate that the Corporation was advised by the Member of the Systems concernor the total amount of USD 250,000.00, whichever is less. It is intended thatthis limitation apply to any and all liability or cause of action however allegedor arising; to the fullest extent permitted by law; unless otherwise prohibitedby law; and notwithstanding any other provision of the Standards.A payment or credit by the Corporation to or for the benefit of a Member thatis not required to be made by the Standards will not be construed to be awaiver or modification of any Standard by the Corporation. A failure or delayby the Corporation to enforce any Standard or exercise any right of theCorporation set forth in the Standards will not be construed to be a waiver ormodification of the Standard or of any of the Corporation’s rights therein.Member Obligations3.4 Choice of Laws3-10©1969–2010 MasterCard10 December 2010 • MasterCard Rules3.4 Choice of LawsThe substantive laws of the State of New York govern all disputes involvingthe Corporation, the Standards, and/or the Members and Activity withoutregard to conflicts. Any action initiated by a Member regarding and/orinvolving the Corporation, the Standards and/or any Member and Activity mustbe brought, if at all, only in the United States District Court for the SouthernDistrict of New York or the New York Supreme Court for the County ofWestchester, and any Member involved in an action hereby submits to thejurisdiction of such courts and waives any claim of lack of personaljurisdiction, improper venue, and forum non conveniens.This provision in no way limits or otherwise impacts the Corporation’sauthority described in Rule 3.1. Each Member agrees that the Standards areconstrued under, and governed by, the substantive laws of the State of NewYork without regard to conflicts.Note A variation to this Rule appears in Chapter 12, “Europe Region Rules.”3.5 Examination and AuditThe Corporation, at any time, and whether or not a Member is subject toperiodic examination by banking regulatory authorities of the United States orany state thereof, or to periodic examination by regulatory authorities ofanother government, and at the Member’s sole expense, may require thatMember to be subjected to an examination and/or audit and/or periodicexamination and/or periodic audit by a firm of independent certifiedaccountants or by any other person or entity satisfactory to the Corporation.The complete results of each such examination and/or audit will be providedto the Corporation promptly upon completion.Any accountant’s examination or audit undertaken in accordance with this Rulemust be at least as detailed and equivalent in scope and nature as anexamination or audit required of banks under the laws of the United States andwill address such matters relating to or arising from Activity as the Corporationmay require for the time period to be examined or audited. Such matters mayinclude, by way of example and not limitation:1. The number of active and inactive Cards outstanding, the number of Cardsissued, the volume of Transactions, and the delinquency experience onrepayment.Member Obligations3.5 Examination and Audit©1969–2010 MasterCardMasterCard Rules • 10 December 2010 3-112. The nature of any credit or other investigation conducted before issuanceof a Card, the guidelines and criteria employed to evaluate credit risk, andthe nature of credit decisions made.3. The nature of collection procedures used, including the timing of collectionnotices, the wording and frequency of such notices, and the procedures forturning Card accounts over to collection services.4. An evaluation of charge-off procedures used, including the proceduresemployed during any period in which a Card account is carried withoutpayment, the disposition of a Card account after charge-off, collectionefforts by legal action, and the practices followed in the aging of Cardaccounts.5. An analysis of the geographic area covered by any Activity and theadequacy of the credit investigation and enforcement facilities in light ofsuch geographic coverage.6. An analysis of procedures used in evaluating prospective Merchants,including investigation standards, review of financial statements, Dun &Bradstreet reports, and/or similar or additional reports, and review ofpersonal credit reports on principals in the case of small Merchants.7. An analysis of procedures used in evaluating prospective Member ServiceProviders, including investigation procedures and criteria, review offinancial statements, Dun & Bradstreet reports, and/or similar or additionalreports, and of review personal credit reports on principals in the case ofsmall Member Service Providers.8. An analysis of procedures used in connection and to ensure ongoingcompliance with the Corporation’s AML Program.9. An analysis of practices in the manufacture, personalization and issuanceof Cards, including proper security measures for blank card stock, controlsimposed in the issuance of Cards, mailing procedures, information securitymeasures, and practices used to avoid duplicate issuance.10. An analysis of policies and practices concerning the taking of reserves asprotection against losses due to any Activity and an analysis of whethersuch policies and practices are at least as strict as that required of U.Sbanks on classified loans.The Corporation has no liability or responsibility for any failure to cause anexamination or audit or both to be conducted or for the nature or quality ofany examination or audit or for any action taken or not taken following anysuch examination or audit.Member Obligations3.6 Provision and Use of Information3-12©1969–2010 MasterCard10 December 2010 • MasterCard RulesThe Corporation reserves the right to audit a Member’s Activity andcompliance with the Standards. The Member must cooperate with andpromptly supply the Corporation with all information that the Corporationdeems necessary or appropriate in connection with any such audit. TheCorporation may assess a Member the costs of any such audit.3.6 Provision and Use of Information3.6.1 Obligation of Member to Provide InformationUpon request by the Corporation, and subject to applicable law or regulation,a Member must provide Member Reports to the Corporation, or to theCorporation’s designee; provided, compliance with the foregoing obligationdoes not require a Member to furnish any information, the disclosure of which,in the opinion of this Corporation’s legal counsel, is likely to create asignificant potential legal risk to this Corporation and/or its Member(s). To theextent that a Member is obligated to provide a Member Report to theCorporation that the Member deems to disclose proprietary information of theMember, such information will be treated by the Corporation with the degreeof care deemed appropriate by the Corporation to maintain its confidentiality.As an example of a Member Report, each Acquirer must provide TransactionData to the Corporation in such form and manner as the Corporation mayrequire. As used herein, “Transaction Data” means any data or data element orsubelement that the Standards require to be used to clear and/or settle aTransaction (whether cleared and/or settled via the Interchange System orotherwise) or that the Corporation requires to be provided.3.6.1.1 Information to CardholdersNote A Rule on this topic appears in Chapter 10, “Asia/Pacific Region Rules”; Chapter12, “Europe Region Rules”; Chapter 14, “South Asia/Middle East/Africa RegionRules”; and Chapter 15, “United States Region Rules.”3.6.1.2 Information to MerchantsNote A Rule on this topic appears in Chapter 11a, “Canada Region Code of ConductRelated Rules” and Chapter 12, “Europe Region Rules.”*chg**chg*Member Obligations3.6 Provision and Use of Information©1969–2010 MasterCardMasterCard Rules • 10 December 2010 3-133.6.1.3 Transaction Currency InformationEach Acquirer must inform the Corporation whether or not it submitsTransactions in a currency which is not the official currency of the countrywhere the Transactions took place, including Transactions on which POIcurrency conversion has been performed. This information must be providedannually and will include Merchant and service provider and any otherinformation required to be reported. When there is a change in thecurrency(ies) in which Transactions are submitted, in relation to the Acquireritself or a Merchant, or in the use of a service provider, the Acquirer isrequired to update its reported information no later than 30 days after thechange.3.6.2 Confidential Information of MembersThe Corporation and its parents, subsidiaries and affiliates (herein collectivelyreferred to as the “Corporation’s Affiliates”) will not use or disclose confidentialinformation or Confidential Transaction Data furnished to it by Members orMerchants except to the extent that the use or disclosure is in compliance withapplicable law and as specifically provided herein. “Confidential TransactionData” means any information provided to the Corporation or any of theCorporation’s Affiliates by a Member or Merchant if that information enablesthe Corporation or any of the Corporation’s Affiliates to determine anindividual’s identity or includes a Card account number. The Corporation orthe Corporation’s affiliates may use and/or disclose confidential informationand Confidential Transaction Data only as follows:1. For the benefit of the Member supplying the information to support theMember’s Program and/or Activities;2. As may be appropriate, to the Corporation’s and the Corporation’sAffiliates’ staff, accountants, auditors, or counsel;3. As may be required or requested by any judicial process or governmentalagency having or claiming jurisdiction over the Corporation or theCorporation’s Affiliates;4. As required for processing Transactions, including authorization, clearing,and settlement;5. For accounting, auditing, billing, reconciliation, and collection activities; or6. For the purpose of processing and/or resolving chargebacks or otherdisputes;7. For the purpose of protecting against or preventing actual or potentialfraud, unauthorized transactions, claims, or other liability, including to thirdparties providing these services;*chg*Member Obligations3.6 Provision and Use of Information3-14©1969–2010 MasterCard10 December 2010 • MasterCard Rules8. For the purpose of managing risk exposures, franchise quality, andcompliance with the Standards;9. For the purpose of providing other products or services to Members orother third parties, except that any Confidential Transaction Data providedin such products or services will only be provided to a Member and willconsist solely of Confidential Transaction Data provided to the Corporationor to any of the Corporation’s Affiliates by that Member;10. For the purpose of administering sweepstakes, contests, or other marketingpromotions;11. For preparing internal reports for use by the Corporation or theCorporation’s Affiliates, staff, management, and consultants in operating,evaluating, and managing Corporation business;12. For preparing and furnishing compilations, analyses, and other reports ofaggregated information, and anonymizing confidential information and/orConfidential Transaction Data, provided that such compilations, analyses,or other reports do not identify any (i) Member other than the Member forwhich the Corporation prepares the compilation, analysis, or other reportor (ii) Cardholder whose Transactions were involved in the preparation ofthe compilation, analysis, or other report;13. For the purpose of complying with applicable legal requirements;14. For other purposes for which consent has been provided by the individualto whom the confidential information and/or Confidential Transaction Datarelates.Each Member must ensure that it complies with the Standards and applicablelaws and regulations in connection with disclosing any ConfidentialTransaction Data or confidential information to the Corporation or theCorporation’s Affiliates to allow the uses and disclosures described herein,including any laws requiring the Member to provide notices to individualsabout information practices or to obtain consent from individuals to suchpractices.3.6.3 Use of Corporation Information by a MemberThe Corporation is not responsible and disclaims any responsibility for theaccuracy, completeness, or timeliness of any information disclosed by theCorporation to a Member; and the Corporation makes no warranty, express orimplied, including, but not limited to, any warranty of merchantability orfitness for any particular purpose with respect to any information disclosed byor on behalf of the Corporation to any Member disclosed directly or indirectlyto any participant in a Member’s Activity. Each Member assumes all risk of useof any information disclosed directly or indirectly to a Member or to anyparticipant in a Member’s Activity by or on behalf of the Corporation.Member Obligations3.7 Quarterly Member Report©1969–2010 MasterCardMasterCard Rules • 10 December 2010 3-153.6.4 Confidential Information of the Corporation and theCorporation’s AffiliatesA Member must not disclose confidential information of the Corporation or ofthe Corporation’s parents, subsidiaries, and Affiliates (herein collectivelyreferred to as the “Corporation’s Affiliates”) except:1. On a need-to-know basis to the Member’s staff, accountants, auditors, orlegal counsel subject to standard confidentiality restrictions, or2. As may be required by any court process or governmental agency havingor claiming jurisdiction over the Member, in which event the Member mustpromptly provide written notice of such requirement to the Secretary of theCorporation and to the extent possible, the Member must seek confidentialtreatment by the court or agency.The obligation set forth herein continues following the termination ofMembership. Information provided to Members by the Corporation or theCorporation’s Affiliates is deemed confidential unless otherwise stated inwriting.A Member may use confidential or proprietary information and/or trade secretsof the Corporation and the Corporation’s Affiliates solely for the purpose ofcarrying out the Member’s Activities.3.6.5 Data Protection—Europe Region OnlyNote A Rule on this topic appears in Chapter 12, “Europe Region Rules.”3.7 Quarterly Member ReportEach Member must complete and timely deliver to the Corporation theQuarterly Member Report or such other Member Report as the Corporationmay require be completed and returned by Members from time to time (suchMember Report being hereinafter referred to as the “QMR”) in the manner andat such time as the Corporation requires.Member Obligations3.7 Quarterly Member Report3-16©1969–2010 MasterCard10 December 2010 • MasterCard Rules3.7.1 Report Not ReceivedIf the Corporation does not receive a Member’s properly completed QMRquestionnaire when and how due, the Corporation may:1. Impose on the Member, after review of the Member’s last submitted QMRquestionnaire and assessment paid, an assessment equal to, or greaterthan, the Member’s assessment for such calendar quarter;2. Impose on the Member a noncompliance assessment, as set forth in theapplicable regional MasterCard Consolidated Billing System manual;3. If the Member’s actual payment based on the QMR questionnaire submittedby the Member compared with the Corporation’s estimate of payment dueresults in an underpayment by the Member, collect the amount of theunderpayment due and impose an interest penalty of the lower of two (2)percent per month or the highest rate permitted by law, from the date thepayment was first due through the date on which the additional amountdue is paid;4. If the Member’s actual payment based on the QMR questionnaire submittedby the Member compared with the Corporation’s estimate of payment dueresults in an overpayment by the Member, return the amount of theoverpayment, without interest or penalty thereon, as soon as practicableafter the overpayment amount is identified and calculated; and5. Collect the assessment amount, and any penalties and interest due thereon,from the Member’s settlement account.3.7.2 Erroneous or Incomplete ReportIf a Member submits an erroneous or incomplete QMR, the Corporation may:1. Impose on the Member, after review of the Member’s previously correctlysubmitted QMR and assessments paid thereon an assessment equal to, orgreater than, the Member’s last properly paid assessment for each calendarquarter for which it submitted an erroneous or incomplete QMR;2. Impose on the Member a noncompliance assessment, as set forth in theapplicable regional MasterCard Consolidated Billing System manual;3. If the Corporation’s estimate of payment due results in an underpaymentby the Member, collect the amount of the underpayment due and imposeon the Member an assessment on the amount of the underpayment of thelower of two (2) percent per month or the highest rate permitted by law,from the date(s) the payment(s) was first due and payable through thedate(s) on which the additional amount(s) due is paid;Member Obligations3.8 Authorization Service©1969–2010 MasterCardMasterCard Rules • 10 December 2010 3-174. If the Corporation’s estimate of payment due results in an overpayment bythe Member, return the amount of the overpayment, without penalty orinterest thereon, as soon as practicable after the overpayment amount isidentified and calculated; and5. Collect of the assessment amount, and any interest, from the Member’ssettlement account.3.7.3 Overpayment ClaimIf a Member, after submitting a QMR, submits to the Corporation a claimasserting an overpayment thereon, the Corporation may:1. Accept the claim for review only if it is received by the Corporation nolater than one calendar quarter after the date of the claimed overpayment;and2. Provided the overpayment claim is submitted in a timely manner andsubstantiated, return the amount of the overpayment to the Member,without interest or penalty thereon, as soon as practicable after theoverpayment amount is identified and calculated.A Member may request that the Corporation’s Secretary review theCorporation’s actions and make a finding or recommendation. Such a requestmust be received by the Secretary no later than 30 calendar days after the dateof the disputed action and any finding or recommendation by the Secretarywith regard to the matter will be final and not subject to appeal or othersimilar action.3.8 Authorization ServiceEach Class A Member must provide, at its own expense and with respect toCards issued by the Class A Member and any Affiliate Member Sponsored bythe Class A Member, authorization services that comply with the Standards.Each Class A Member must provide, at its own expense and with respect toMerchants of the Class A Member and any Affiliate Member Sponsored by theClass A Member, adequate and reasonable authorization services that complywith the Standards and each such Merchant must be instructed as to the properuse of such authorization services so as to ensure that Cards are accepted orrefused and that Transactions are effected or refused in compliance with theStandards.Note Additions to this Rule appear in Chapter 11a, “Canada Region Code of ConductRelated Rules” and Chapter 12, “Europe Region Rules.”*chg*Member Obligations3.8 Authorization Service3-18©1969–2010 MasterCard10 December 2010 • MasterCard Rules3.8.1 Selective AuthorizationWithout the express prior written approval of the Corporation, a Member maynot launch or maintain a Card Program for the purpose of selectivelyauthorizing Transactions arising from use of the Program Cards at only asubset of MasterCard acceptance locations. A Member is not prohibited fromauthorizing or declining individual Transactions based on:1. The amount of funds or credit available in the Cardholder account;2. Fraud or credit risks presented by individual Cardholder usage patterns;3. Cash access restrictions to manage a secured or high credit risk account; or4. Any other restriction on use the Corporation may permit.3.8.2 Authorization RoutingAn Acquirer must be capable of recognizing all active MasterCard bankidentification numbers (BINs) for purposes of obtaining Transactionauthorization, and obtain such authorization on behalf of each of its Merchantsas the Standards require.If the Acquirer uses MasterCard account range files provided by theCorporation for this purpose, such files must be loaded and functioning on theAcquirer’s host system and available to its Merchants for use within sixcalendar days from the date that each updated file is distributed. Alternatively,the Acquirer may submit all authorization requests containing an accountnumber with a BIN in the 510000 to 559999 range to the Interchange Systemfor routing to the Issuer.3.8.3 Full and Partial ReversalsNote A Rule on this topic appears in Chapter 15, “United States Region Rules.”3.8.4 Full Approvals and Account Balance ResponsesNote A Rule on this topic appears in Chapter 15, “United States Region Rules.”*chg*Member Obligations3.9 Transaction Requirements©1969–2010 MasterCardMasterCard Rules • 10 December 2010 3-193.9 Transaction RequirementsEach Member must, in accordance with the Standards, comply with each of thefollowing five requirements:1. Accept and present to the Issuer records of Transactions arising from theuse of a Card issued by any other Member from any Merchant that theMember has authorized to honor Cards;2. Accept and pay for records of Transactions received from another Memberarising from the use of any Card or Access Device issued by it;3. Present to the Issuer records of the cash disbursement transactions theMember acquires; and4. Maintain, directly or indirectly, a functional twenty-four-hour per dayoperating connection to the Interchange System, and not force any otherMember wishing to operate multilaterally using the Interchange System intobilateral agreements.5. Ensure that each Cross-border Transaction (that is, one that takes place at aMerchant located outside the country where the Card was issued) isprocessed through the Interchange System, unless one of the followingconditions exist:a. The Member has applied for and received prior written approval fromthe Corporation to effect other arrangements;b. The Member has applied for and received certification from theCorporation with the network processing standards for any bilateral ormultilateral arrangement entered into on or after 1 June 2009; orc. Applicable Law requires other arrangements, and only to the extentotherwise so required.As used in paragraph 5 above, “processed” means authorized when requiredand cleared through the Interchange System.If a Cross-border Transaction is not processed through the Interchange Systemand meets one of the conditions contained in requirement five, parts (a)through (c) above, Members shall also provide the Corporation with a reportwith respect to such Cross-border Transactions in a form as required by theCorporation on a time frame as prescribed by the Corporation. Such reportand all information contained therein shall be subject to Rule 3.6.2.Note A variation to this Rule provision appears in Chapter 12b, “SEPA Rules.”Member Obligations3.9 Transaction Requirements3-20©1969–2010 MasterCard10 December 2010 • MasterCard RulesIn the event that any Member is a party to a bilateral or multilateralarrangement established before 1 June 2009 and such Member has not appliedfor and received prior written approval from the Corporation to effect sucharrangement, then such Member must:1. Register such bilateral or multilateral arrangement with the Corporation nolater than 31 August 2009 and provide such other information as theCorporation may request in connection with an evaluation of the relevantarrangement against the network processing standards specified by theCorporation from time to time.2. If such arrangement fails to meet or exceed such network processingstandards, work with the Corporation in a good faith and timely manner tomake such adjustments as may be required in order to achieve compliance.3. In any event, Members shall also provide the Corporation with a reportwith respect to such Cross-border Transactions in a form as required by theCorporation on a time frame as prescribed by the Corporation. Such reportand all information contained therein shall be subject to Rule 3.6.2.To initiate registration or application for certification, Members must contactvia e-mail: networkprocessingstandards@mastercard.com.A payment service, whose related marks are ineligible to appear on a Cardpursuant to Rule 4.2.12, shall be ineligible to enter into a Corporationapproved bilateral or multilateral arrangement pursuant to requirement five ofthis Rule 3.9.3.9.1 Chip Transactions and Hybrid TerminalsRefer to section 2.8 of the Chargeback Guide for Standards applicable to chipTransactions, including chip/PIN Transactions, and for information aboutintracountry, intraregional, and interregional chip liability shifts and the GlobalChip Liability Shift Program.Refer to section 4.8 of the Security Rules and Procedures manual for hybridterminal security Standards.Note Rules on this topic appear in Chapter 10, “Asia/Pacific Region Rules”; Chapter11, “Canada Region Rules”; Chapter 12, “Europe Region Rules”; Chapter 12b,“SEPA Rules”; Chapter 13, “Latin America and the Caribbean Region Rules”;Chapter 14, “South Asia/Middle East/Africa Region Rules”; and Chapter 14a,“South Africa Rules.”*chg*Member Obligations3.9 Transaction Requirements©1969–2010 MasterCardMasterCard Rules • 10 December 2010 3-213.9.2 Card-Not-Present TransactionsNote Rules on this topic appear in Chapter 12, “Europe Region Rules” and Chapter14b, “India Rules.”3.9.3 Refund TransactionsRefer to sections 2.1.2.3 and 2.1.8 of the Chargeback Guide for refundTransaction requirements.Note A Rule on this topic appears in Chapter 15, “United States Region Rules.”3.9.4 Automated Fuel Dispenser TransactionsNote A Rule on this topic appears in Chapter 11, “Canada Region Rules” andChapter 15, “United States Region Rules.”3.9.5 Issuer Performance StandardsNote A Rule on this topic appears in Chapter 12, “Europe Region Rules.”3.9.6 PIN-based Debit TransactionsNote Rules on this topic appear in Chapter 15b, “United States Region PIN-basedDebit Transaction Rules.”3.9.7 Euro MigrationNote A Rule on this topic appears in Chapter 12, “Europe Region Rules.”*chg*Member Obligations3.10 Additional Member Obligations3-22©1969–2010 MasterCard10 December 2010 • MasterCard Rules3.9.8 Chargebacks for Reissued CardsEffective 15 April 2011, upon reissuing a Card with the same primary accountnumber and a new expiration date, the Issuer must include the expiration datein all Transaction chargeback records.3.9.9 MasterCard PayPass TransactionsNote A Rule on this topic appears in Chapter 11, “Canada Region Rules.”3.10 Additional Member ObligationsEach Member must comply with the following obligations.3.10.1 Safeguard Card Account and Transaction InformationEach Member, for itself and any third party that may be afforded access toTransaction or Card account information, or both, by or on behalf of theMember, must safeguard and use or permit use of such information inaccordance with the Standards.3.10.2 Satisfaction of Minimum Member ObligationsWithin one year of becoming a Class A Member and at all times thereafter,each Class A Member must itself, taken together with any Affiliate Member(s)Sponsored by the Class A Member as if they were a single Class A Member,have satisfied the minimum obligations as may be established from time totime and as set forth in the Standards or in a Member Agreement or License.3.10.3 Satisfaction of Minimum Financial RequirementsEach Member at all times must satisfy the minimum financial requirementsestablished by the Corporation from time to time. The Corporation, in itsdiscretion, may establish different or additional financial requirements for1. A category of financial institutions, organizations, or corporations or otherentities that are eligible to become a Member; or*chg**chg*Member Obligations3.10 Additional Member Obligations©1969–2010 MasterCardMasterCard Rules • 10 December 2010 3-232. An individual Member or prospective Member in the manner set forth inthe Standards should the Corporation determine that different or additionalrequirements are reasonably appropriate to evidence the financial integrityof a type of Member or an individual Member or prospective Member.3.10.4 Integrity of Brand and NetworkA Member may not directly or indirectly engage in or facilitate any action thatis illegal, or that, in the opinion of the Corporation and whether or notaddressed elsewhere in the Standards, damages or may damage the goodwillor reputation of the Corporation or of any Mark, and the Member willpromptly cease engaging in or facilitating such action upon request of theCorporation.In addition, a Member may not place or cause to be placed on any Card or onany terminal or acceptance device any image, information, application, orproduct that would in any way, directly or indirectly, have or potentially havethe effect of diminishing or devaluing the reputation or utility of the Marks, aCard, or any of the Corporation’s products, programs, services, networks, orsystems.Note An addition to this Rule appears in Chapter 15, “United States Region Rules.”3.10.5 Fees, Expenses and Other Payment ObligationsIf a Member does not timely pay the Corporation or any other person anyamount due under the Standards, then the Corporation has the right,immediately and without providing prior notice to the Member, to assess andcollect from that Member, on a current basis as the Corporation deemsnecessary or appropriate, such amount, as well as the actual attorneys’ feesand other costs incurred by the Corporation in connection with any effort tocollect such amount from that Member.The Corporation may assess and collect such amount at any time after theapplicable amount becomes due, by any means available to the Corporation,which shall specifically include, by way of example and not limitation:1. The taking or setoff of funds or other assets of the Member held by theCorporation;2. The taking or setoff of funds from any account of the Member upon whichthe Corporation is authorized to draw;3. The taking of funds due to the Member from any other Member; andMember Obligations3.11 Limitation of Liability of Cardholders for Unauthorized Use3-24©1969–2010 MasterCard10 December 2010 • MasterCard Rules4. The taking of funds being paid by the Member to any other Member.Each Member expressly authorizes the Corporation to take the Member’s fundsand other assets as authorized by this Rule, and to apply such funds and otherassets to any obligation of the Member to the Corporation or any other personunder the Standards, and no Member shall have any claim against theCorporation or any other person in respect of such conduct by theCorporation. Each Member agrees upon demand to promptly execute,acknowledge and deliver to the Corporation such instruments, agreements,lien waivers, releases, and other documents as the Corporation may, from timeto time, request in order to exercise its rights under this Rule.If the Corporation draws on the Member’s funds, the Corporation is notrequired to reimburse the Member or any third party (including anotherMember) for funds drawn which are owned by any of them or otherwisesubject to any of their rights. The Member and any third party (includinganother Member) bear all risk and liability related to the funds drawn and shalljointly and severally indemnify and hold the Corporation harmless from allliability and claims arising from any such draw of funds.3.10.5.1 Taxes and Other ChargesEach Member must pay when due all taxes charged by any country or otherjurisdiction in which the Member conducts Activity with respect to suchActivity. In the event the Corporation is charged taxes or other charges by acountry or other jurisdiction as a result of or otherwise directly or indirectlyattributable to Activity, the Member is obligated to reimburse the Corporationthe amount of such taxes or other charges and the Corporation may collectsuch taxes or other charges from the settlement account of the Class A Memberresponsible in accordance with the Standards for the Activity that gave rise tothe charge.3.11 Limitation of Liability of Cardholders forUnauthorized UseNote A Rule on this topic appears in Chapter 10, “Asia/Pacific Region Rules”; Chapter11, “Canada Region Rules”; Chapter 14, “South Asia/Middle East/Africa RegionRules”; and Chapter 15, “United States Region Rules.”Member Obligations3.12 Pay-Per-Call Service©1969–2010 MasterCardMasterCard Rules • 10 December 2010 3-253.12 Pay-Per-Call ServiceThe use of a “900” or other “pay-per-call” telephone service to offer or solicitfor any Activity is prohibited.3.13 Encashment of MasterCard Travelers ChequesEach Member must encash MasterCard Travelers Cheques issued in anycurrency when presented for payment at any of its locations, provided:1. Such encashment is permitted by law; and2. The Member has the ability (including a foreign exchange capability, withrespect to a currency other than U.S. currency MasterCard TravelersCheques presented for encashment) to encash such cheques as a result ofthe business it normally conducts at a location.If the encashing Member encashes any other brand of travelers cheques at alocation, the Member may impose terms and conditions for the encashment ofMasterCard Travelers Cheques that it uses to encash other brands of travelerscheques.3.14 Accounts on a CardNote Additions to this Rule appear in Chapter 11a, “Canada Region Code of ConductRelated Rules.”Compliance ZonesThe following table identifies the noncompliance category that the Corporationhas assigned to the Standards described within this chapter. Thesenoncompliance categories are assigned for the purposes of assessments underthe compliance framework, as described in Rule 3.1.2.Rule Number Rule Title Category3.1.2.3 Certification C3.2 Conduct of Activity A3.5 Examination and Audit A*chg*Member ObligationsCompliance Zones3-26©1969–2010 MasterCard10 December 2010 • MasterCard RulesRule Number Rule Title Category3.6.1 Obligation of Member to Provide Information C3.6.1.1 Information to Cardholders B3.6.1.2 Information to Merchants B3.6.4 Confidential Information of the Corporation and the Corporation’sAffiliatesA3.6.5 Data Protection—Europe Region Only A3.7 Quarterly Member Report A3.8 Authorization Service A3.8.1 Selective Authorization B3.8.2 Authorization Routing A3.8.7 Intracountry Transactions A3.9 Transaction Requirements A3.9.2 Card-Not-Present Transactions B3.9.3 Refund Transactions B3.9.4 Automated Fuel Dispenser Transactions B3.9.5 Issuer Performance Standards A3.9.7 Euro Migration C3.9.8 Chargebacks for Reissued Cards C3.10.1 Safeguard Card Account and Transaction Information A3.10.2 Satisfaction of Minimum Member Obligations A3.10.3 Satisfaction of Minimum Financial Requirements A3.10.4 Integrity of Brand and Network A3.10.5.1 Taxes and Other Charges C3.11 Limitation of Liability of Cardholders for Unauthorized Use B3.12 Pay-Per-Call Service B3.13 Encashment of MasterCard Travelers Cheques B*chg*©1969–2010 MasterCardMasterCard Rules • 10 December 2010 4-i4 Trademarks and Service MarksThis chapter contains information about use of the Marks and competingmarks.4.1 Right to Use the Marks ………………………………………………………………………. 4-14.1.1 Licenses …………………………………………………………………………………… 4-14.1.2 Protection and Registration of the Marks …………………………………….. 4-14.1.2.1 Registration of a Card Face Design …………………………………….. 4-24.1.3 Misuse of a Mark ………………………………………………………………………. 4-24.2 General Rules for Use of the Marks ……………………………………………………. 4-24.2.1 Use of the Marks ………………………………………………………………………. 4-24.2.2 Compliance ………………………………………………………………………………. 4-34.2.3 Required Use ……………………………………………………………………………. 4-34.2.4 Review of Solicitations ………………………………………………………………. 4-34.2.5 Signage System …………………………………………………………………………. 4-34.2.6 Particular Use of a Mark ……………………………………………………………. 4-44.2.6.1 Generic Use ……………………………………………………………………… 4-44.2.6.2 Use of Modifiers ……………………………………………………………….. 4-44.2.6.3 Use on Stationery ……………………………………………………………… 4-44.2.6.4 Use on Non-Licensed Goods ……………………………………………… 4-44.2.6.5 Use on Checks …………………………………………………………………. 4-44.2.6.6 Use on Cards ……………………………………………………………………. 4-54.2.7 Use of the MasterCard Word Mark ……………………………………………… 4-54.2.7.1 Use or Registration of “Master” Terminology ………………………. 4-54.2.7.2 Use of MasterCard in a Corporate, Business or Domain Name 4-54.2.7.3 Use of MasterCard in Text …………………………………………………. 4-64.2.7.4 Registration Notice ……………………………………………………………. 4-64.2.7.5 Program Names ………………………………………………………………… 4-64.2.8 Use of the Interlocking Circles Device ………………………………………… 4-64.2.8.1 Reproduction Standards …………………………………………………….. 4-64.2.8.2 Variations Prohibited ………………………………………………………… 4-74.2.8.3 Use or Registration of Similar Logos, Designs, and Names …… 4-74.2.9 Use of Multiple Brand Marks ……………………………………………………… 4-74.2.10 Use of the Card Face Design ……………………………………………………. 4-74.2.10.1 In Advertising and Marketing Material ………………………………. 4-74.2.10.2 In Merchant Advertising …………………………………………………… 4-84.2.10.3 In Statement Enclosures …………………………………………………… 4-84.2.11 Use of the MasterCard Brand Mark on Other Cards ……………………. 4-8Trademarks and Service Marks4-ii©1969–2010 MasterCard10 December 2010 • MasterCard Rules4.2.12 Use of a Competing Mark on Cards ………………………………………….. 4-84.2.13 Use of Other Acceptance Marks on Cards …………………………………. 4-94.2.14 Use on Mobile Payment Devices ………………………………………………. 4-9Compliance Zones ………………………………………………………………………………… 4-10Trademarks and Service Marks4.1 Right to Use the Marks©1969–2010 MasterCardMasterCard Rules • 10 December 2010 4-14.1 Right to Use the Marks4.1.1 LicensesA right to use one or more Marks or to use the Interchange System to processunbranded transactions is granted to Members and other licensees onlypursuant to the terms of a License or other agreement with the Corporation.Unless an interim License has been granted, a Mark must not be used in anyform or manner before the execution of a written License and, if applicable, aLicense addendum.No additional interest in the Marks is granted with the grant of a right to usethe Marks. A Licensee is responsible for all costs and liabilities resulting fromor related to its use of a Mark or the Interchange System.Except as otherwise set forth in Rule 1.5.4, each License is non-exclusive andnon-transferable. The right to use a Mark may be sublicensed by a Licensee toany Sub-licensee only in accordance with the Standards or otherwise with theexpress written consent of the Corporation. A Member or other Licensee thatis permitted to sublicense the use of a Mark to a Sub-licensee must ensure, forso long as the sublicense is in effect, that the Mark is used by the Sub-licenseein accordance with the Standards and/or other additional conditions for suchuse required by the Corporation.The right to use a Mark cannot be sublicensed or assigned, whether by sale,consolidation, merger, amalgamation, operation of law, or otherwise, withoutthe express written consent of the Corporation.The Corporation makes no express or implied representations or warranties inconnection with any Mark and the Corporation specifically disclaims all suchrepresentations and warranties.4.1.2 Protection and Registration of the MarksProtection of the Marks is vital to the Corporation, its Members and otherLicensees. Any use of a Mark must not degrade, devalue, denigrate, or causeinjury or damage to the Marks or the Corporation in any way.By using any Mark, each Member and other Licensee acknowledges theCorporation’s sole ownership of the Marks and agrees not to challenge orcontest the Corporation’s exclusive ownership of the Marks, assist others indoing so either directly or indirectly or otherwise take or assist others in takingany acts or failing to take actions that would be inconsistent with thatownership. All use of any Mark will inure solely to the benefit of theCorporation.Trademarks and Service Marks4.2 General Rules for Use of the Marks4-2©1969–2010 MasterCard10 December 2010 • MasterCard RulesNo Member or other Licensee or Sub-licensee may register, attempt to registeror in any way make use of the Marks, or any mark or term that, in the solediscretion of the Corporation, is deemed to be derivative of, similar to, or inany way related to a Mark. In particular, no use of a Mark may be made on orin connection with any card, device or other application associated with apayment service that the Corporation deems to be competitive with anyActivity.Without limitation, the foregoing shall specifically apply to registration or useof any mark or term that incorporates, references or otherwise could beconfused or associated with a Mark currently or previously Licensed,Sublicensed or otherwise used by a Member, the Member’s Sub-licensees andpermittees and their respective successors or assignees (including, withoutlimitation, by virtue of acquisition by merger or otherwise, bankruptcy orvoluntary or involuntary winding-up.)Note An addition to this Rule appears in Chapter 12, “Europe Region Rules.”4.1.2.1 Registration of a Card Face DesignA Member or other Licensee must not register or attempt to register any Cardface design that includes the MasterCard Brand Mark.4.1.3 Misuse of a MarkEach Member and other Licensee must promptly notify the Corporationwhenever it learns of any misuse of any Mark or of any attempt to copy orinfringe any of the Marks.4.2 General Rules for Use of the Marks4.2.1 Use of the MarksA Mark may be used only pursuant to a License. This provision applies,without limitation, to:1. Use of a Mark for advertising or promotional purposes;2. Placing orders for card stock or for any other materials bearing a Mark;3. Displaying a Mark;4. Issuing Cards;Trademarks and Service Marks4.2 General Rules for Use of the Marks©1969–2010 MasterCardMasterCard Rules • 10 December 2010 4-35. Signing Merchants; and6. Distributing or affixing decals.A Mark may only be used by Members and Licensees to identify and promoteActivities, in compliance with the Standards.4.2.2 ComplianceAny use of a Mark must comply with the License, the Standards, and all of theCorporation’s reproduction, usage, and artwork standards as may be in effectfrom time to time.4.2.3 Required UseEach Member must prominently display the applicable Mark in all advertising,marketing, promotional, and collateral materials promoting a program orservice offered by the Corporation. The inclusion of the MasterCard WordMark in the headline or title, or the prominent display of the MasterCard WordMark on the first page of the offering, satisfies this requirement.4.2.4 Review of SolicitationsThe Corporation reserves the right to review samples and approve or refuse toapprove use of a Solicitation. Amended samples, if required as a result of thisreview, also must be forwarded to the Corporation for review. Without theexpress prior written consent of the Corporation, an Issuer may not use aSolicitation or any other application, advertisement, promotion, marketingcommunication, offer, or the like in which a Card Program is in any waylinked to a different payment card program.4.2.5 Signage SystemThe Corporation’s interlocking circles signage system is employed when oneor more brands using the MasterCard interlocking circles device is accepted ata point of interaction. The system requires the consecutive vertical orhorizontal display of the brand Marks in the following sequence—MasterCard,MasterCard Electronic, Maestro, Cirrus. Of the four brands, only those brandsthat are accepted at a particular point of interaction may be displayed there.The MasterCard Electronic brand mark must not be displayed on an ATM.Trademarks and Service Marks4.2 General Rules for Use of the Marks4-4©1969–2010 MasterCard10 December 2010 • MasterCard Rules4.2.6 Particular Use of a Mark4.2.6.1 Generic UseA generic term, such as “bank card” or “payment card”, does not function as aMark. Use of a Mark in a manner that would tend to genericize that Mark orotherwise result in the loss of trademark rights is prohibited.4.2.6.2 Use of ModifiersA Member is permitted to use its name or a geographical designation inconjunction with the MasterCard Word Mark, such as “California MasterCardcard program” or “First Issuer MasterCard Department.” The Corporation mayprohibit the use of a modifier that it determines will impair the distinctivenessof any Mark or create any likelihood of confusion or reflect poorly on theCorporation.4.2.6.3 Use on StationerySubject to the Standards, a Licensee is permitted to use a Mark on print orelectronic stationery, letterhead, envelopes, and the like for the purpose ofidentifying its Program or service. If the MasterCard Word Mark is used, theLicensee’s name must appear in close proximity to it, such as “SuperiorNational Bank MasterCard Department.”4.2.6.4 Use on Non-Licensed GoodsA Mark may not be used in a manner likely to create the impression that anygood or service offered by the Licensee or Sub-licensee is sponsored,produced, offered, approved, sold by, or otherwise affiliated with theCorporation. Each Licensee must ensure that each of its Sub-licensees,partners, Merchants, and other Program participants does not apply a Mark toany good or service not expressly covered under the terms of a License.4.2.6.5 Use on ChecksA Mark may not be placed on a check, except as permitted by a “MasterChecking” License.Trademarks and Service Marks4.2 General Rules for Use of the Marks©1969–2010 MasterCardMasterCard Rules • 10 December 2010 4-54.2.6.6 Use on CardsStandards governing the use of Marks on Cards, including but not limited tomultiple application EMV chip Cards and other Cards displaying co-residingMarks, are set forth in the Card Design Standards System, available onMasterCard Online, which are incorporated into these Rules by reference.Note An addition to this Rule appears in Chapter 11a, “Canada Region Code ofConduct Related Rules,” Chapter 12a, “Europe Region Debit-related Rules,”Chapter 12b, “SEPA Rules,” Chapter 10a, “New Zealand Rules,” Chapter 14a,“South Africa Rules,” Chapter 15a, “United States Region Debit-related Rules,”and Chapter 15b, “United States Region PIN-based Debit Transaction Rules.”4.2.7 Use of the MasterCard Word MarkThe MasterCard Word Mark “MasterCard®” must appear in English and must bespelled correctly and as one word. The letters “M” and “C” must becapitalized. “MasterCard” must not be abbreviated, hyphenated, used in theplural or possessive, or translated from English into another language.4.2.7.1 Use or Registration of “Master” TerminologyExcept as expressly permitted in writing by the Corporation, the word “Master”may not be used or registered as part of a trademark, service mark, corporatename, business name, or Program name, whether preceding, following orlinked together as one word, or with a hyphen or slash, or in connection withany financial or bank-related goods or services.4.2.7.2 Use of MasterCard in a Corporate, Business or DomainNameThe MasterCard Word Mark may not be used as part of a legal, corporate, orbusiness name, such as “MasterCard® Center, Inc.” No Internet domain namemay be registered that includes the word “MasterCard,” except as expresslypermitted in writing by the Corporation.*chg*Trademarks and Service Marks4.2 General Rules for Use of the Marks4-6©1969–2010 MasterCard10 December 2010 • MasterCard Rules4.2.7.3 Use of MasterCard in TextThe MasterCard Word Mark must be used as an adjective (as in “yourMasterCard® card”) in the first or most prominent use subsequent to any use inthe title, headline, signature, or cover page of an offering, unless:1. the word “MasterCard” is used as part of a Member’s Program name (as in“Member/Program name MasterCard”); or2. otherwise expressly approved in writing by the Corporation.Use of the word “MasterCard” as a verb (“MasterCard your gifts”), in plural(“MasterCards”) or in possessive form is prohibited.4.2.7.4 Registration NoticeThe MasterCard Word Mark must be accompanied by the registration notice or the local law equivalent. (Refer to the reproduction, usage, and artworkStandards for the correct use and placement of the registration mark.)4.2.7.5 Program NamesEach MasterCard Program name, offering, and service must be referred to bythe full, legal name and include the appropriate registration notice.4.2.8 Use of the Interlocking Circles Device4.2.8.1 Reproduction StandardsThe MasterCard interlocking circles device must be reproduced in accordancewith all of the following requirements:1. All color, version, and other specifications set forth in the MasterCardBrand Center Web site at http://www.mastercardbrandcenter.com and in the CardDesign Standards;2. With a MasterCard brand name (such as “MasterCard,” “MasterCardElectronic,” “Maestro,” or “Cirrus”) in custom lettering placed within thecircles, except as expressly permitted by the Corporation. Only apermitted MasterCard brand name may be superimposed on any part ofthe interlocking circles device; and3. Accompanied by the registration notice ® or the local law equivalent inclose proximity to the Mark. If the maximum horizontal dimension of theinterlocking circles device is one inch or less, the registration notice maybe omitted.Trademarks and Service Marks4.2 General Rules for Use of the Marks©1969–2010 MasterCardMasterCard Rules • 10 December 2010 4-74.2.8.2 Variations ProhibitedAll modifications, alterations, and variations of the MasterCard interlockingcircles device are prohibited without the express written consent of theCorporation.4.2.8.3 Use or Registration of Similar Logos, Designs, and NamesA Member, Licensee, or Sub-licensee may not use or seek to register any logo,design, or decorative element that includes two or more interlocking,adjoining, or adjacent circles, spheres, globes, or similar shapes that, in thesole discretion of the Corporation, may be likely to cause confusion with, orcreate a false association, connection or affiliation with, or dilute thedistinctiveness of the MasterCard interlocking circles device.4.2.9 Use of Multiple Brand MarksWhen two or more Marks that use the MasterCard interlocking circles deviceare displayed together, they must have visual parity with one another.When promoting any Mark with another acceptance mark in any media todenote acceptance, no other acceptance mark, symbol or logo may be orappear to be larger or more important than or more welcomed than the Mark.To maintain visual parity, a Mark must be at least as prominent as, and appearin at least the same frequency, size, and color treatment as, any otheracceptance mark displayed. To maintain parity within written text, theMasterCard Word Mark must be at least as prominent as, and appear at least asfrequently as, any other acceptance mark mentioned.4.2.10 Use of the Card Face Design4.2.10.1 In Advertising and Marketing MaterialAn Issuer is permitted to depict a Card face for an advertising or marketingpurpose, subject to the following requirements:1. The proportions of the Card face design, including typestyle and relativepositions of the legends, may not be altered or distorted.2. The legend “VALID THRU” or the equivalent must be depicted on the Cardface design, unless the Card face design contains an effective date and anexpiration date, in which case the words “VALID DATES” must be depictedin accordance with the requirements set forth in section 2.5.1.5 of theSecurity Rules and Procedures manual and in the Card Design StandardsSystem.Trademarks and Service Marks4.2 General Rules for Use of the Marks4-8©1969–2010 MasterCard10 December 2010 • MasterCard Rules3. The Card face design must bear account information (for example, theaccount number, the effective date and/or expiration date) and all Cardface design requirements set forth in the Security Rules and Proceduresmanual and in the Card Design Standards System.The first six digits of the account number must be either a BankIdentification Number (BIN) assigned to the Issuer by the Corporation orthe unassigned BIN 541275, which the Corporation has set aside for Issueruse in advertising and marketing Card face designs.4. The MasterCard Identification Area (or the MasterCard Brand Mark, if theCard face design depicts a Card with the hologram on the Card back) mustbe completely visible on at least one Card face design depicted in thematerials.4.2.10.2 In Merchant AdvertisingA Merchant is prohibited from using the Card face design to indicateacceptance in Merchant advertising or other signage, other than signage for aCo-brand Program in which the Merchant is a Co-brand Partner. A Merchantmay display an Issuer-specific Card face design in Merchant advertising andany other signage that is not used to signify acceptance.4.2.10.3 In Statement EnclosuresThe Card face design must be displayed on statement enclosures used to offergoods or services to cardholders through the use of a Member’s Card. TheMasterCard Brand Mark may be used in lieu of the Card face design if theMember’s name is displayed on the statement enclosure.4.2.11 Use of the MasterCard Brand Mark on Other CardsThe MasterCard Brand Mark may not be used on a promotional card or othercard without the prior written consent of the Corporation.4.2.12 Use of a Competing Mark on CardsUnless expressly permitted by the Corporation, none of the following marks orany similar or related mark, or any mark owned by or affiliated with one ofthese entities, may appear on a Card:1. American Express2. JCB3. Diners Club4. DiscoverTrademarks and Service Marks4.2 General Rules for Use of the Marks©1969–2010 MasterCardMasterCard Rules • 10 December 2010 4-95. Visa6. Any other name, logo, or mark identifying or in any way associated with apayment service that the Corporation deems to be competitive with anyMasterCard product or Program.Any such competitor’s credit or debit POI mark, logo, or name, regardless ofwhether registered, may not appear on a Card, nor may a payment applicationof any such competitor reside on the magnetic stripe or chip of a Card. Theappearance of the PLUS brand mark or the PLUS word mark on the back of aCard is permitted where there is an effective PLUS agreement with the Issuerexecuted before July 1996.No Member or other Licensee or Sub-licensee or any of its affiliates mayregister, attempt to register, or in any way make use of any Marks or any markor term that the Corporation in its sole discretion deems to be derivative of,similar to, dilutive of, or in any way related to a Mark on any Card, device, orother application associated with a payment service that the Corporationdeems to be competitive with any Activity of the Corporation. Withoutlimitation, the foregoing shall specifically apply to registration or use of anymark or term that incorporates, references, or otherwise could be confused orassociated with any Mark currently or previously Licensed, sublicensed (to theextent sublicensing has been previously permitted), or used by a Member, itsSub-licensees and permittees, and their respective successors or assignees(including, without limitation, by virtue of acquisition by merger or otherwise,bankruptcy or voluntary or involuntary winding-up.)4.2.13 Use of Other Acceptance Marks on CardsNo acceptance mark may appear on a Card except as set forth in theStandards, including the Card Design Standards System.Note An addition to this Rule appears in Chapter 11a, “Canada Region Code ofConduct Related Rules” and Chapter 12b, “SEPA Rules.”4.2.14 Use on Mobile Payment DevicesStandards governing the use of Marks on Mobile Payment Devices are set forthin the MasterCard PayPass Branding Standards, which are incorporated intothese Rules by reference. Information regarding the MasterCard PayPassBranding Standards is available by e-mail from paypass@mastercard.com.*chg*Trademarks and Service MarksCompliance Zones4-10©1969–2010 MasterCard10 December 2010 • MasterCard RulesCompliance ZonesThe following table identifies the noncompliance category that the Corporationhas assigned to the Standards described within this chapter. Thesenoncompliance categories are assigned for the purposes of assessments underthe compliance framework, as described in Rule 3.1.2.Section Number Section Title Category4.1.1 Licenses A4.1.2 Protection and Registration of the Marks B4.1.3 Misuse of a Mark B4.2 General Rules for Use of the Marks B©1969–2010 MasterCardMasterCard Rules • 10 December 2010 5-i5 Merchants and Sales TransactionsThis chapter contains information about Acquirer and Merchant obligationsand acceptance procedures.5.1 The Merchant Agreement…………………………………………………………………… 5-15.1.1 Verify Bona Fide Business Operation …………………………………………. 5-15.1.2 Required Terms ………………………………………………………………………… 5-15.1.3 Assessments for Merchant Agreement Noncompliance …………………. 5-25.2 Acquirer Obligations …………………………………………………………………………. 5-25.2.1 Acquiring Transactions………………………………………………………………. 5-25.2.2 Merchant and Sub-merchant Compliance with the Standards ……….. 5-35.2.3 Merchant Information ……………………………………………………………….. 5-35.2.4 Payments to Merchants ……………………………………………………………… 5-35.2.5 Supplying Materials …………………………………………………………………… 5-35.3 Merchant Monitoring …………………………………………………………………………. 5-45.4 Use of a Payment Facilitator ………………………………………………………………. 5-45.4.1 Responsibility for Payment Facilitator and Sub-merchant Activity …. 5-45.4.2 High-Risk Payment Facilitators …………………………………………………… 5-65.4.3 Registration Requirements for Payment Facilitators ……………………… 5-75.5 Payment Facilitator Obligations ………………………………………………………….. 5-85.5.1 Sub-merchant Screening Procedures …………………………………………… 5-85.5.2 MATCH Inquiry Required ………………………………………………………….. 5-95.5.3 Sub-merchant Agreement ………………………………………………………….. 5-95.5.3.1 Required Provisions ………………………………………………………… 5-105.5.4 Obligations as Sponsor of Sub-merchants …………………………………. 5-115.5.4.1 Submit Valid Transactions ……………………………………………….. 5-115.5.4.2 Sub-merchant Compliance with the Standards …………………… 5-115.5.4.3 Maintaining Sub-merchant Information …………………………….. 5-115.5.4.4 Payments to Sub-merchants …………………………………………….. 5-125.5.4.5 Supplying Materials to Sub-merchants ………………………………. 5-125.5.4.6 Sub-merchant Monitoring ………………………………………………… 5-125.6 Merchant Identification and Responsibility for Transactions ……………….. 5-125.7 Use of the Marks …………………………………………………………………………….. 5-135.7.1 Merchants Must Display the MasterCard Acceptance Mark …………. 5-145.7.2 Merchant Advertising and POI Materials ……………………………………. 5-14Merchants and Sales Transactions5-ii©1969–2010 MasterCard10 December 2010 • MasterCard Rules5.7.3 Local/Regional Acceptance Brands …………………………………………… 5-145.7.4 Direct Mail Cardholder Solicitation Merchants ……………………………. 5-155.8 Card Acceptance Requirements ………………………………………………………… 5-165.8.1 Honor All Cards………………………………………………………………………. 5-165.8.2 Merchant Acceptance ………………………………………………………………. 5-175.8.3 Obtain an Authorization ………………………………………………………….. 5-175.8.4 Additional Cardholder Identification …………………………………………. 5-175.8.5 E-Commerce Transactions ……………………………………………………….. 5-175.8.6 Purchase With Cash Back Transactions …………………………………….. 5-175.9 Submitting Transactions …………………………………………………………………… 5-185.9.1 Valid Transactions …………………………………………………………………… 5-185.9.2 Submit Transactions within Three Business Days ………………………. 5-185.10 Noncompliance Assessments ………………………………………………………….. 5-195.11 Prohibited Practices ……………………………………………………………………….. 5-195.11.1 Discrimination ………………………………………………………………………. 5-195.11.2 Charges to Cardholders ………………………………………………………….. 5-195.11.3 Minimum/Maximum Transaction Amount Prohibited ……………….. 5-205.11.4 Scrip-dispensing Terminals …………………………………………………….. 5-205.11.5 Prohibited Transactions………………………………………………………….. 5-205.11.6 Other Forms of Payment ………………………………………………………… 5-205.11.7 Illegal or Brand-damaging Transactions …………………………………… 5-215.12 Security Rules ……………………………………………………………………………….. 5-215.12.1 Sale or Exchange of Information …………………………………………….. 5-225.12.2 Data Storage Entity Identification ……………………………………………. 5-225.12.2.1 DSE Registration Requirements ………………………………………. 5-225.13 Discounts or Other Benefits at the Point of Interaction …………………….. 5-22Compliance Zones ………………………………………………………………………………… 5-23Merchants and Sales Transactions5.1 The Merchant Agreement©1969–2010 MasterCardMasterCard Rules • 10 December 2010 5-15.1 The Merchant AgreementEach Member in its capacity as an Acquirer must directly enter into a writtenMerchant Agreement with each Merchant from which it acquires Transactions,whether such Transactions are submitted to the Member directly by theMerchant or through a Member Service Provider acting for or on behalf of suchMember.An Acquirer shall not submit into interchange any Transaction resulting fromthe acceptance of a Card by an entity or person except pursuant to a MerchantAgreement then in effect between the Acquirer and the entity or person.The Merchant Agreement must reflect the Acquirer’s primary responsibility forthe Merchant relationship and must otherwise comply with the Standards.5.1.1 Verify Bona Fide Business OperationBefore entering into, extending, or renewing a Merchant Agreement, anAcquirer must verify that the Merchant from which it intends to acquireTransactions is a bona fide business, has sufficient safeguards in place toprotect from unauthorized disclosure or use such Cardholder and Transactioninformation as the Standards permit to be captured, and complies withapplicable laws, and that each Transaction will reflect bona fide businessbetween the Merchant or Sub-merchant and a Cardholder. Procedures forverifying that a Merchant is a bona fide business are set forth in section 7.1 ofthe Security Rules and Procedures manual.5.1.2 Required TermsEach Merchant Agreement must contain the substance of each of the Standardsset forth in Rules 5.6 through 5.12. Furthermore, each Merchant Agreementwith a gambling Merchant must incorporate the requirements set forth insection 2.5.4 of the Chargeback Guide. The failure to include the substance ofany one or more of such Standards in the Merchant Agreement or the grant ofa variance by the Corporation with respect to any one or more such Standardsdoes not relieve an Acquirer from responsibility for chargebacks orcompliance.Each Merchant Agreement may contain only such terms agreed to by theAcquirer and the Merchant, provided that no such term conflicts with anyStandard.Merchants and Sales Transactions5.2 Acquirer Obligations5-2©1969–2010 MasterCard10 December 2010 • MasterCard RulesEach Merchant Agreement with a Merchant registered as a Payment Facilitatormust additionally contain the substance of Rule 5.5 and a provision stating thatthe Payment Facilitator accepts financial liability for all Transactions enteredinto interchange on behalf of its Sub-merchants and will be responsible for thehandling of all disputed Transactions, credits, and customer service-relatedexpenses. The Merchant Agreement must provide for:1. The Acquirer’s right to terminate the Payment Facilitator, and2. The Payment Facilitator’s obligation to ensure the ongoing compliance ofeach of its Sub-merchants with the Standards and3. The Payment Facilitator’s obligation to terminate the written agreementwith a Sub-merchant for the conduct of activity deemed by the PaymentFacilitator, its Acquirer, or the Corporation to be in violation of theStandards.Note Additions to this Rule appear in Chapter 10a, “New Zealand Rules”; Chapter 12,“Europe Region Rules”; Chapter 14a, “South Africa Rules”; and Chapter 15a,“United States Region Debit-related Rules.”5.1.3 Assessments for Merchant Agreement NoncomplianceAn Acquirer in violation of Rule 5.1 may be assessed up to USD 2,500 per daywith respect to each entity or person on whose behalf the Acquirer submitsTransactions into interchange with no Merchant Agreement being in effectbetween the Acquirer and the entity or person, retroactive to the first day ofsuch noncompliant practice.5.2 Acquirer ObligationsAn Acquirer must satisfy all of the obligations set forth in this Rule 5.2.5.2.1 Acquiring TransactionsEach Acquirer must acquire all Transactions properly presented to it from eachof its Merchants on such terms as set forth in the Merchant Agreement.Merchants and Sales Transactions5.2 Acquirer Obligations©1969–2010 MasterCardMasterCard Rules • 10 December 2010 5-35.2.2 Merchant and Sub-merchant Compliance with theStandardsThe Acquirer is responsible for ensuring that each of its Merchants complieswith the Standards, and the Acquirer is itself responsible to the Corporationand to other Members for any Merchant’s or Sub-merchant’s failure to do so.The Acquirer must take such actions that may be necessary or appropriate toensure a Merchant’s or Sub-merchant’s ongoing compliance with the Standards.Failure by a Merchant, Sub-merchant, or Acquirer to comply with any Standardmay result in chargebacks, an assessment to the Acquirer, and/or otherdisciplinary action.5.2.3 Merchant InformationThe Acquirer must maintain, on an ongoing basis, the names and addresses ofevery Merchant participating in the Acquirer’s Program and promptly supplythe Corporation with any such information upon request.5.2.4 Payments to MerchantsEach Acquirer must pay each Merchant for all Transactions the Acquireracquires from the Merchant in accordance with the Merchant Agreement andthe Standards. This obligation is not discharged with regard to a Transactionuntil the Merchant receives payment from the Acquirer that acquired theTransaction, notwithstanding any Acquirer payment arrangement, includingany such arrangement between an Affiliate Member and a Class A Member. AMerchant Agreement may provide for an Acquirer to withhold amounts forchargeback reserves or similar purposes in accordance with the Standards.Note An addition to this Rule appears in Chapter 11, “Canada Region Rules.”5.2.5 Supplying MaterialsEach Acquirer must regularly ensure that each of its Merchants is providedwith all materials necessary to effect Transactions in accordance with theStandards and to signify MasterCard acceptance. These materials may includesales slips, credit slips, terminals, authorization services, MasterCard acceptancedecals, signage, and the like.Note An addition to this Rule appears in Chapter 15a, “United States Region DebitrelatedRules.”Merchants and Sales Transactions5.3 Merchant Monitoring5-4©1969–2010 MasterCard10 December 2010 • MasterCard Rules5.3 Merchant MonitoringEach Acquirer must monitor on an ongoing basis the Activity and use of theMarks of each of its Merchants for the purpose of deterring fraudulent andother wrongful activity and to ensure ongoing compliance with the Standards.Minimum Merchant monitoring Standards are set forth in the Security Rulesand Procedures manual.5.4 Use of a Payment FacilitatorThe Acquirer is liable for all acts and omissions by a Payment Facilitator andany Sub-merchant.A Payment Facilitator may not be a Sub-merchant of any other PaymentFacilitator, nor may a Payment Facilitator be a Payment Facilitator for anotherPayment Facilitator.Unless otherwise approved by the Corporation, any Sub-merchant that exceedsUSD 100,000 in annual sales may not be or continue to be a Sub-merchant andmust enter into a Merchant Agreement directly with a Member.5.4.1 Responsibility for Payment Facilitator and Sub-merchantActivityThe Acquirer is responsible for the Activity of the Payment Facilitator and eachof its Sub-merchants, and must comply with all of the following obligationsrelated to such Activity:1. The Payment Facilitator and each of its Sub-merchants must be locatedwithin the Acquirer’s licensed Area of Use as described in Rule 2.3. TheAcquirer must obtain an Extension of Area of Use of its license if either islocated elsewhere, except as provided in parts 5, 6, 7 and 8 of Rule 2.4.The location of the Sub-merchant determines the location of a Transaction,not the location of the Payment Facilitator.2. Settlement funds accessed by the Payment Facilitator may only be used topay Sub-merchants.Merchants and Sales Transactions5.4 Use of a Payment Facilitator©1969–2010 MasterCardMasterCard Rules • 10 December 2010 5-53. An Acquirer may permit a Payment Facilitator to manage the following onbehalf of the Acquirer:a. Verification that a Sub-merchant is a bona fide business operation, asset forth in Rule 5.5.1, except that the Acquirer itself must make aMATCH system inquiry about a prospective Sub-merchant prior to thePayment Facilitator entering into an agreement with the Sub-merchant;andb. Retention of records concerning the investigation of any of its Submerchants,provided that such records are provided to the Acquirerimmediately upon request; andc. Payment to a Sub-merchant for Transactions by the Sub-merchant, asset forth in Rule 5.5.4.4; andd. Ensuring that a Sub-merchant is supplied with materials necessary toeffect Transactions as set forth in Rule 5.5.4.5; ande. Monitoring a Sub-merchant’s Activity on an ongoing basis to deterfraud or other wrongful activity, as set forth in Rule 5.5.4.6.4. Neither the Payment Facilitator nor the Sub-merchant may require aCardholder to waive a right to dispute a transaction.5. The Acquirer must ensure that all Sub-merchants are identified with theCard acceptor business code (MCC) that most closely reflects the Submerchant’sprimary business, as set forth in the Quick Reference Booklet.The Corporation shall have the ultimate authority to dictate the appropriateMCC if any dispute shall arise. MCC 7995 must be assigned to any Submerchantthat sells gambling chips or other value usable for gambling,even if such sales is a minimal part of the Sub-merchant’s business.(Alternatively, multiple MCCs may be used as appropriate.)6. The Acquirer must provide to the Corporation a quarterly Activity reportfor each Sub-merchant of the Payment Facilitator that includes:a. Sub-merchant name and location as appears in DE 43 (Card AcceptorName/Location) of clearing recordsb. Sub-merchant “doing business as” name or URLc. Sub-merchant MCC(s)d. Transaction sales count and amount for each MCCe. Transaction chargeback count and amount for each MCCMerchants and Sales Transactions5.4 Use of a Payment Facilitator5-6©1969–2010 MasterCard10 December 2010 • MasterCard Rules5.4.2 High-Risk Payment FacilitatorsA Payment Facilitator that proposes to sponsor as Sub-merchants one or moreentities conducting business that may be described under any one of thefollowing MCCs or any entity that, as a Merchant, was reported under theExcessive Chargeback Program is deemed by the Corporation to be a “High-Risk Payment Facilitator”:• Telecom merchants—MCCs 4813, 4814, 4816, and 5967• Electronic commerce (e-commerce) adult content (videotext) merchants—MCCs 5967, 7273, and 7841• Non–face-to-face gambling merchants—MCC 7995• Non–face-to-face prescription drug merchants—MCC 5122 and MCC 5912• Non–face-to-face tobacco product merchants—MCC 5993The acquirer must register each such entity in the MasterCard RegistrationSystem (MRP) via MasterCard OnLine before accepting Transactions arisingfrom such entity, whether directly or through a Payment Facilitator, asdescribed in chapter 9 of the Security Rules and Procedures manual.The Corporation, in its sole discretion, may de-register a Payment Facilitator ifit or any of its Sub-merchants is identified as generating excessive chargebacksor fraudulent activity or of violating any Standard or applicable law.The Corporation reserves the right to de-register a Payment Facilitator or Submerchantthat in the opinion of the Corporation, participates in any activitythat may cause damage to the Corporation.Each Acquirer that has entered into a Merchant Agreement with a High-RiskPayment Facilitator must ensure that the Corporation receives a monthly SubmerchantActivity report that provides the information set forth in Rule 5.4.1,part 6.The Merchant monitoring requirements set forth in section 9.3 of the SecurityRules and Procedures manual apply to High-Risk Payment Facilitators.Merchants and Sales Transactions5.4 Use of a Payment Facilitator©1969–2010 MasterCardMasterCard Rules • 10 December 2010 5-75.4.3 Registration Requirements for Payment FacilitatorsTo propose a Merchant for registration as a Payment Facilitator, the Acquirermust:• be a Member in good standing with the Corporation, and• meet any and all capital requirements designated by the Corporation, and• if the entity is deemed to be a potential High-Risk Payment Facilitator, bein good standing with all of the Corporation’s risk management programs.To register a Merchant as a Payment Facilitator, the Acquirer must:1. Submit all information and material required by the Corporation inconnection with the proposed registration within 60 calendar days of theregistration application submission date; and2. Ensure that the Payment Facilitator is compliant with the MasterCard SiteData Protection (SDP) Program in accordance with the implementationschedule applicable to Merchants set forth in section 10.3.4 of the SecurityRules and Procedures manual. Before initiating registration, the Membermust instruct the proposed Payment Facilitator to contact the Corporationvia e-mail at sdp@mastercard.com and validate its compliance with the SDPProgram using the tools described in section 10.3.2 of the Security Rulesand Procedures manual, or if the proposed Payment Facilitator is notcompliant, provide a Corporation-approved compliance action plan. ACorporation-approved compliance action plan does not exempt theAcquirer or its Sponsoring Class A Member if applicable from responsibilityand liability that arises from the noncompliance of the Payment Facilitatoror any of its sponsored Sub-merchants with any Standard, including thoserelating to the disclosure and securing of Cardholder account andTransaction data.The Acquirer or if an Affiliate Member, its sponsoring Class A Member, mustuse the MasterCard Registration Program (MRP) system on MasterCard OnLineto complete the registration procedure.The Acquirer must receive the Corporation’s written or e-mail confirmation ofthe Payment Facilitator’s registration before the Acquirer may submitTransactions from the Payment Facilitator or any of its Sub-merchants intointerchange. In its sole discretion, the Corporation may approve or may rejectany application for the registration of a Payment Facilitator.Merchants and Sales Transactions5.5 Payment Facilitator Obligations5-8©1969–2010 MasterCard10 December 2010 • MasterCard RulesTo maintain the registration of a Payment Facilitator, the Acquirer must submitsuch information and material as may be required by the Corporation fromtime to time, including but not limited to a copy of the agreement between theAcquirer and Payment Facilitator. In its sole discretion, the Corporation maydecline to renew the registration of a Payment Facilitator.The Corporation will collect all registration, renewal and any other applicablefee(s) then in effect, if any, from the Acquirer or if an Affiliate Member, itsSponsoring Class A Member via the MasterCard Consolidated Billing System(MCBS).If the Acquirer ceases to accept Sub-merchant Transactions from or terminatesa Payment Facilitator, the Acquirer must notify the Corporation of the date andreasons for such action within one week of the decision. In its sole discretion,the Corporation may require an Acquirer to cease to accept Sub-merchantTransactions from a Payment Facilitator at any time.5.5 Payment Facilitator ObligationsA Payment Facilitator is a Merchant and has all of the rights andresponsibilities of a Merchant under the Standards.The Acquirer must ensure that its Payment Facilitator satisfies all of theobligations set forth in this Rule 5.5.5.5.1 Sub-merchant Screening ProceduresBefore entering into, extending, or renewing an agreement with a Submerchant,a Payment Facilitator must verify that the entity is a bona fidebusiness, has sufficient safeguards in place to protect Cardholder andTransaction information permitted by the Standards to be captured fromunauthorized disclosure or use, complies with applicable laws, and that eachTransaction submitted by the Sub-merchant will reflect bona fide businessbetween the Sub-merchant and a Cardholder.In determining whether the entity is a bona fide business, the PaymentFacilitator must verify, at a minimum, that all of the following have beencompleted:1. Credit check, background investigations, and reference checks of the Submerchant.If the credit check raises questions or does not providesufficient information, the Payment Facilitator also should conduct a creditcheck of:a. the owner, if the entity is a sole proprietorb. the partners, if the entity is a partnershipMerchants and Sales Transactions5.5 Payment Facilitator Obligations©1969–2010 MasterCardMasterCard Rules • 10 December 2010 5-9c. the principal shareholders, if the entity is a corporation2. Inspection of the entity’s premises or Web sites and records to ensure thatit has the proper facilities, equipment, inventory, agreements, andpersonnel required and if necessary, license or permit and othercapabilities to conduct business. If the entity has more than one set ofpremises or Web site, the Payment Facilitator must inspect at least one ofthem.The Payment Facilitator must retain all records concerning the investigation ofany entity with which it has entered into a Sub-merchant agreement for aminimum of two years after the date the agreement is terminated or expires.5.5.2 MATCH Inquiry RequiredBefore entering into, extending, or renewing an agreement with a Submerchant,the Payment Facilitator must request that its Acquirer make aninquiry to the MasterCard Member Alert to Control (High-risk) Merchants(MATCH) system. The Acquirer must ensure that the Payment Facilitator doesnot sponsor as a Sub-merchant any entity listed on the MATCH system ashaving been terminated for a reason described in section 11.5.1 of the SecurityRules and Procedures manual.The Acquirer must add each Sub-merchant terminated for any such reason tothe MATCH system per section 11.2.2 of the Security Rules and Proceduresmanual.5.5.3 Sub-merchant AgreementEach Payment Facilitator must enter into a written agreement with each Submerchantwhich sets forth the terms applicable to the Sub-merchant’sacceptance of Cards and otherwise complies with this Rule 5.5.3.The Sub-merchant agreement must not interfere with or lessen the right of thePayment Facilitator, the Acquirer, or the Corporation to terminate theagreement at any time. The Corporation reserves the right to restrict aPayment Facilitator from entering into a Sub-merchant agreement based on thebusiness of the entity or other criteria as the Corporation deems appropriate.Merchants and Sales Transactions5.5 Payment Facilitator Obligations5-10©1969–2010 MasterCard10 December 2010 • MasterCard Rules5.5.3.1 Required ProvisionsEach agreement between a Payment Facilitator and its sponsored Submerchantmust contain the substance of each of the Standards set forth inRules 5.6 through 5.12, and specify that these Standards are applicable to Submerchantsto the same extent as to Merchants. The failure of the PaymentFacilitator to include the substance of any one or more of such Standards inthe Sub-merchant agreement or the grant of a variance by the Corporation withrespect to any one or more such Standards does not relieve an Acquirer fromresponsibility for chargebacks or compliance related to the Activity of or use ofthe Marks by the Sub-merchant.The Sub-merchant agreement must, in substance, include all of the followingprovisions:1. On an ongoing basis, the Sub-merchant is promptly to provide thePayment Facilitator with the current address of each of its offices, all“doing business as” (DBA) names used by the Sub-merchant, and acomplete description of goods sold and services provided to members.2. In the event of any inconsistency between any provision of the Submerchantagreement and the Standards, the Standards will govern.3. The Payment Facilitator is responsible for the Card acceptance policies andprocedures of the Sub-merchant, and may require any changes to its Website or otherwise that it deems necessary or appropriate to ensure that theSub-merchant remains in compliance with the Standards governing the useof the Marks.4. The Sub-merchant agreement automatically and immediately terminates ifthe Corporation de-registers the Payment Facilitator or if the PaymentFacilitator’s Acquirer ceases to be a Member for any reason or if suchAcquirer fails to have a valid License with the Corporation to use any Markaccepted by the Sub-merchant.5. The Payment Facilitator may, at its discretion or at the direction of itsAcquirer or the Corporation, immediately terminate the Sub-merchantagreement for activity deemed to be fraudulent or otherwise wrongful bythe Payment Facilitator, its Acquirer, or the Corporation.6. The Sub-merchant acknowledges and agrees:a. to comply with all applicable Standards, as amended from time to time;b. that the Corporation is the sole and exclusive owner of the Marks;c. not to contest the ownership of the Marks for any reason;d. the Corporation may at any time, immediately and without advancenotice, prohibit the Sub-merchant from using any of the Marks for anyreason;Merchants and Sales Transactions5.5 Payment Facilitator Obligations©1969–2010 MasterCardMasterCard Rules • 10 December 2010 5-11e. the Corporation has the right to enforce any provision of the Standardsand to prohibit the Sub-merchant and/or its Payment Facilitator fromengaging in any conduct the Corporation deems could injure or couldcreate a risk of injury to the Corporation, including injury to reputation,or that could adversely affect the integrity of the Interchange System,the Corporation’s Confidential Information as defined in the Standards,or both; andf. the Sub-merchant will not take any action that could interfere with orprevent the exercise of this right by the Corporation.The Sub-merchant agreement must not contain any terms that conflict with anyStandard.5.5.4 Obligations as Sponsor of Sub-merchantsA Payment Facilitator must fulfill all of the following obligations with respect toeach of its Sub-merchants.5.5.4.1 Submit Valid TransactionsThe Payment Facilitator must submit to its Acquirer records of validTransactions submitted by a Sub-merchant and involving a bona fideCardholder. The Payment Facilitator must not submit to its Acquirer anyTransaction that the Payment Facilitator or the Sub-merchant knows or shouldhave known to be fraudulent or not authorized by the Cardholder, or thateither knows or should have known to be authorized by a Cardholdercolluding with the Sub-merchant for a fraudulent purpose. For purposes ofthis Rule, the Sub-merchant is deemed to be responsible for the conduct of itsemployees, agents, and representatives.5.5.4.2 Sub-merchant Compliance with the StandardsThe Payment Facilitator is responsible for ensuring that each of its Submerchantscomplies with the Standards, including but not limited to the Cardacceptance requirements set forth in Rule 5.6. The Payment Facilitator musttake such actions that may be necessary or appropriate to ensure the Submerchant’songoing compliance with the Standards.5.5.4.3 Maintaining Sub-merchant InformationThe Payment Facilitator must maintain, on an ongoing basis, the names,addresses, and URLs if applicable of each of its Sub-merchants. The Acquirermust ensure that the Payment Facilitator promptly supplies the Corporationwith any such information upon request.Merchants and Sales Transactions5.6 Merchant Identification and Responsibility for Transactions5-12©1969–2010 MasterCard10 December 2010 • MasterCard Rules5.5.4.4 Payments to Sub-merchantsEach Payment Facilitator must pay each Sub-merchant for all Transactions thePayment Facilitator submits to its Acquirer on the Sub-merchant’s behalf. Thisobligation is not discharged with regard to a Transaction until the Submerchantreceives payment from the Payment Facilitator with which the Submerchanthas entered into an agreement, notwithstanding any paymentarrangement between the Sub-merchant and the Payment Facilitator orbetween the Payment Facilitator and its Acquirer. A Sub-merchant agreementmay provide for a Payment Facilitator to withhold amounts for chargebackreserves or similar purposes.5.5.4.5 Supplying Materials to Sub-merchantsEach Payment Facilitator must regularly ensure that each of its Sub-merchantsis provided with all materials necessary to effect Transactions in accordancewith the Standards and to signify MasterCard acceptance. These materials mayinclude sales slips, credit slips, terminals, authorization services, MasterCardacceptance decals, signage, and the like.5.5.4.6 Sub-merchant MonitoringEach Payment Facilitator must monitor on an ongoing basis the Activity anduse of the Marks of each of its Sub-merchants for the purpose of deterringfraudulent and other wrongful activity and to ensure ongoing compliance withthe Standards. For purposes of this Rule, the minimum Merchant monitoringStandards set forth in the Security Rules and Procedures manual apply withrespect to Sub-merchants.5.6 Merchant Identification and Responsibility forTransactionsAn Acquirer must ensure that each of its Merchants prominently andunequivocally informs the Cardholder of the identity of the Merchant at allpoints of interaction, so that the Cardholder readily can distinguish theMerchant from any other party, such as a supplier of products or services tothe Merchant. A Merchant Web site must:1. Prominently display the name of the Merchant;2. Prominently identify the name of the Merchant as displayed on the Website as both the Merchant and as the name that will appear on theCardholder statement; andMerchants and Sales Transactions5.7 Use of the Marks©1969–2010 MasterCardMasterCard Rules • 10 December 2010 5-133. Display Merchant name information as prominently as any otherinformation depicted on the Web site, other than images of the products orservices being offered for sale.If the Cardholder is linked to a Payment Facilitator’s Web site from a Submerchant’sWeb site for payment, the name of the Payment Facilitator mustappear in DE 43 (Card Acceptor Name/Location), subfield 1 (Card AcceptorName) in conjunction with the name of the Sub-merchant. If the Cardholderaccesses the Payment Facilitator’s Web site directly, and its name is visible tothe Cardholder throughout Transaction from selection of goods and/or servicesto the completion of the checkout process, then the Payment Facilitator’s namemay appear in DE 43 without the name of the Sub-merchant. For Card-presentTransactions, both the Payment Facilitator name and the Sub-merchant namemust appear in DE 43, unless only the name of the Payment Facilitator isknown to the Cardholder.A Merchant must ensure that the Cardholder understands that the Merchant isresponsible for the Transaction, including delivery of the products (whetherphysical or digital) or provision of the services that are the subject of theTransaction, and for customer service and dispute resolution, all in accordancewith the terms applicable to the Transaction.5.7 Use of the MarksA Merchant is only permitted to use a Mark in accordance with a MerchantAgreement with its Acquirer. The Merchant Agreement must provide that:1. Any use of a Mark by a Merchant in acceptance advertising, acceptancedecals, or signs, must be in accordance with the Standards, including theCorporation’s reproduction, usage, and artwork Standards, as may be ineffect from time to time; and2. The Merchant’s use or display of any Mark will terminate effective with thetermination of the Merchant Agreement or upon notification by theCorporation to discontinue such use or display.The Acquirer must ensure that its Merchant1. Uses or displays the Marks in accordance with the Standards and2. Ceases all use of the Marks and promptly returns any materials displayingthe Marks immediately upon termination of the Merchant Agreement ornotification by the Corporation to discontinue such use.The use or display of any Mark does not give a Merchant any ownership orinterest in the Mark.Merchants and Sales Transactions5.7 Use of the Marks5-14©1969–2010 MasterCard10 December 2010 • MasterCard Rules5.7.1 Merchants Must Display the MasterCard AcceptanceMarkAn Acquirer must ensure that all of its Merchants prominently display theMasterCard Acceptance Mark at the point of interaction to indicate that theMerchant accepts Cards. No other Mark or mark may be used for thispurpose.An Acquirer must ensure that each of its remote services Merchants display theMasterCard Acceptance Mark wherever payment options are presented. AnAcquirer must provide its Merchants with the appropriate artwork in a formatauthorized by the Corporation. A Mark may not appear on the Web site of asupplier to a Merchant or of any other entity that is not itself a Merchant (suchas, by way of example and not limitation, an entity that is contracted by theMerchant to deliver the products or provide the services that are subject of theTransaction).The MasterCard Acceptance Mark must be clearly visible to the public at thepoint of interaction. The preferred location to post the MasterCard AcceptanceMark at a physical point of interaction is the entrance, nearby window or doorof the Merchant or location, and on the first screen of an electronic point ofinteraction. Where it is not possible to post signage at the entrance of theMerchant or location, posting the MasterCard Acceptance Mark so that it caneasily and readily be seen within the location will satisfy the requirement.Where it is not possible to post the MasterCard Acceptance Mark on the firstscreen of an electronic point of interaction, posting the MasterCard AcceptanceMark on the payment screen will satisfy the requirement.5.7.2 Merchant Advertising and POI MaterialsA Merchant may use the MasterCard Acceptance Mark in material or images atthe physical or electronic point of interaction to indicate acceptance.Other acceptance marks, symbols, logos, or combinations thereof may appearin the same material or image with the MasterCard Acceptance Mark, if noother acceptance mark, symbol, or logo is more prominent or likely to causeconfusion concerning the acceptance of Cards.5.7.3 Local/Regional Acceptance BrandsThe MasterCard Acceptance Mark must be displayed as a free-standing mark,and, as such, may not be displayed so as to suggest that it is either asecondary means of payment to a local/regional acceptance brand, orexclusively linked to a local/regional acceptance brand.Merchants and Sales Transactions5.7 Use of the Marks©1969–2010 MasterCardMasterCard Rules • 10 December 2010 5-15Visual parity must be maintained between the MasterCard Acceptance Markand any local/regional acceptance mark also displayed at a point of interactionor in Merchant advertising.5.7.4 Direct Mail Cardholder Solicitation MerchantsEach Merchant Agreement with a Direct Mail Cardholder Solicitation Merchantshall contain the entire following provision:“Merchant acknowledges that the trademark ‘MasterCard’ and thecorresponding logotype are the property of MasterCard InternationalIncorporated (herein, “the Corporation”). Merchant shall not infringe upon themark or logo, nor otherwise use the mark or logo in such a manner as tocreate the impression Merchant’s products or services are sponsored,produced, affiliated with, offered, or sold by this Corporation.“Merchant shall not use the mark or logo on its stationery, letterhead,envelopes, or the like nor in its solicitation; provided, however, that Merchantmay use one of the mark or logo in close proximity to the payment orenrollment space in the solicitation in a size not to exceed 1 1/4 inches inhorizontal length if a logo is employed, or, if a mark is used, in type not toexceed the size of the type used in the major portion of the text on the samepage; provided further that the legend, ‘Accepted for Payment’ mustaccompany the mark or logo used and must be the equivalent size of the markor logo. In no case, however, shall Merchant use any of the logo on the frontor first page of its solicitation. One truthful statement that Merchant isdirecting or limiting its offer to MasterCard cardholders may appear in thebody of the solicitation, other than in close proximity to the payment orenrollment space, subject to the limitation that:1. only the word mark may be used;2. the word mark may nota. exceed in type size the size of any other type on the same page,b. differ in color from the type used in the text (as differentiated from thetitles) on the same page,c. be as large or as prominent as the name of Merchant,d. be the first item appearing on any page, nore. in any other way be the most prominent element of the page;3. Merchant’s name and/or logo must appear prominently on the same pageas the mark; andMerchants and Sales Transactions5.8 Card Acceptance Requirements5-16©1969–2010 MasterCard10 December 2010 • MasterCard Rules4. the following disclaimer must appear in close proximity to the mark on thesame page and in an equal size and type of print:“MasterCard International Incorporated is not affiliated in any way with[Merchant] and has not endorsed or sponsored this offer.”“Merchant further agrees to submit its first direct mail solicitation(s), prior tomailing, to the MasterCard Law Department, to be reviewed only forcompliance with this Corporation’s trademark rules and shall furthermore notdistribute in any manner such solicitations until Merchant shall have obtainedthis Corporation’s written approval of the manner in which it uses MasterCardmark and logo on such solicitations. Merchant shall likewise, upon request,submit to the Corporation any amended solicitations prior to mailing.”5.8 Card Acceptance RequirementsAn Acquirer must ensure that each of its Merchants complies with the Cardacceptance requirements set forth in this Rule 5.8 and in section 2.1 of theChargeback Guide.5.8.1 Honor All CardsA Merchant must honor all valid Cards without discrimination when properlypresented for payment. A Merchant must maintain a policy that does notdiscriminate among customers seeking to make purchases with a Card. AMerchant that does not deal with the public at large (for example, a privateclub) is considered to comply with this rule if it honors all valid and properlypresented Cards of Cardholders that have purchasing privileges with theMerchant.Note Variations to this Rule appear in Chapter 10a, “New Zealand Rules”; Chapter11a, “Canada Region Code of Conduct Related Rules’; Chapter 12a, “EuropeRegion Debit-related Rules”; Chapter 14a, “South Africa Rules”; and Chapter15a, “United States Region Debit-related Rules.”*chg*Merchants and Sales Transactions5.8 Card Acceptance Requirements©1969–2010 MasterCardMasterCard Rules • 10 December 2010 5-175.8.2 Merchant AcceptanceNote A Rule on this topic appears in Chapter 10a, “New Zealand Rules”; Chapter 12,“Europe Region Rules”; Chapter 14a, “South Africa Rules”; and Chapter 15a,“United States Region Debit-related Rules.” A variation to the Europe RegionRule appears in Chapter 12a, “Europe Region Debit-related Rules.”5.8.3 Obtain an AuthorizationWhen required by the Standards or by the Acquirer, the Merchant must obtainan authorization before completing a Transaction.For specific Merchant authorization requirements, refer to sections 2.1.2through 2.1.5 of the Chargeback Guide.5.8.4 Additional Cardholder IdentificationA Merchant must not refuse to complete a Transaction solely because aCardholder who has complied with the conditions for presentment of a Card atthe POI refuses to provide additional identification information, except asspecifically permitted or required by the Standards. A Merchant may requireadditional identification from the Cardholder if the information is required tocomplete the Transaction, such as for shipping purposes. A Merchant in acountry or region that supports use of the MasterCard Address VerificationService (AVS) may require the Cardholder’s ZIP or postal code to complete aCardholder-Activated Terminal (CAT) Transaction, or the Cardholder’s addressand ZIP or postal code to complete a mail order, phone order, or e-commerceTransaction.5.8.5 E-Commerce TransactionsA Merchant must not refuse to complete an e-commerce Transaction solelybecause the Cardholder does not have a digital certificate or other securedprotocol.5.8.6 Purchase With Cash Back TransactionsRefer to sections 2.1.12 and 2.4 of the Chargeback Guide for purchase withcash back Transaction requirements.*chg*Merchants and Sales Transactions5.9 Submitting Transactions5-18©1969–2010 MasterCard10 December 2010 • MasterCard RulesNote Variations to this Rule appear in Chapter 12, “Europe Region Rules”; Chapter14b, “India Rules”; and Chapter 15, “United States Region Rules.”5.9 Submitting TransactionsAn Acquirer must ensure that each of its Merchants comply with therequirements for submitting Transactions to the Acquirer set forth in this Rule5.9.5.9.1 Valid TransactionsA Merchant must submit to its Acquirer records of valid Transactions onlybetween the Merchant and a bona fide Cardholder.A Merchant must not submit to its Acquirer a Transaction that the Merchantknows or should have known to be fraudulent or not authorized by theCardholder, or that it knows or should have known to be authorized by aCardholder colluding with the Merchant for a fraudulent purpose. Forpurposes of this Rule, the Merchant is deemed to be responsible for theconduct of its employees, agents, and representatives.5.9.2 Submit Transactions within Three Business DaysA Merchant must submit records of valid Transactions to its Acquirer no laterthan three bank business days after the Transaction date, except:1. The record must not be presented until after the products are shipped orthe services are performed unless, at the time of the Transaction, theCardholder agrees to a properly disclosed delayed delivery of the productsor services.2. When the Merchant receives Cardholder authorization for a delayedpresentment (in which case the words “Delayed Presentment” must benoted on the Transaction Information Document [TID]).3. When the Merchant is obligated by law to retain the TID or return it to abuyer upon timely cancellation, in which case the Merchant should presentthe record within 10 business days after the Transaction date.4. When the Merchant has multiple locations and uses a central facility toaccumulate and present records to the Acquirer, in which event theMerchant must present the record in accordance with applicable law and,in any event, within 30 calendar days of the Transaction date.Merchants and Sales Transactions5.10 Noncompliance Assessments©1969–2010 MasterCardMasterCard Rules • 10 December 2010 5-195.10 Noncompliance AssessmentsIf the Corporation becomes aware of a Merchant’s noncompliance with anyStandard, the Corporation may notify the Acquirer of such noncompliance andmay assess the Acquirer, and the Acquirer must promptly cause the Merchantto discontinue the noncompliant practice. A notification by the Corporationwith respect to at any one location of a Merchant requires the Acquirer toensure that the Merchant is in compliance with the Standards at all locations ofthe Merchant that are subject to the Merchant Agreement(s).A Member may request that the Corporation’s Secretary review an assessmentfor a Merchant’s noncompliance with a Standard.5.11 Prohibited PracticesAn Acquirer must ensure that none of its Merchants engage in any of theprohibited practices set forth in this Rule 5.11.5.11.1 DiscriminationA Merchant must not engage in any acceptance practice that discriminatesagainst or discourages the use of a Card in favor of any other acceptancebrand.Note An addition to this Rule appears in Chapter 10a, “New Zealand Rules.”5.11.2 Charges to CardholdersA Merchant must not directly or indirectly require any Cardholder to pay asurcharge or any part of any Merchant discount or any contemporaneousfinance charge in connection with a Transaction. A Merchant may provide adiscount to its customers for cash payments. A Merchant is permitted tocharge a fee (such as a bona fide commission, postage, expedited service orconvenience fees, and the like) if the fee is imposed on all like transactionsregardless of the form of payment used, or as the Corporation has expresslypermitted in writing. For purposes of this Rule:1. A surcharge is any fee charged in connection with a Transaction that is notcharged if another payment method is used.2. The Merchant discount fee is any fee a Merchant pays to an Acquirer sothat the Acquirer will acquire the Transactions of the Merchant.Merchants and Sales Transactions5.11 Prohibited Practices5-20©1969–2010 MasterCard10 December 2010 • MasterCard RulesNote Variations to this Rule appear in Chapter 10a, “New Zealand Rules,” Chapter11a, “Canada Region Code of Conduct Related Rules,” and Chapter 12, “EuropeRegion Rules.”5.11.3 Minimum/Maximum Transaction Amount ProhibitedA Merchant must not require, or indicate that it requires, a minimum ormaximum Transaction amount to accept a valid and properly presented Card.Note A variation to this Rule appears in Chapter 10, “Asia/Pacific Region Rules”;Chapter 13, “Latin America and the Caribbean Region Rules”; and Chapter 15,“United States Region Rules.”5.11.4 Scrip-dispensing TerminalsCards must not be accepted at terminals that dispense scrip.5.11.5 Prohibited TransactionsA Merchant must not submit for payment into interchange, and a Member mustnot accept from a Merchant for submission into interchange, any Transactionthat:1. Represents the refinancing or transfer of an existing Cardholder obligationthat is deemed to be uncollectible, or2. Arises from the dishonor of a Cardholder’s personal check, or3. Arises from the acceptance of a Card at a terminal that dispenses scrip.5.11.6 Other Forms of PaymentA Merchant must not accept any payment from a customer in any other form(for example, cash or check) with respect to a charge for products or servicesreflected on a TID resulting from the use of a Card. A Merchant also must notaccept a Card as payment for products or services for which the Merchant hasreceived or expects to receive payment in any other form, whether from thecustomer or a third party.*chg**chg*Merchants and Sales Transactions5.12 Security Rules©1969–2010 MasterCardMasterCard Rules • 10 December 2010 5-215.11.7 Illegal or Brand-damaging TransactionsA Merchant must not submit for payment into interchange, and an Acquirermust not accept from a Merchant for submission into interchange, anyTransaction that is illegal, or in the sole discretion of the Corporation, maydamage the goodwill of the Corporation or reflect negatively on the Marks.The Corporation considers any of the following activities to be in violation ofthis Rule:1. The sale or offer of sale of a product or service other than in fullcompliance with law then applicable to the Acquirer, Issuer, Merchant,Cardholder, Cards, or the Corporation.2. The sale of a product or service, including an image, which is patentlyoffensive and lacks serious artistic value (such as, by way of example andnot limitation, images of nonconsensual sexual behavior, sexualexploitation of a minor, nonconsensual mutilation of a person or bodypart, and bestiality), or any other material that the Corporation deemsunacceptable to sell in connection with a Mark.An Acquirer that has been notified of a Merchant’s noncompliance with thisRule and that fails promptly to cause the noncompliant practice to cease, orthat has been notified multiple times regarding violations of this Rule, issubject, at the Acquirer’s expense, and in addition to any other noncomplianceassessment or other discipline, or both, to any one or more of the following:1. A RAMP Level 3 review as described in the Security Rules and Proceduresmanual2. An audit at the sole expense of the Acquirer by a third party selected bythe Corporation, of the Acquirer’s acquiring practicesThe Corporation may list a Merchant which the Corporation determines isnoncompliant with this Rule on the MATCH system. (See chapter 11 of theSecurity Rules and Procedures manual.)5.12 Security RulesAn Acquirer must ensure that each of its Merchants and the Merchants’ DSEscomply with all of the requirements set forth in this Rule 5.12.Merchants and Sales Transactions5.13 Discounts or Other Benefits at the Point of Interaction5-22©1969–2010 MasterCard10 December 2010 • MasterCard Rules5.12.1 Sale or Exchange of InformationA Merchant must not sell, purchase, provide, exchange or in any mannerdisclose Card account number, Transaction, or personal information of orabout a Cardholder to anyone other than its Acquirer, to the Corporation, or inresponse to a valid government demand. This prohibition applies to Cardimprints, TIDs, carbon copies, mailing lists, tapes, database files, and all othermedia created or obtained as a result of a Transaction.5.12.2 Data Storage Entity IdentificationA Merchant must inform the Acquirer promptly of the identity of any DataStorage Entity (DSE) that the Merchant intends to afford access to Cardaccount, Cardholder, or Transaction information.The Acquirer must promptly register each entity that does or will provide DSEservices to any of the Member’s Merchants via the MasterCard RegistrationProgram system on MasterCard OnLine. In addition, the Acquirer must ensurethat such an entity complies with the following Rule.5.12.2.1 DSE Registration RequirementsA DSE must comply with the MasterCard Site Data Protection (SDP) Program inaccordance with the implementation schedule set forth in section 10.3.4 of theSecurity Rules and Procedures manual. Before the Acquirer initiatesregistration, the Acquirer’s Merchant must instruct the proposed DSE to contactthe Corporation via e-mail at sdp@mastercard.com and validate its compliancewith the SDP Program using the tools described in section 10.3.2 of theSecurity Rules and Procedures manual, or if the proposed DSE is notcompliant, provide a Corporation-approved compliance action plan. ACorporation-approved compliance action plan does not exempt the Class AMember from responsibility and liability that arises from the DSE’snoncompliance with any Standard relating to the disclosure and securing ofCardholder account and Transaction data.5.13 Discounts or Other Benefits at the Point ofInteractionNote A Rule on this topic appears in Chapter 10, “Asia/Pacific Region Rules”; Chapter11, “Canada Region Rules”; Chapter 12, “Europe Region Rules”; Chapter 13,“Latin America and the Caribbean Region Rules”; Chapter 14, “SouthAsia/Middle East/Africa Region Rules”; and Chapter 15, “United States RegionRules.”Merchants and Sales TransactionsCompliance Zones©1969–2010 MasterCardMasterCard Rules • 10 December 2010 5-23Compliance ZonesThe following table identifies the noncompliance category that the Corporationhas assigned to the Standards described within this chapter. Thesenoncompliance categories are assigned for the purposes of assessments underthe compliance framework described in Rule 3.1.2.Rule Number Rule Title Category5.1 The Merchant Agreement A5.2.1 Acquiring Transactions B5.2.2 Merchant and Sub-merchant Compliance with the Standards A5.2.3 Merchant Information B5.2.4 Payments to Merchants B5.2.5 Supplying Materials C5.3 Merchant Monitoring A5.4 Use of a Payment Facilitator A5.5 Payment Facilitator Obligations A5.5.1 Sub-merchant Screening Procedures A5.5.2 MATCH Inquiry Required A5.5.3 Sub-merchant Agreement A5.5.4.1 Submit Valid Transactions A5.5.4.2 Sub-merchant Compliance with the Standards A5.5.4.3 Maintaining Sub-merchant Information C5.5.4.4 Payments to Sub-merchants B5.5.4.5 Supplying Materials to Sub-merchants C5.5.4.6 Sub-merchant Monitoring A5.6 Merchant Identification and Responsibility for Transactions B5.7 Use of the Marks B5.8.1 Honor All Cards A5.8.2 Merchant Acceptance A5.8.3 Obtain an Authorization A5.8.4 Additional Cardholder Identification B5.8.5 E-commerce Transactions B5.8.6 Purchase With Cash Back Transactions B5.9.1 Valid Transactions AMerchants and Sales TransactionsCompliance Zones5-24©1969–2010 MasterCard10 December 2010 • MasterCard RulesRule Number Rule Title Category5.9.2 Submit Transactions Within Three Business Days C5.11.1 Discrimination B5.11.2 Charges to Cardholders B5.11.3 Minimum/Maximum Transaction Amount Prohibited B5.11.4 Scrip-dispensing Terminals A5.11.5 Prohibited Transactions A5.11.6 Other Forms of Payment A5.11.7 Illegal or Brand-damaging Transactions A5.12 Security Rules A5.13 Discounts or Other Benefits at the Point of Interaction B©1969–2010 MasterCardMasterCard Rules • 29 October 2010 6-i6 Special Issuer ProgramsThis chapter contains information about Special Issuer Programs.6.1 Special Issuer Programs—General Requirements …………………………………. 6-16.1.1 Prior Consent of the Corporation ……………………………………………….. 6-16.1.2 Reservation of Rights ………………………………………………………………… 6-16.1.3 Cardholder Communication ……………………………………………………….. 6-16.2 Affinity and Co-Brand Card Programs …………………………………………………. 6-26.2.1 Program Partners ………………………………………………………………………. 6-26.2.2 Ownership and Control of the Program ……………………………………… 6-26.2.3 Issuer Identification on Program Cards ……………………………………….. 6-36.2.4 Program Name …………………………………………………………………………. 6-46.2.5 Multiple Partners ………………………………………………………………………. 6-46.2.6 Accept All Cards without Discrimination …………………………………….. 6-46.2.7 Use of the MasterCard Acceptance Mark …………………………………….. 6-46.3 Brand Value Transactions and Proprietary Accounts ……………………………. 6-56.3.1 Proprietary Account Access ……………………………………………………….. 6-56.3.2 Fees and Reporting Requirements ………………………………………………. 6-66.4 Remote Transaction Accounts ……………………………………………………………. 6-66.4.1 Remote Transaction Account Requirements ………………………………… 6-76.4.1.1 Remote Transaction MasterCard M/Chip Account Programs …. 6-76.5 Secured Card Programs ……………………………………………………………………… 6-86.5.1 Secured Card Program Requirements ………………………………………….. 6-86.5.2 Refund of Fees …………………………………………………………………………. 6-86.5.3 Secured Card Program Solicitation and Disclosure Requirements ….. 6-86.6 Prepaid Card Programs ……………………………………………………………………… 6-9Compliance Zones ………………………………………………………………………………….. 6-9Special Issuer Programs6.1 Special Issuer Programs—General Requirements©1969–2010 MasterCardMasterCard Rules • 29 October 2010 6-16.1 Special Issuer Programs—General RequirementsThe Rules set forth in this Chapter 6 apply to Special Issuer Programs that theCorporation may identify as such from time to time.6.1.1 Prior Consent of the CorporationA Member may not conduct a Special Issuer Program without the express priorwritten consent of the Corporation and each Member must operate eachSpecial Issuer Program in accordance with the Standards as may be in effectfrom time to time. A Special Issuer Program name and Special Issuer ProgramCard design must be reviewed and approved by the Corporation in accordancewith the Standards.6.1.2 Reservation of RightsThe Corporation reserves the right:1. To approve or reject any Special Issuer Program application; and2. To require that any previously approved Special Issuer Program bemodified; and3. To withdraw its approval of any Special Issuer Program and require theSpecial Issuer Program to be wound up and terminated.A Member may request that the Corporation’s Secretary review the rejection orwithdrawal of the approval of a Special Issuer Program by written request tothe Corporation’s Secretary within 30 days of receipt of the notice of rejectionor withdrawal of approval. Any decision by the Corporation’s Secretary withrespect to such termination is final and not appealable.6.1.3 Cardholder CommunicationA Member is required to provide each Cardholder offered a Card to be issuedas part of a Special Issuer Program with the terms and conditions of theSpecial Issuer Program.The Corporation determines whether any Cardholder Communication,including, by way of example and not limitation, a Solicitation, disclosure orother information about a Special Issuer Program, is satisfactory and incompliance with the Standards. As a condition of the commencement orcontinuation of a Special Issuer Program, the Member must comply with theCorporation’s Cardholder Communication requirements.Special Issuer Programs6.2 Affinity and Co-Brand Card Programs6-2©1969–2010 MasterCard29 October 2010 • MasterCard RulesEach Cardholder Communication must clearly communicate the identity of theMember as the Card Issuer and otherwise must be clear and truthful and mustnot reflect poorly on the Corporation or any Mark.Each Special Issuer Program Solicitation must:1. Refer prominently to the offering exclusively as a Card and not position theoffering as anything other than a Card; and2. Prominently and integrally feature the MasterCard Word Mark andMasterCard Brand Mark; and3. Clearly and conspicuously disclose the identity of the Card Issuer.Each Solicitation about a Special Issuer Program, including any materialmodification of a prior Solicitation, must be approved in writing by the Issuerprior to final production and first use.6.2 Affinity and Co-Brand Card ProgramsAffinity Card Programs and Co-brand Card Programs are Special IssuerPrograms. This Rule 6.2 is applicable to both.6.2.1 Program PartnersSubject to compliance with the Standards, an Issuer may use the area on aCard that the Standards reserve for the identification of the Issuer to instead oradditionally identify a person or entity other than the Issuer. Such person orentity is referred to herein as a “Partner.” There are two types of Partners: an“Affinity Group,” which is an educational or other not-for-profit entity thatpromotes an institution or activities, and a “Co-brand Partner,” which is a forprofitcompany organized to engage in commercial activity.Notwithstanding Rule 1.5.1, a financial institution that is eligible to be aMember may be a Co-brand Partner only if such entity is not a Member.6.2.2 Ownership and Control of the ProgramAn Affinity Card Program or Co-brand Card Program must be entirely ownedand Controlled by the Issuer at all times and a Partner may not own or Controlany part of the Program or the Program receivables. The Corporationexclusively determines if an Issuer is in compliance with the foregoingrequirements. In making such a determination, the Corporation may considersuch factors as:Special Issuer Programs6.2 Affinity and Co-Brand Card Programs©1969–2010 MasterCardMasterCard Rules • 29 October 2010 6-31. Whether the Member establishes the Program policies and guidelines, suchas Cardholder credit and eligibility decisions;2. The Member’s role in setting fees and rates;3. What the Member has at risk;4. Whether the Member actively ensures that the Program policies andguidelines are implemented;5. The ownership and Control of the Program receivables;6. Whether all or a substantial portion of the receivables are financed with thePartner; and7. The extent to which the Member, and not the Partner, is portrayed as theowner of the Program.6.2.3 Issuer Identification on Program CardsThe following Issuer identification requirements apply to all Affinity CardProgram and Co-brand Card Program Cards:1. Neither the Card design nor any information appearing on the Card maystate or infer that anyone other than the Member is the Issuer of the Card.2. Issuer identification consisting of the Issuer’s name or the Issuer’s nameand logo must be clearly visible either on the Card face or on the Cardback. The name or logo or both of a Partner may appear on the Card facein addition to the Issuer identification or on the Card back.3. A Card that bears only the Partner’s name or logo on the Card face, butthat otherwise satisfies the Issuer identification Standards is deemed (in theabsence of other circumstances) to comply with these requirements.4. In addition to, or in lieu of, appearing on the upper portion of the Cardface, the name of the Partner may be present on the fourth line of theAccount Information Area.5. If the Issuer identification does not appear on the Card face, the followingstatement must prominently appear and be clearly legible on the Cardback: “This card is issued by (FULL, TRUE ISSUER NAME) pursuant tolicense by MasterCard International.” The location of this statement on theCard is at the Issuer’s discretion.6. For Programs in which more than one Partner participates, Issueridentification on the card back must be equal or greater in size than theidentification of any Partner on the Card back. See “Multiple Partners.”7. The Issuer’s customer service telephone number must appear on the backof all Cards.Special Issuer Programs6.2 Affinity and Co-Brand Card Programs6-4©1969–2010 MasterCard29 October 2010 • MasterCard Rules6.2.4 Program NameAn Issuer may apply to the Corporation for permission to have a Card Programname appear in addition to or in lieu of the Issuer name or the Partner’s nameor both on the Card face and, with such permission, may use such a CardProgram name.6.2.5 Multiple PartnersExcept as may be otherwise set forth in the Standards, if a Program involvesmore than one Partner, only one Partner’s name or logo or both may appearon the Card face. The name or logo or both of any additional Partner(s) mayappear only on the Card back. Note Variations to this Rule appear in Chapter 10, “Asia/Pacific Region Rules”;Chapter 12, “Europe Region Rules”; Chapter 13, “Latin America and theCaribbean Region Rules”; and Chapter 15, “United States Region Rules.”6.2.6 Accept All Cards without DiscriminationA Merchant that accepts any Affinity Card Program Cards or Co-brand CardProgram Cards must accept all other validly presented Cards, without limitationor exception.6.2.7 Use of the MasterCard Acceptance MarkA MasterCard Acceptance Mark displayed at the POI must appear apart fromany Partner identification and must at least have parity in size and prominencewith any Program logo, Program name, or the like, and with any competingmark also displayed. The Corporation has the right to require the modificationor removal of any POI display of a Program name or logo that the Corporationdetermines does not comply with this Rule or reflects negatively on any Mark.Special Issuer Programs6.3 Brand Value Transactions and Proprietary Accounts©1969–2010 MasterCardMasterCard Rules • 29 October 2010 6-56.3 Brand Value Transactions and Proprietary AccountsA Brand Value Transaction (“BVT”) means a Member or third party transactionthat originates by the use of a Card to access a proprietary account, proprietaryapplication, or both. A BVT is not a Transaction. A BVT is a transaction that:1. Accesses a proprietary account through use of an Affinity Card ProgramCard or Co-brand Card Program Card at the Partner’s own Merchantlocations or at other Merchants that participate in the Partner’s services; or2. Accesses proprietary stored value residing on a Card’s magnetic stripe orchip; or3. Uses a non-payment application residing on a Card, such as a loyaltyapplication, an electronic coupon, medical information, or paperlessticketing. The technology employed by the non-payment application (forexample, a chip or magnetic stripe) must not facilitate or otherwise enablethe use of a competitive payment product for the non-payment benefit orservice. Note A variation to this Rule appears in Chapter 12, “Europe Region Rules.”6.3.1 Proprietary Account AccessThe Corporation exclusively determines if a proprietary account number maybe used on a Card as a BVT. A proprietary account number that theCorporation determines may be used on a Card as a BVT may have one ormore of the following characteristics:1. The proprietary account number is different from the Card accountnumber. The proprietary account number may appear on the Card face,be encoded on the Card, or be cross-referenced in the Member or aPartner’s system.2. The proprietary account number is used in a system or network forauthorization and settlement that is distinct from the Interchange Systemand is not used in the Interchange System.3. Any billing related to use of the proprietary account number is distinctfrom any billing for the Card account, whether as part of a commonstatement or in a separate statement.Special Issuer Programs6.4 Remote Transaction Accounts6-6©1969–2010 MasterCard29 October 2010 • MasterCard RulesAccess to a proprietary account by means of an Affinity Card Program Card orCo-brand Card Program Card is authorized only with the prior written consentof the Corporation. In addition, such a Program Card must afford theCardholder access to the same proprietary account that the Partner previouslyestablished for the Cardholder, for payment of the same particularly definedset of transactions that were previously payable by other means. TheCorporation must approve, in advance and in writing, of the locations,services, and parties for which the proprietary account access feature isavailable.6.3.2 Fees and Reporting RequirementsFrom time to time, the Corporation may establish, implement, and collect fees,assessments, or both arising from or related to BVTs, proprietary accounts, orboth.If a BVT involves an Affinity Card Program or a Co-brand Card Program, theMember must separately report to the Corporation the number of Cardsoutstanding, the proprietary account sales volume on such Cards, and anyother requested information in the form and at such times as the Corporationrequires. Note A variation to this Rule appears in Chapter 10, “Asia/Pacific Region Rules.”6.4 Remote Transaction AccountsA Remote Transaction account means a Card account that is intended primarilyto be used to engage in Remote Transactions. Subject to the requirements setforth below, a Member is not required to issue a physical Card at the time thatthe Member activates a Remote Transaction account. A Program using RemoteTransaction accounts is a Special Issuer Program, is subject to the Standards,and has all rights accorded to Cards under the Standards except thoseStandards that relate to the physical characteristics or use of a Card.Special Issuer Programs6.4 Remote Transaction Accounts©1969–2010 MasterCardMasterCard Rules • 29 October 2010 6-76.4.1 Remote Transaction Account RequirementsAn Issuer of a Remote Transaction account must comply with the all of thefollowing requirements:1. A Remote Transaction account program may not be conducted or marketedwithout the express prior written consent of the Corporation.2. A Remote Transaction account must either be linked to a Card account orthe account holder must be given an opportunity promptly upon request tobe issued and receive a Card that links to the Remote Transaction account.3. A Remote Transaction account must be assigned a 16-digit accountnumber, in conformance with the Standards applicable to Cards, and mustbe assigned a Card Validation Code 2 (CVC 2) value and an expiration or“valid through” date.4. A Remote Transaction account must be enhanced with Address VerificationService (AVS) if the account is issued for use in an area where AVS isavailable.Before activating a Remote Transaction account, the Issuer must communicatein writing to the Cardholder the account number, the expiration or “validthrough” date of the account, the identity of the Issuer, and instructions as tothe manner in which the Remote Transaction account may be used.6.4.1.1 Remote Transaction MasterCard M/Chip Account ProgramsA Remote Transaction MasterCard M/Chip™ account means an EMV chip-basedRemote Transaction account that a Cardholder uses to effect remote chip-readTransactions. Remote Transaction M/Chip account Programs must adhere toall applicable M/Chip Standards as may be developed and amended from timeto time.Special Issuer Programs6.5 Secured Card Programs6-8©1969–2010 MasterCard29 October 2010 • MasterCard Rules6.5 Secured Card ProgramsA secured Card means a Card for which a line of credit is secured by anamount held on deposit. A secured Card Program is a Special Issuer Program.6.5.1 Secured Card Program RequirementsA secured Card Program must be, and the Corporation exclusively determineswhether a secured Card Program is:1. Structured so as to avoid undue risk to the Corporation and its Members,and2. Operated in a manner that does not reflect poorly on the Corporation orthe Marks.6.5.2 Refund of FeesIf a Member promises, directly or indirectly, to refund any fee paid by anapplicant for a secured Card if the Card is not so issued, the Member mustensure that such refund is made promptly and in any event within 30 daysfollowing the submission of the application and without any further action bythe applicant.6.5.3 Secured Card Program Solicitation and DisclosureRequirementsThe following Solicitation and disclosure requirements apply to a secured CardProgram:1. A Member that conducts a secured Card Program without the use of anMSP may use a Program name to identify such a Program, in addition to orin lieu of the Member’s name, subject to the prior written approval of theCorporation.2. A Solicitation may not reference consumers who have filed, or arecontemplating filing, for bankruptcy relief. Any reference within aSolicitation to a consumer’s credit problem may be included only in thegeneral disclosure to the consumer.3. Each Solicitation for a secured Card must clearly and conspicuouslydisclose that the Card is a secured Card and that the consumer mustestablish a deposit account. The Solicitation also must specify that thecredit line will be equal to eithera. The amount of the security deposit, orb. A specified percentage of the security deposit.Special Issuer Programs6.6 Prepaid Card Programs©1969–2010 MasterCardMasterCard Rules • 29 October 2010 6-94. No Solicitation may refer to a specific credit line limit unless the Issuera. Regularly issues secured Cards with such a credit limit, orb. Has in effect a policy thati. permits the regular issuance of secured Cards with such a creditlimit, andii. is compatible with the Issuer’s policy governing its issuance ofsecured Cards with lower credit limits.5. Each Solicitation for a secured Card must clearly and conspicuouslydisclose what an applicant will receive by responding to the Solicitation. Ifthe applicant may not be issued a secured Card after responding to aSolicitation, that fact must be clearly and conspicuously disclosed in theSolicitation.6. Each Solicitation for a secured Card must clearly and conspicuouslydisclose any and all application or other fees the applicant must pay, orcould be required to pay, to be issued a secured Card. All such fees mustbe made payable to the Issuer and not to any other person or entity.6.6 Prepaid Card ProgramsAn Issuer of a prepaid Card must comply with Standards applicable to prepaidCard Programs, as such Standards may be modified from time to time. As ofthe date of this publication, such Standards include the document entitledPolicy for Prepaid Card Programs.Compliance ZonesThe following table identifies the noncompliance category that the Corporationhas assigned to the Standards described within this chapter. Thesenoncompliance categories are assigned for the purposes of assessments underthe compliance framework described in Rule 3.1.2.Section Number Section Title Category6.1.1 Prior Consent of the Corporation A6.1.3 Cardholder Communication A6.2.1 Program Partners A6.2.2 Ownership and Control of the Program A6.2.3 Issuer Identification on Program Cards B6.2.4 Program Name BSpecial Issuer ProgramsCompliance Zones6-10©1969–2010 MasterCard29 October 2010 • MasterCard RulesSection Number Section Title Category6.2.5 Multiple Partners B6.2.6 Accept All Cards without Discrimination B6.2.7 Use of the MasterCard Acceptance Mark A6.3.1 Proprietary Account Access A6.3.2 Fees and Reporting Requirements B6.4.1 Remote Transaction Account Requirements A6.5.1 Secured Card Program Requirements A6.5.2 Refund of Fees A6.5.3 Secured Card Program Solicitation and Disclosure Requirements A6.6 Prepaid Card Programs A©1969–2010 MasterCardMasterCard Rules • 29 October 2010 7-i7 Member Service ProvidersThis chapter contains Rules that apply to Members that use Member ServiceProviders to provide Program Service.7.1 Applicability of Member Service Provider Rules …………………………………… 7-17.2 MSP Categories …………………………………………………………………………………. 7-17.2.1 Independent Sales Organization ………………………………………………… 7-17.2.2 Third Party Processor ………………………………………………………………… 7-17.2.2.1 Type I ……………………………………………………………………………… 7-27.2.2.2 Type II …………………………………………………………………………….. 7-27.2.3 Determination of Program Service ……………………………………………… 7-27.3 General Obligations ………………………………………………………………………….. 7-27.3.1 Program Responsibility and Control ……………………………………………. 7-27.3.2 Notification to and Registration by the Corporation……………………… 7-37.3.3 MSP Agreement ………………………………………………………………………… 7-37.3.3.1 Before Entering Into an Agreement with an MSP ………………… 7-47.3.4 Disclosure of Standards …………………………………………………………….. 7-57.3.5 Member Point of Contact …………………………………………………………… 7-57.3.6 Affiliate Member ……………………………………………………………………….. 7-57.3.7 Use of the Marks ………………………………………………………………………. 7-67.3.8 MSP Identification on a Card ……………………………………………………… 7-67.3.9 Program Materials……………………………………………………………………… 7-67.3.10 Fees ……………………………………………………………………………………….. 7-77.3.11 Settlement Account …………………………………………………………………. 7-77.3.12 Transfer of Rights Prohibited ……………………………………………………. 7-77.3.13 Use of Systems and Confidential Information …………………………….. 7-77.3.14 Indemnification ………………………………………………………………………. 7-87.3.15 No Endorsement by the Corporation ………………………………………… 7-87.3.16 Audits …………………………………………………………………………………….. 7-97.3.17 Settlement Failure Obligation …………………………………………………… 7-97.3.18 Data Security ………………………………………………………………………….. 7-97.3.19 Data Storage Entity (DSE) Identification ……………………………………. 7-97.3.19.1 DSE Registration Requirements ………………………………………. 7-107.4 Merchant Acquiring Programs ………………………………………………………….. 7-107.4.1 Merchant Agreement ……………………………………………………………….. 7-107.4.2 Collection of Funds …………………………………………………………………. 7-117.4.3 Access to Documentation ………………………………………………………… 7-11Member Service Providers7-ii©1969–2010 MasterCard29 October 2010 • MasterCard Rules7.4.4 Authority to Terminate Merchant Agreement …………………………….. 7-117.5 Card Issuing Programs …………………………………………………………………….. 7-127.5.1 Card Application Approval ………………………………………………………. 7-127.5.2 Cardholder Agreement …………………………………………………………….. 7-127.5.3 Payment of Fees ……………………………………………………………………… 7-127.5.4 Program Receivables ……………………………………………………………….. 7-127.6 MSP Registration ……………………………………………………………………………… 7-127.6.1 Registration Requirements for ISOs and Type II TPPs ………………… 7-127.6.1.1 SDP Program Noncompliance ………………………………………….. 7-147.6.2 Registration Requirements for Type I TPPs ……………………………….. 7-147.6.3 Prohibition from Acting as an MSP or DSE ………………………………… 7-147.6.4 Termination of MSP Agreement ……………………………………………….. 7-157.7 Type I TPP Evaluation Program ……………………………………………………….. 7-157.7.1 Compliance with Type I TPP Evaluation Program Standards ………. 7-157.8 Confidential Information of MSPs ……………………………………………………… 7-15Compliance Zones ………………………………………………………………………………… 7-16Member Service Providers7.1 Applicability of Member Service Provider Rules©1969–2010 MasterCardMasterCard Rules • 29 October 2010 7-17.1 Applicability of Member Service Provider RulesA Member may use a non-Member third party or another Member as its agentfor the purpose of performing Program Service on behalf of the Member,subject to compliance with the Member Service Provider (“MSP”) Rules setforth in this Rules chapter and other applicable Standards. The MSP Rules inthis Rules chapter do not apply to:1. A Member that performs Program Service solely for its own Programs, or2. A corporate affiliate of a Member that performs Program Service for theMember and that is Owned and Controlled by the Member or by theMember’s ultimate parent, provided such corporate affiliate providesProgram Service solely to the Member.7.2 MSP CategoriesThere are two categories of MSPs.7.2.1 Independent Sales OrganizationThe first MSP category is Independent Sales Organization (“ISO”). An ISO isan MSP that provides ISO Program Service. ISO Program Service includes, byway of example and not limitation, Merchant Solicitation, CardholderSolicitation, and customer service. An ISO must promptly provide suchinformation applicable to its MSP registration and provision of Program Serviceas the Corporation may request at any time.7.2.2 Third Party ProcessorThe second MSP category is Third Party Processor (“TPP”). A TPP is an MSPthat provides TPP Program Service. TPP Program Service includes, by way ofexample and not limitation, terminal operation, authorization routing, voiceauthorization, call referral processing, electronic data capture, clearing filepreparation and submission, settlement processing (excluding possession,ownership, or control of settlement funds, which are prohibited), Cardholderand Merchant statement preparation, and chargeback processing, and MobileRemote Payment. A TPP must provide such information applicable to its MSPregistration and provision of Program Service as the Corporation may requestat any time.TPPs are subcategorized as follows.*chg*Member Service Providers7.3 General Obligations7-2©1969–2010 MasterCard29 October 2010 • MasterCard Rules7.2.2.1 Type IThe first TPP subcategory is a Type I TPP. The Corporation determines, in itssole discretion, if a TPP is a Type I TPP. Type 1 TPPs generally are those thatprovide Program Service to a large number of Members or that otherwisecould significantly impact the integrity of the Interchange System.As a condition of continued Type I TPP registration by the Corporation, a TypeI TPP must comply with the Corporation’s Type I TPP Evaluation Programrequirements and applicable Standards, including these MSP Rules.7.2.2.2 Type IIThe second TPP subcategory is a Type II TPP. A Type II TPP is any TPP thatthe Corporation does not deem to be a Type I TPP. A Type II TPP mustcomply with applicable Standards, including these MSP Rules.The Corporation at any time may reclassify a Type II TPP as a Type I TPP.7.2.3 Determination of Program ServiceThe Corporation solely determines whether any particular activity may beconducted by an MSP. An MSP may provide only the type of Program Servicethat it is registered and permitted by the Corporation to provide. An MSP maynot offer or provide other services in conjunction with or as a condition ofproviding Program Service without the express prior consent of the Member.7.3 General ObligationsEach MSP and each Member that registers an MSP must comply with all of thefollowing.7.3.1 Program Responsibility and ControlThe Member must at all times be entirely responsible for and must itselfmanage and direct all aspects of Program Service performed by the MSP andestablish and enforce all management and operating policies applicable toProgram Service in accordance with the Standards. A Member must nottransfer or assign any part or all of such responsibilities or in any way limit itsresponsibility with regard to its MSP. A Member must conduct meaningfulmonitoring to ensure ongoing compliance by its MSP with applicableStandards.Member Service Providers7.3 General Obligations©1969–2010 MasterCardMasterCard Rules • 29 October 2010 7-37.3.2 Notification to and Registration by the CorporationEach Class A Member must advise the Corporation promptly when any MSPregistered by the Class A Member ceases to provide Program Service for theClass A Member or for any Affiliate Member Sponsored by the Class A Memberor if such an MSP undergoes a change of name or transfer of Ownership orControl.Each Type I TPP must advise the Corporation promptly in writing when it1. Engages to perform Program Service for any Member, and on an ongoingbasis, inform the Corporation of all ICA numbers for which ProgramService are performed;2. Undergoes a change of name or transfer of Ownership or Control;3. Fails or refuses to make payments in the ordinary course of business;4. Makes an assignment for the benefit of creditors; or5. Seeks bankruptcy protection or similar protection.A Member may not receive Program Service by or from any other entity orperson except as set forth in the Standards.7.3.3 MSP AgreementA Member and its MSP must enter into a written agreement describing theProgram Service that the MSP is to provide. The MSP agreement must beupdated from time to time as appropriate to reflect the Program Service thatthe MSP provides and may not contradict, or be inconsistent with, theStandards.The MSP agreement must reflect the Member’s responsibility, as described inthis chapter, for establishing all management and operating policies and mustnot include any provision that limits, or attempts to limit, the Member’sresponsibility for the Program. The MSP agreement must, in substance,include all of the following provisions:1. The MSP received, understands, and agrees to comply with all applicableStandards, including these MSP Rules.2. On an ongoing basis, the MSP is promptly to provide the Member with thecurrent address of each of its offices.3. In the event of any inconsistency between any provision of the MSPagreement and the Standards, the Standards will govern.Member Service Providers7.3 General Obligations7-4©1969–2010 MasterCard29 October 2010 • MasterCard Rules4. The MSP agreement automatically and immediately terminates if theCorporation de-registers the MSP or if the Member ceases to be a Memberfor any reason or if the Member fails to have a valid License by theCorporation to use any Mark pertaining to the Program Service to beperformed by the MSP.5. The MSP acknowledges and agreesa. to comply with all Standards, as amended from time to time, applicableto the Program Service to be provided;b. that the Corporation is the sole and exclusive owner of the Marks;c. not to contest the ownership of the Marks for any reason;d. the Corporation may at any time, immediately and without advancenotice, prohibit the MSP from using any of the Marks for any reason;e. the Corporation has the right to enforce any provision of the Standardsand to prohibit an MSP from engaging in any conduct the Corporationdeems could injure or could create a risk of injury to the Corporation,including injury to reputation, or that could adversely affect theintegrity of the Interchange System, the Corporation’s ConfidentialInformation as defined in the Standards, or both; andf. the MSP will not take any action that could interfere with or preventthe exercise of this right by the Corporation.7.3.3.1 Before Entering Into an Agreement with an MSPBefore entering into, extending, or renewing an agreement with an MSP, aMember must verify that the MSP is a bona fide business, has sufficientsafeguards in place to protect Cardholder and Transaction informationpermitted by the Standards to be captured from unauthorized disclosure oruse, and complies with applicable laws.In determining whether the MSP is a bona fide business, the Member mustverify, at a minimum, that all of the following have been completed:1. Credit check, background investigations, and reference checks of the MSP.If the credit check of the MSP raises questions or does not providesufficient information, the Member also should conduct a credit check of:a. the owner, if the MSP is a sole proprietorb. the partners, if the MSP is a partnershipc. the principal shareholders, if the MSP is a corporationMember Service Providers7.3 General Obligations©1969–2010 MasterCardMasterCard Rules • 29 October 2010 7-52. Inspection of the MSP’s premises and records to ensure that the MSP hasthe proper facilities, equipment, inventory, agreements, and personnelrequired and if necessary, license or permit and other capabilities toconduct business. If the MSP has more than one set of premises, theMember must inspect at least one of them.The Corporation does not require a Member to conduct a credit check of apublic or private company that has annual sales revenue in excess of USD 50million (or the foreign currency equivalent), provided that the Memberreviews, and finds satisfactory for the purposes of the Program Services beingconsidered, the MSP’s most recent annual report, including audited financialstatements. A private company that does not have a recent audited financialstatement is subject to a credit check and inspection even if its annual revenueexceeds USD 50 million.The Member must retain all records concerning the investigation of any MSPwith which it has entered into an agreement to receive Program Services for aminimum of two years after the date the agreement is terminated or expires.7.3.4 Disclosure of StandardsBefore a Member proposes an entity for registration as an MSP by theCorporation, the Member must provide the proposed MSP with a copy ofStandards then in effect applicable to MSPs and Program Service the proposedMSP is expected to perform, including these MSP Rules. After registration, theMember must promptly provide an MSP with any change to the Standardsapplicable to such Program Service, including any change to these MSP Rules.7.3.5 Member Point of ContactAn MSP must promptly provide a name and title of, and a telephone numberfor an employee of the Member upon request by a Cardholder or a Merchant,or if the MSP is unable or unwilling to respond to a question to theCardholder’s or Merchant’s satisfaction.7.3.6 Affiliate MemberIn addition to complying with these MSP Rules, an Affiliate Member wishing toreceive Program Service from an MSP must obtain the prior consent of theAffiliate Member’s Sponsoring Class A Member.Member Service Providers7.3 General Obligations7-6©1969–2010 MasterCard29 October 2010 • MasterCard Rules7.3.7 Use of the MarksAn MSP must not use any Mark on its own behalf, whether in connection withProgram Service or otherwise. The MSP may not suggest or in any mannercreate an impression that the MSP is a Member or a representative of theCorporation, or that the MSP is anything other than an MSP of the Member.The MSP must not create an impression that the Corporation in any wayendorses the MSP or Program Service the MSP performs.The MSP may use one or more of the Marks, provided that:1. The Marks are used in accordance with the Standards, including allreproduction, usage and artwork Standards that may be in effect from timeto time; and2. The Marks are used according to the express written instructions of theMember; and3. The Marks are used solely in connection with the provision of ProgramService.The MSP may use the Marks on its stationery, letterhead, or business cardsonly if accompanied, in close proximity, by a clear statement that identifies theMSP as an agent for a Member and that includes the name by which theMember identifies itself to the public (for example, “MSP is an authorizedrepresentative of Bank XYZ”).7.3.8 MSP Identification on a CardThe name of a non-Member MSP may appear on a Card only if that MSP doesnot provide acquiring Program Service for any Member.7.3.9 Program MaterialsA Member must approve all Program documents and other materials beforeany distribution, disclosure, or other use thereof by an MSP. The Programmaterials may not state or imply that the MSP is participating in, or conductingany activity not expressly permitted by the Standards. Program materialsinclude, by way of example, Merchant applications, Card applications,Merchant Agreements, Cardholder agreements, Merchant statements,Cardholder statements, marketing materials, and Cardholder Communications,including Solicitations.Member Service Providers7.3 General Obligations©1969–2010 MasterCardMasterCard Rules • 29 October 2010 7-77.3.10 FeesA Member must approve, in advance, any fee or other obligation associatedwith the Member’s Program and an MSP may not collect or attempt to collectany such fee or obligation without the express prior written approval of theMember. Any fee must be clearly and conspicuously disclosed in writing tothe Merchant or Card applicant, as appropriate, prior to any request or demandfor payment of the fee.7.3.11 Settlement AccountAn MSP must not have access to any account for funds then or subsequentlydue to a Merchant for Activity and/or funds withheld from a Merchant forchargebacks arising out of Activity. A Member must not assign or otherwisetransfer an obligation to pay or reimburse a Merchant to an MSP if theobligation arises from Activity.7.3.12 Transfer of Rights ProhibitedAn MSP must not subcontract, sublicense, assign, license, franchise, or in anyother manner extend or transfer to any third party any right or obligation theMSP may have in connection with providing Program Service to a Member,and any such transfer is null and void ab initio. An MSP may provide ProgramService to a Member only using the MSP’s own employees or employees of adifferent MSP that is confirmed also to be registered by the Corporation toprovide Program Service for that same Member. This requirement does notpreclude a DSE that has been registered as such by the Corporation fromstoring, transmitting, and/or processing Card account data for or on behalf ofthe MSP.7.3.13 Use of Systems and Confidential InformationAn MSP must agree to:1. Use any of the Corporation’s equipment and software (“Systems”),including but not limited to any MasterCard Interface Processor (MIP) orNetwork Interface Processor (NIU) used to connect to the InterchangeSystem, and any of the Corporation’s information identified or reasonablyunderstood to be confidential or proprietary (“Corporation’s ConfidentialInformation”) solely in order to perform Program Service on behalf of theMember and not for any other purpose;Member Service Providers7.3 General Obligations7-8©1969–2010 MasterCard29 October 2010 • MasterCard Rules2. Treat the Systems and Corporation’s Confidential Information in at least ascareful and confidential a manner as the MSP treats its own and theMember’s systems and proprietary information;3. Acknowledge that access to the Systems and Corporation’s ConfidentialInformation does not provide the MSP with any right, title, interest, orcopyright therein or any license to use, sell, exploit, copy or develop themfurther;4. Limit access to the Systems and Corporation’s Confidential Information tothose MSP employees with a need to have access or to know in order toenable the MSP to perform Program Service and to implement and tomaintain reasonable and appropriate safeguards to prevent unauthorizedaccess to the Systems or disclosure of Corporation’s ConfidentialInformation, including those set forth in section 10.6 of the Security Rulesand Procedures manual;5. Immediately cease any and all use of the Systems and Corporation’sConfidential Information upon request of the Corporation or the Memberor upon the earlier of the termination or completion of the MSP’sperformance of Program Service, and to immediately deliver all Systemsand all Corporation’s Confidential Information to the Corporation;6. Immediately advise the Member and the Corporation if any unauthorizedperson seeks to gain or gains access to the Systems or Corporation’sConfidential Information, whether by legal proceedings or otherwise.The obligations set forth in this Rule survive the termination or expiration ofthe MSP agreement.7.3.14 IndemnificationProgram Service undertaken by or on behalf of a Member by any third party(regardless of whether such third party is or was registered with theCorporation as an MSP or whether such third party is itself a Member), thereceipt of Program Service by a Member, and the performance of ProgramService for a Member by any person or entity other than that Member,including, for example, an MSP, is Activity which subjects the Member to theindemnification and other obligations set forth in Rule 3.3.7.3.15 No Endorsement by the CorporationIn no event does compliance with these MSP Rules or enforcement or any lackof or delay in enforcement thereof or the registration of an MSP imply, suggestor otherwise mean that the Corporation endorses any MSP or the nature orquality of Program Service or other performance, or that the Corporationapproves of, is a party to, or a participant in, any act or omission by an MSP orother entity acting for or on behalf of a Member.Member Service Providers7.3 General Obligations©1969–2010 MasterCardMasterCard Rules • 29 October 2010 7-97.3.16 AuditsThe Corporation or its designee may conduct one or more or regular orperiodic financial and procedural audits of the Member, its MSP(s), or both, atany time and from time to time for the purpose of determining compliancewith the Standards, including these MSP Rules. The Member bears all costs ofany such audit or audits. The Member and its MSP(s) each must fullycooperate with and promptly supply the Corporation with all information andmaterial upon request.7.3.17 Settlement Failure ObligationAn MSP that becomes aware of a settlement failure by the Member(s) forwhich the MSP provides Program Service must promptly, and in no event laterthan 24 hours after becoming aware of such failure, notify the Corporation inwriting of such failure.7.3.18 Data SecurityAn MSP must comply with all Standards and applicable laws and regulationspertaining to the storage and/or safeguarding and/or transmission of accountdata. If an MSP reasonably believes that an unauthorized person accessed ormay have accessed Card account, Cardholder, or Transaction information inthe possession or control of the MSP or any of the MSP’s DSEs, the MSP mustpromptly notify the Member(s) for which it provides Program Service inwriting of such belief and the Member must promptly notify the Corporation inwriting of such belief.7.3.19 Data Storage Entity (DSE) IdentificationAn MSP must promptly submit in writing to the Corporation and to eachMember for which the MSP is registered to provide Program Service theidentity of any DSE that engages, or proposes to engage, in the processing,transmission, or storage of Card account data, Transaction data, or both, for oron behalf of the MSP, whether directly or indirectly, regardless of the manneror duration of such activities.The Member must promptly register each entity that does or will provide DSEservices to any of the Member’s MSPs via the MasterCard Registration Programsystem on MasterCard OnLine. In addition, the Member must ensure that suchan entity complies with the following Rule.Member Service Providers7.4 Merchant Acquiring Programs7-10©1969–2010 MasterCard29 October 2010 • MasterCard Rules7.3.19.1 DSE Registration RequirementsA DSE must comply with the MasterCard Site Data Protection (SDP) Program inaccordance with the implementation schedule set forth in section 10.3.4 of theSecurity Rules and Procedures manual. Before initiating registration, theMember’s MSP must instruct the proposed DSE to contact the Corporation viae-mail at sdp@mastercard.com and validate its compliance with the SDPProgram using the tools described in section 10.3.2 of the Security Rules andProcedures manual, or if the proposed DSE is not compliant, provide aCorporation-approved compliance action plan. A Corporation-approvedcompliance action plan does not exempt the Class A Member fromresponsibility and liability that arises from the DSE’s noncompliance with anyStandard relating to the disclosure and securing of Cardholder account andTransaction data.7.4 Merchant Acquiring ProgramsIn addition to complying with the general obligations set forth in Rule 7.3,each Member and each MSP that provides Program Service with respect to thatMember’s Merchant acquiring Programs also must comply with this Rule 7.4.7.4.1 Merchant AgreementThe Merchant Agreement establishing the terms of an acquiring relationshipbetween the Acquirer and a Merchant must:1. Be signed by the Member with no separate or other agreement betweenthe MSP and the Merchant regarding Activity. The MSP may be a party tothe Merchant Agreement, in which case the Merchant Agreement mustcontain the substance of all of the following:a. For purposes of the Merchant Agreement and performance of theMerchant Agreement by the MSP, (i) the MSP is the exclusive agent ofthe Member; (ii) the Member is at all times and entirely responsible for,and in control of, MSP performance; and (iii) the Member mustapprove, in advance, any fee payable to or obligation of the Merchantarising from or related to performance of the Merchant Agreement.b. The Merchant Agreement is not effective and may not be modified inany respect without the express written agreement of the Member.Member Service Providers7.4 Merchant Acquiring Programs©1969–2010 MasterCardMasterCard Rules • 29 October 2010 7-11c. The MSP may not have access, directly or indirectly, to any account forfunds or funds due to a Merchant and/or funds withheld from aMerchant for chargebacks arising from, or related to, performance ofthis Merchant Agreement. The Member may not assign or otherwisetransfer an obligation to pay or reimburse a Merchant arising from, orrelated to, performance of the Merchant Agreement to an MSP.d. The MSP may not subcontract, sublicense, assign, license, franchise, orin any manner extend or transfer to any third party, any right orobligation of the MSP set forth in the Merchant Agreement. TheMember may not waive, forgive, release, assign, or fail to insist on strictperformance of each requirement set forth in these parts 1 through 4.2. Confirm the Member’s responsibility for the Program and for theMerchant’s Program participation and confirm that the Merchant Agreementdoes not contain any provision that could be deemed to limit suchresponsibility.3. Not take effect or state or imply that it takes or has taken effect prior tobeing signed by the Member.4. Disclose the Member’s name and sufficient information to enable theMerchant to contact the Member directly by telephone or in writing.7.4.2 Collection of FundsDiscount rates (or similar charges called by other terms) due to a Member froma Merchant must be collected directly by the Member and not by the MSP.7.4.3 Access to DocumentationThe Member at all times must maintain prompt and unrestricted physicalaccess to all original, executed Merchant Agreements and completedinspection reports. The Member must forward true and complete copies ofany one or more of these documents to the Corporation promptly uponrequest.7.4.4 Authority to Terminate Merchant AgreementA Member may not limit or in any manner condition its authority to terminateany Merchant Agreement to accommodate an MSP or otherwise.Member Service Providers7.5 Card Issuing Programs7-12©1969–2010 MasterCard29 October 2010 • MasterCard Rules7.5 Card Issuing ProgramsIn addition to complying with the General Obligations set forth in Rule 7.3,each Member and each MSP that provides Program Service with respect to thatMember’s Card issuing Programs also must comply with this Rule 7.5.7.5.1 Card Application ApprovalThe Member itself, and not an MSP, must approve of a Card applicant’sparticipation in a Card Program.7.5.2 Cardholder AgreementThe Cardholder agreement must disclose the Member’s name and sufficientinformation to enable the Cardholder to contact the Member directly bytelephone or in writing. The MSP must not be a party to the Cardholderagreement.7.5.3 Payment of FeesAll Program payments other than application fees for initial Programparticipants must be collected directly by the Member and not by the MSP.7.5.4 Program ReceivablesAn MSP may own Program receivables or participate in a financing vehicleinvolving Program receivables so long as the Corporation determines that theMember continues to own and control the Program. Ownership of Programreceivables by the MSP does not in any way limit the Member’s obligation tocomply with the Standards.7.6 MSP Registration7.6.1 Registration Requirements for ISOs and Type II TPPsEach Class A Member, for itself and each of its Sponsored Affiliate Members,must use the MasterCard Registration Program (MRP) system on MasterCardOnLine to register any ISO or Type II TPP MSP, as follows:1. The Class A Member must submit all information and material required bythe Corporation in connection with the proposed registration within 60days of the registration application submission date.Member Service Providers7.6 MSP Registration©1969–2010 MasterCardMasterCard Rules • 29 October 2010 7-132. A Type II TPP that also wishes to provide ISO Program Service to one ormore Members must be distinctly proposed for registration by theCorporation on behalf of each Member wishing to receive ISO ProgramService from that Type II TPP.3. A Type II TPP must comply with the MasterCard Site Data Protection (SDP)Program in accordance with the implementation schedule set forth insection 10.5.4 of the Security Rules and Procedures manual. Beforeinitiating registration, the Member must instruct the proposed Type II TPPto contact the Corporation via e-mail at sdp@mastercard.com and validateits compliance with the SDP Program using the tools described in section10.5.2 of the Security Rules and Procedures manual, or if the proposedType II TPP is not compliant, provide a Corporation-approved complianceaction plan. A Corporation-approved compliance action plan does notexempt the Class A Member from responsibility and liability that arisesfrom the Class A Member’s or any of its Sponsored Affiliate Members’ ortheir Type II TPP’s noncompliance with any Standard, including thoserelating to the disclosure and securing of Cardholder account andTransaction data.4. The Corporation collects the applicable fee(s) then in effect from theMember that proposes the registration via the MasterCard ConsolidatedBilling System (MCBS). A Member that receives ISO Program Service froma Type II TPP is charged separately for the ISO registration.5. The Class A Member must receive the Corporation’s written or e-mailconfirmation of the registration before the Class A Member or any of itsSponsored Affiliate Members receives Program Service from an ISO orType II TPP and before the ISO or Type II TPP commences providing suchProgram Service or represents itself to any person as authorized to providesuch Program Service on behalf of the Class A Member or any of itsSponsored Affiliate Members. In its sole discretion, the Corporation mayapprove or may reject any application for the registration of an MSP.6. To maintain the registration of an ISO or Type II TPP, the Member mustsubmit such information and material as may be required by theCorporation from time to time, including but not limited to a copy of theagreement between the Member and ISO or Type II TPP. The renewal feethen in effect is debited from the Member via MCBS. In its sole discretion,the Corporation may decline to renew the registration of an MSP.If the Member terminates an ISO or Type II TPP, the Member must notify theCorporation of the termination date and of the reasons for the termination.This notification must be received by the Corporation within one week of thedecision to terminate. In its sole discretion, the Corporation may require aMember to terminate an MSP at any time.Member Service Providers7.6 MSP Registration7-14©1969–2010 MasterCard29 October 2010 • MasterCard Rules7.6.1.1 SDP Program NoncomplianceEach Class A Member that has registered or proposed the registration of anMSP to provide Program Service for it and/or for one or more of its SponsoredAffiliate Members must promptly notify each of its Merchants and othercustomers that directly or indirectly are or may benefit from or may otherwisebe impacted, as the case may be, by the Program Service if the registered orproposed MSP is not or will not be fully compliant with SDP Programrequirements applicable to it as an MSP by and after the date performance ofthe Program Service commences. Such notification must include, with respectto the registered or proposed MSP:1. The name and address of the MSP;2. A description of the Program Service to be or being provided by the MSP;3. A description of SDP Program requirements the MSP is not compliant with;and4. A specific date by which the MSP will become fully compliant withapplicable SDP Program requirements, or, in the alternative, the date bywhich the MSP will cease providing Program Service.7.6.2 Registration Requirements for Type I TPPsA TPP that the Corporation designates as a Type I TPP, upon receivingnotification of such designation, must apply to be registered by theCorporation as a Type I TPP and must be registered by the Corporation as aType I TPP MSP before commencing to provide TPP Program Service. A TypeI TPP that also wishes to provide ISO Program Service to one or moreMembers must be distinctly proposed to the Corporation for registration byeach Member wishing to receive ISO Program Service from that Type I TPP.Post-registration by the Corporation of a Type I TPP, on a quarterly basis, theapplicable fee is charged by the Corporation directly to the Type I TPP. If aType I TPP also provides ISO Program Service to a Member, the Member ischarged separately for the ISO registration and renewal thereof. Renewal ofType TPP registration status is at the sole discretion of the Corporation.7.6.3 Prohibition from Acting as an MSP or DSEThe Corporation reserves the right to prohibit, either for a fixed period of timeor permanently, an MSP, its owners, officers, and/or employees from providingProgram Service or acting as a DSE or both.Member Service Providers7.7 Type I TPP Evaluation Program©1969–2010 MasterCardMasterCard Rules • 29 October 2010 7-157.6.4 Termination of MSP AgreementOn the effective date of the termination or expiration of the MSP agreement(s),or upon notice by the Corporation, or upon expiration or de-registration of anMSP, the MSP must immediately cease all use of the Corporation’s Marks andSystems and cease performing Program Service.7.7 Type I TPP Evaluation Program7.7.1 Compliance with Type I TPP Evaluation ProgramStandardsEach Type I TPP is required to comply with the Type I TPP EvaluationProgram requirements and fully cooperate with any effort by the Corporationto determine such compliance. The Corporation requires all Type I TPPs toparticipate fully in each such review.7.8 Confidential Information of MSPsThe Corporation will not disclose confidential information furnished to it by aMember or MSP pursuant to these MSP Rules, except to the Member or MSPsupplying the information, or as part of a general statistical compilation thatdoes not reveal individual Member or MSP data, or as may be required by anycourt process or governmental agency having or asserting jurisdiction over theCorporation, or as otherwise described in Rule 3.6.2.The registration and Type I TPP Evaluation Program compliance status of theType I TPP, including the identity of the Member(s) for which the Type I TPPprovides Program Service, the nature of Program Service the Type I TPPperforms, and the results of any Type I TPP evaluation are not confidentialinformation.In addition, and notwithstanding the aforesaid, as a condition of theregistration or renewal of registration of an MSP, the Member and MSP eachagree that the Corporation may disclose such information of and about theMember and MSP as the Corporation deems necessary or appropriate.Member Service ProvidersCompliance Zones7-16©1969–2010 MasterCard29 October 2010 • MasterCard RulesCompliance ZonesThe following table identifies the noncompliance category that the Corporationhas assigned to the Standards described within this chapter. Thesenoncompliance categories are assigned for the purposes of assessments underthe compliance framework described in Rule 3.1.2.Rule Number Rule Title Category7.2 MSP Categories (3 subsections) A7.3.1 Program Responsibility and Control A7.3.2 Notification to and Registration by the Corporation A7.3.3 MSP Agreement A7.3.4 Disclosure of Standards C7.3.5 Member Point of Contact B7.3.6 Affiliate Member A7.3.7 Use of the Marks B7.3.8 MSP Identification on a Card B7.3.9 Program Materials B7.3.10 Fees B7.3.11 Settlement Account A7.3.12 Transfer of Rights Prohibited A7.3.13 Use of the Systems and Confidential Information A7.3.16 Audits B7.3.17 Settlement Failure Obligation A7.3.18 Data Security A7.3.19 Data Storage Entity (DSE) Identification A7.4.1 Merchant Agreement A7.4.2 Collection of Funds A7.4.3 Access to Documentation B7.4.4 Authority to Terminate Merchant Agreement A7.5.1 Card Application Approval A7.5.2 Cardholder Agreement B7.5.3 Payment of Fees AMember Service ProvidersCompliance Zones©1969–2010 MasterCardMasterCard Rules • 29 October 2010 7-17Rule Number Rule Title Category7.5.4 Program Receivables A7.6 MSP Registration (4 subsections) A7.7.1 Compliance with Type I TPP Evaluation Program Standards A©1969–2010 MasterCardMasterCard Rules • 29 October 2010 8-i8 Cash DisbursementsThis chapter contains Rules that apply to the cash disbursements that Membersprovide.8.1 Cash Disbursements May Be Provided Only By Members…………………….. 8-18.2 Nondiscrimination …………………………………………………………………………….. 8-18.3 Maximum Cash Disbursement Amounts ……………………………………………… 8-18.4 Discount or Service Charges ………………………………………………………………. 8-28.5 MasterCard Acceptance Mark Must Be Displayed ………………………………… 8-28.6 Other Requirements ………………………………………………………………………….. 8-2Compliance Zones ………………………………………………………………………………….. 8-2Cash Disbursements8.1 Cash Disbursements May Be Provided Only By Members©1969–2010 MasterCardMasterCard Rules • 29 October 2010 8-18.1 Cash Disbursements May Be Provided Only ByMembersA cash disbursement may be provided only by a Member at its offices andthrough its authorized agents. For purposes of this Rule, an authorized agentis a financial institution authorized to provide cash disbursement services onbehalf of a Member pursuant to written agreement with the Member.8.2 NondiscriminationEach Member and each of its authorized cash disbursement agents mustcomply with the following requirements at each office at which any cashdisbursement services are afforded:1. Not discriminate against or discourage the use of Cards in favor of any cardor device bearing or otherwise issued or used in connection with anotheracceptance brand; and2. Provide cash disbursement services to all Cardholders on the same termsand regardless of the Issuer. Note An addition to this Rule appears in Chapter 15, “United States Region Rules.”8.3 Maximum Cash Disbursement AmountsA Member and each of its authorized cash disbursement agents may limit theamount of a face-to-face cash disbursement provided to any one Cardholder inone day at any individual office. Such limit may not be less than USD 5,000per Cardholder in one day and uniformly must be applied to all Cardholders.If compliance with this Rule would cause hardship to one or more (but not all)of such individual offices that are required or permitted to provide cashdisbursement services, the Member may establish a maximum cashdisbursement amount of less than USD 5,000 per person in one day at eachsuch office, provided that the maximum cash disbursement amount:1. Is not less than USD 1,000;2. Is not less than the maximum cash disbursement amount established forany other acceptance brand at the office; and3. Applies only at those offices where the Member can, if requested by theCorporation, demonstrate that a higher maximum would create a hardship.Cash Disbursements8.4 Discount or Service Charges8-2©1969–2010 MasterCard29 October 2010 • MasterCard Rules Note A variation to this Rule appears in Chapter 12, “Europe Region Rules.”8.4 Discount or Service ChargesThe Member and each of its authorized cash disbursement agents mustdisburse all cash disbursements at par without any discount and without anyservice or other charge to the Cardholder, except as may be imposed tocomply with applicable law. Any charge imposed must be charged to andpaid by the Cardholder separately and must not be included in the totalamount of the cash disbursement.8.5 MasterCard Acceptance Mark Must Be DisplayedA Member and each of its authorized cash disbursement agents must displaythe MasterCard Acceptance Mark to indicate that Cards are accepted asrequired by the Standards at each place where the Member or any such agentprovides cash disbursements.8.6 Other RequirementsThe Member and each of its authorized cash disbursement agents mustcomplete cash disbursement transactions in the manner set forth in theChargeback Guide. (Refer to the Maestro Global Rules and the CirrusWorldwide Operating Rules for Standards governing the use of automated tellermachines.)Compliance ZonesThe following table identifies the noncompliance category that the Corporationhas assigned to the Standards described within this chapter. Thesenoncompliance categories are assigned for the purposes of assessments underthe compliance framework described in Rule 3.1.2.Rule Number Rule Title Category8.1 Cash Disbursements May Be Provided Only By Members A8.2 Nondiscrimination ACash DisbursementsCompliance Zones©1969–2010 MasterCardMasterCard Rules • 29 October 2010 8-3Rule Number Rule Title Category8.3 Maximum Cash Disbursement Amounts B8.4 Discount or Service Charges B8.5 MasterCard Acceptance Mark Must Be Displayed B8.6 Other Requirements B©1969–2010 MasterCardMasterCard Rules • 29 October 2010 9-i9 SettlementThis chapter contains information about settlement procedures.9.1 Definitions ……………………………………………………………………………………….. 9-19.2 Net Settlement ………………………………………………………………………………….. 9-19.3 Currency Conversion …………………………………………………………………………. 9-29.4 Interchange and Service Fees …………………………………………………………….. 9-29.5 Establishment of Intracountry Interchange and Service Fees …………………. 9-39.5.1 Default Intracountry Fees ………………………………………………………….. 9-39.5.2 Intraregional Fees ……………………………………………………………………… 9-49.5.3 Bilateral Agreement …………………………………………………………………… 9-49.6 Cost Studies ……………………………………………………………………………………… 9-59.6.1 Allocation of Expenses………………………………………………………………. 9-59.6.2 Noncompliance with a Cost Study ……………………………………………… 9-5Compliance Zones ………………………………………………………………………………….. 9-5Settlement9.1 Definitions©1969–2010 MasterCardMasterCard Rules • 29 October 2010 9-19.1 DefinitionsAs used in the Rules set forth in this chapter 9, the following terms have themeanings described:• “Interchange fee” means an amount paid by the Acquirer to the Issuer withrespect to the interchange of a Transaction. All references to interchangefees in this chapter 9 mean both the levels of the fees and all qualifyingcriteria and conditions for their applicability.• “Intracountry issuing Volume” means the issuing Volume resulting fromIntracountry Transactions.• “Intracountry acquiring Volume” means the acquiring Volume resultingfrom Intracountry Transactions.• “Service fee” means an amount paid by the Issuer to the Acquirer withrespect to the interchange of a cash disbursement. All references to servicefees in this chapter 9 mean both the levels of the fees and all qualifyingcriteria and conditions for their applicability.• “Intracountry cash disbursement” means a cash disbursement that occurs inthe same country as the country in which the Card was issued, except asotherwise defined by the Corporation.• “Intraregional cash disbursement” means a cash disbursement that occursin a different country from the country in which the Card was issued,within the same MasterCard region, except as otherwise defined by theCorporation.• “Interregional cash disbursement” means a cash disbursement that occursin a different MasterCard region from the MasterCard region in which theCard was issued, except as otherwise defined by the Corporation.9.2 Net SettlementA Member that uses the Interchange System for the authorization and clearingof Transactions and cash disbursements is required to net settle in accordancewith the Corporation’s settlement Standards. However, an Acquirer and anIssuer may, with respect to a particular Transaction or cash disbursement,agree to settle directly between themselves pursuant to a bilateral agreement.Standards describing net settlement and bilateral agreement rights andobligations are set forth in the Settlement Manual.Settlement9.3 Currency Conversion9-2©1969–2010 MasterCard29 October 2010 • MasterCard RulesIf the Corporation does not support the local currency of a particular countryin the regional settlement service, then each Member engaged in IntracountryTransaction Activity in that country must participate in the Corporation’sintracurrency settlement service for that country, if such an intracurrencysettlement service exists.9.3 Currency ConversionThe Corporation converts all Transactions and cash disbursements processedthrough use of the Interchange System into the applicable settlement currency.The Acquirer must submit each Transaction or cash disbursement in thecurrency in which it occurred. However, if two Members elect not to settle aTransaction or cash disbursement by using the Interchange System and insteadelect to settle directly between themselves in accordance with a bilateralagreement, any currency that the Corporation supports is acceptable forsettlement. Note An addition to this Rule appears in Chapter 13, “Latin America and theCaribbean Region Rules. “9.4 Interchange and Service FeesA Transaction or cash disbursement cleared and settled between Membersgives rise to the payment of the appropriate interchange fee or service fee, asapplicable. The Corporation has the right to establish default interchange feesand default service fees (hereafter referred to as “interchange fees,” “servicefees,” or collectively, “fees”), it being understood that all such fees set by theCorporation apply only if there is no applicable bilateral interchange fee orservice fee agreement between two Members in place. The Corporationestablishes all fees for Interregional Transactions and interregional cashdisbursements and Intraregional Transactions and intraregional cashdisbursements, and may establish fees for Intracountry Transactions andintracountry cash disbursements. The Corporation will inform Members, asapplicable, of all fees it establishes and may periodically publish fee tables.Unless an applicable bilateral interchange fee or service fee agreementbetween two Members is in place, any intraregional or interregional feesestablished by the Corporation are binding on all Members. Note A variation to this Rule appears in Chapter 10a, “New Zealand Rules.”Settlement9.5 Establishment of Intracountry Interchange and Service Fees©1969–2010 MasterCardMasterCard Rules • 29 October 2010 9-39.5 Establishment of Intracountry Interchange and ServiceFeesThis Rule 9.5 is applicable only to Intracountry Transactions and intracountrycash disbursements.If intracountry interchange and service fees are not established by theCorporation, such fees may be established in one of two ways: by agreementof Members in the country as set forth in Rule 9.5.1, or by application ofintraregional interchange and service fees to Intracountry Transactions andintracountry cash disbursements as set forth in Rule 9.5.2. Such fees may alsobe established by bilateral agreement between two Members as set forth inRule 9.5.3.For any Transaction or cash disbursement that is subject to a bilateralagreement between two Members, the interchange and service fees set forth inthe bilateral agreement prevail.For any Transaction or cash disbursement that is not subject to a bilateralagreement between two Members, the default intracountry fees established bythe Corporation apply, or if none, the default intracountry fees established byMembers pursuant to these Rules apply, or if none, the intraregional feesapply, or if none, the interregional fees apply. Any multilateral Member feeagreement must comply with all requirements set forth in Rule 9.5.1. TheCorporation reserves the right to determine if multiple bilateral agreements aredeemed to be a multilateral agreement. Note Additions to this Rule appear in Chapter 10, “Asia/Pacific Region Rules” andChapter 13, “Latin America and the Caribbean Region Rules.”9.5.1 Default Intracountry FeesIf permitted by local law, default fees applicable to Intracountry Transactionsand intracountry cash disbursements for a country may be established by theaffirmative vote of Members that hold a License for the country and representat least 75 percent of the intracountry issuing Volume (excluding on-usVolume) and at least 75 percent of the intracountry acquiring Volume(excluding on-us Volume) in the preceding calendar year. To be effective, andin addition to the foregoing, intracountry fallback fees must be agreed to by atleast two Acquirers and at least two Issuers Licensed to engage in Activity inthe country. Once effective, intracountry fallback fees remain in effect untilrevised by Members pursuant to these Rules or by the Corporation.Settlement9.5 Establishment of Intracountry Interchange and Service Fees9-4©1969–2010 MasterCard29 October 2010 • MasterCard RulesIntracountry default fees established by Members must be established with thepurpose of encouraging the widespread use and acceptance of Cards, must bejustifiable, must not jeopardize the integrity of the Interchange System, mustnot conflict with the Standards, and must be reviewed periodically (typically,every one to three years) and revised as appropriate.Members that establish intracountry default fees must promptly provide theCorporation with a copy of such fees and any subsequent change to the fees.Members must be notified of intracountry default fees and any change theretowell in advance of the effective date, unless exceptional circumstances makethis impossible. Exceptional circumstances generally must relate to eventsbeyond the control of Members; in the event of dispute or uncertainty, theCorporation determines if notice was effective. Intracountry default fees thathave not been provided to and acknowledged by the Corporation as effectiveas of a certain date are not effective. Note A variation to this Rule appears in Chapter 10a, “New Zealand Rules.”9.5.2 Intraregional FeesIn the event that no bilaterally agreed interchange fee or service fee appliesand no default interchange fee or service fee has been otherwise establishedpursuant to these Rules, the applicable intraregional fee or if none, theinterregional fee, applies to Intracountry Transactions and intracountry cashdisbursements. Note A variation to this Rule appears in Chapter 10a, “New Zealand Rules.”9.5.3 Bilateral AgreementAny two Members may establish by bilateral agreement the interchange andservice fees applicable to Transactions and cash disbursements between them.All such fees must be submitted promptly to the Corporation. Whenapplicable to Transactions and cash disbursements processed through theInterchange System, they must be submitted to the Corporation sufficiently inadvance of the effective date to allow the Corporation to incorporate the feesinto future Interchange System releases as necessary or appropriate*chg*Settlement9.6 Cost Studies©1969–2010 MasterCardMasterCard Rules • 29 October 2010 9-5 Note An addition to this Rule appears in Chapter 10, “Asia/Pacific Region Rules.”9.6 Cost StudiesThe Corporation or its agent(s) may conduct one or more cost studies on acountry-specific or regional or other basis for the purpose of establishinginterchange and service fees. In order to ensure a sufficient quantity and levelof data quality and representativeness as the Corporation deems necessary orappropriate, the Corporation may designate any number of Members toparticipate in cost studies. All Members so designated are required toparticipate and must provide and be able to certify that the Member hasprovided the Corporation or its agent(s) with complete and accurateinformation in the form and manner and for such period of time and by a dateas requested.9.6.1 Allocation of ExpensesThe Corporation may allocate expenses related to any cost study amongMembers conducting Activity in the country or region or other area that is thesubject of the cost study. The expenses may be allocated as the Corporationdeems appropriate and the decision of the Corporation is binding on allMembers in that country or region or other area.9.6.2 Noncompliance with a Cost StudyA Member designated to participate in a cost study that fails to fully and timelyparticipate is subject to assessments and other disciplinary action at the solediscretion of the Corporation.Compliance ZonesThe following table identifies the noncompliance category that the Corporationhas assigned to the Standards described within this chapter. Thesenoncompliance categories are assigned for the purposes of assessments underthe compliance framework, as described in Rule 3.1.2.Rule Number Rule Title Category9.2 Net Settlement A9.3 Currency Conversion ASettlementCompliance Zones9-6©1969–2010 MasterCard29 October 2010 • MasterCard RulesRule Number Rule Title Category9.4 Interchange and Service Fees A9.5 Establishment of Intracountry Interchange and Service Fees A9.6 Cost Studies A©1969–2010 MasterCardMasterCard Rules • 24 November 2010 10-i10 Asia/Pacific Region RulesThis chapter contains Rules that apply only to the Asia/Pacific Region.Organization of this Chapter ………………………………………………………………….. 10-13.6 Provision and Use of Information …………………………………………………….. 10-13.6.1 Obligation of Member to Provide Information …………………………… 10-13.6.1.1 Information to Cardholders ……………………………………………… 10-13.9 Transaction Requirements ………………………………………………………………… 10-23.9.1 Chip Transactions and Hybrid Terminals…………………………………… 10-23.11 Limitation of Liability of Cardholders for Unauthorized Use ………………. 10-35.11 Prohibited Practices ……………………………………………………………………….. 10-45.11.3 Minimum/Maximum Transaction Amount Prohibited ……………….. 10-45.13 Discounts or Other Benefits at the Point of Interaction …………………….. 10-56.2 Affinity and Co-Brand Card Programs ……………………………………………….. 10-56.2.5 Multiple Partners …………………………………………………………………….. 10-56.3 Brand Value Transactions and Proprietary Accounts ………………………….. 10-66.3.2 Fees and Reporting Requirements …………………………………………….. 10-69.5 Establishment of Intracountry Interchange and Service Fees ……………….. 10-69.5.3 Bilateral Agreement …………………………………………………………………. 10-6Asia/Pacific Region RulesOrganization of this Chapter©1969–2010 MasterCardMasterCard Rules • 24 November 2010 10-1Organization of this ChapterThe Rules in this Chapter 10 are variances and additions to the “global” Rulesthat apply in the Asia/Pacific Region.Refer to Appendix A for the Asia/Pacific Region geographic listing.3.6 Provision and Use of Information3.6.1 Obligation of Member to Provide Information3.6.1.1 Information to CardholdersThe Issuer must provide information to its Cardholders as set forth below.1. Card Solicitations. Each Issuer of Cards must disclose, clearly andconspicuously, in all Solicitations any amounts relating to the MasterCardIssuer Cross-border Assessment and/or the MasterCard CurrencyConversion Assessment that the Issuer charges, or will charge, to theCardholder.2. Cardholder Communications. Each Issuer of Cards must disclose, clearlyand conspicuously, in all existing Cardholder Communications, includingCardholder agreements and account agreements, any amounts relating tothe MasterCard Issuer Cross-border Assessment and/or the MasterCardCurrency Conversion Assessment that the Issuer charges, or will charge, tothe Cardholder.3. Periodic Billing Statement. Each Issuer of Cards must provide adequatedisclosure on each applicable periodic billing statement, such that theCardholder can readily determine from the billing statement any amountsthat the Issuer charges to the Cardholder relating to the MasterCard IssuerCross-border Assessment and/or the MasterCard Currency ConversionAssessment during that billing cycle, either in gross or on a per Transactionbasis.Asia/Pacific Region Rules3.9 Transaction Requirements10-2©1969–2010 MasterCard24 November 2010 • MasterCard Rules4. Currency Conversion Procedure. The Corporation further recommends andencourages Issuers to inform their Cardholders that part of theCorporation’s currency conversion procedure includes use of either agovernment-mandated exchange rate or a wholesale exchange rate,selected by the Corporation, and that the government-mandated exchangerate or wholesale exchange rate that the Corporation uses for a particularTransaction is the rate the Corporation selects for the applicable currencyon date that the Transaction is processed (the Central Site Business Date),which may differ from the rate selected on the date the Transactionoccurred or on the date the Transaction is posted to the Cardholder’saccount.For information about the MasterCard Currency Conversion Assessment, referto the GCMS Reference Manual. For information about the MasterCard CrossborderAssessment, refer to the MasterCard Consolidated Billing System—Asia/Pacific Region manual.3.9 Transaction Requirements3.9.1 Chip Transactions and Hybrid TerminalsRule 3.9.1 of Chapter 3, “Member Obligations,” is modified to include thefollowing.For purposes of these Rules, a counterfeit Transaction is a type of fraudulentTransaction; “chip-capable” means the ability to become EMV compliant; and“EMV-compliant” means in compliance with the EMV standards then in effect.1. New Chip-Capable Terminals. All new ATMs and POI terminals deployedby Regional Members and capable of accepting EMV chip Cards (credit ordebit) must be EMV-compliant in accordance with the Standards.2. Incentive Interchange Rate. An incentive interchange rate applies tointraregional chip Transactions to:a. Compensate the Issuers of Cards with an increased intraregionalinterchange of ten basis points when the Card is used at a non-EMVcompliant terminal.b. Compensate the Acquirers using EMV-compliant terminals with areduced intraregional interchange of ten basis points when a non–EMV-compliant Card is used at that terminal.3. Chip Cards. All new and reissued EMV chip Cards (credit or debit) mustbe EMV-compliant in accordance with the Standards.Asia/Pacific Region Rules3.11 Limitation of Liability of Cardholders for Unauthorized Use©1969–2010 MasterCardMasterCard Rules • 24 November 2010 10-34. Chip Liability Shift. The liability for intraregional counterfeit Transactionsin which one Regional Member (either the Issuer or the Acquirer) is not yetEMV-compliant is borne by the non–EMV-compliant Regional Member.Effective 15 October 2010, an interregional chip liability shift will take effectbetween the Asia/Pacific and South Asia/Middle East/Africa Regions. Allcountries within each of these regions will participate.3.11 Limitation of Liability of Cardholders forUnauthorized UseThe following applies with respect to Asia/Pacific Region Cardholders.1. Limitation on Amount. Subject to laws of the country within which a Cardis issued, the liability of a Cardholder for unauthorized use of a Card(regardless of the type of account to which Transactions initiated with suchCard are posted):a. shall not exceed USD 0 if the conditions set forth in paragraph 2 belowhave been met; orb. shall be in accordance with the corresponding Cardholder agreement ifthe conditions set forth in paragraph 2 below have not been met.2. Conditions to USD 0 Liability. The liability limitations set forth in clause (a)of paragraph 1, above, shall apply only if:a. the Cardholder has exercised vigilant care in safeguarding such cardfrom risk of loss, theft, or unauthorized use;b. the Cardholder immediately and without delay notifies the Issuer upondiscovery of the loss, theft, or unauthorized use;c. the Cardholder has not reported two or more incidents of unauthorizeduse to the Issuer in the immediately preceding 12-month period;d. the account to which Transactions initiated with such card are posted isin good standing; ande. the Cardholder has complied with the terms and conditions of thecorresponding Cardholder agreement.3. Effect of Other Applicable Law or Agreement. If country, provincial, orlocal law, or an agreement between a Cardholder and the Issuer of a Card(regardless of the type of account to which Transactions initiated with suchCard are posted) imposes lesser liability than that provided in this Rule, thelesser liability shall govern.Asia/Pacific Region Rules5.11 Prohibited Practices10-4©1969–2010 MasterCard24 November 2010 • MasterCard Rules4. Unauthorized Use. For purposes of this Rule, “unauthorized use” meansthe use of a Card (regardless of the type of account to which Transactionsinitiated with such Card are posted) by a person other than the Cardholderwho does not have actual, implied, or apparent authority for such use, andfrom which the Cardholder receives no benefit.5. Non-applicability. This Rule shall not apply to Cards issueda. to an entity other than a natural person;b. primarily for business, commercial, or agricultural purposes; orc. if a PIN is used as the Cardholder verification method for unauthorizedTransaction(s).5.11 Prohibited Practices5.11.3 Minimum/Maximum Transaction Amount ProhibitedRule 5.11.3 of Chapter 5, “Merchants and Sales Transactions” as it applies inAmerican Samoa, Guam, and the Northern Mariana Islands is modified toinclude the following:A Merchant may set a minimum Transaction amount to accept a Card thatprovides access to a credit account, under the following conditions:1. the minimum Transaction amount does not differentiate between Issuers;and2. the minimum Transaction amount does not differentiate betweenMasterCard and another acceptance brand; and3. the minimum Transaction amount does not exceed USD 10 (or any higheramount established by the Federal Reserve by regulation).A Merchant may set a maximum Transaction amount to accept a Card thatprovides access to a credit account, under the following conditions:1. the Merchant:a. is a department, agency or instrumentality of the U.S. Government; orb. is a corporation owned or controlled by the U.S. Government; orc. is a Merchant whose primary business is reflected by one of thefollowing MCCs:i. MCC 8220—Colleges, Universities, Professional Schools, JuniorColleges; orii. MCC 8244—Schools, Business and Secretarial; or*chg*Asia/Pacific Region Rules5.13 Discounts or Other Benefits at the Point of Interaction©1969–2010 MasterCardMasterCard Rules • 24 November 2010 10-5iii. MCC 8249—Schools, Trade and Vocational; and2. the maximum Transaction amount does not differentiate between Issuers;and3. the maximum Transaction amount does not differentiate betweenMasterCard and another acceptance brand.5.13 Discounts or Other Benefits at the Point ofInteractionA discount or other point of interaction benefit may be applied at a POI uponpresentation of a particular Card for payment. Promotion of any such discountor other benefit at the POI is permitted provided such promotion does notresult in discrimination against other Card Programs. The determination ofwhether any promotion discriminates against other Card Programs is at thesole discretion of the Corporation.6.2 Affinity and Co-Brand Card Programs6.2.5 Multiple PartnersRule 6.2.5 of Chapter 6, “Special Issuer Programs,” is modified such that up totwo Partners’ names or logos or both may appear on the face of the Cardsubject to the following conditions:1. the Card design shall comply in all respects with the Card designrequirements published in the Card Design Standards System2. the MasterCard Brand Mark is not obscured by the proliferation of othernames or logos or both and the presence of multiple logos does not in anyway damage or impair the strength of the MasterCard brand;3. the decision as to whether any given Card design conforms to theseconditions is reserved to the Corporation’s staff.*chg*Asia/Pacific Region Rules6.3 Brand Value Transactions and Proprietary Accounts10-6©1969–2010 MasterCard24 November 2010 • MasterCard Rules6.3 Brand Value Transactions and Proprietary Accounts6.3.2 Fees and Reporting RequirementsRule 6.3.2 of Chapter 6, “Special Issuer Programs,” is modified such that forPrograms that are approved for proprietary account access, any proprietaryaccount fees that may be in effect may be waived on a case-by-case basis atthe sole discretion of the Corporation.9.5 Establishment of Intracountry Interchange and ServiceFees9.5.3 Bilateral AgreementRule 9.5.3 of Chapter 9, “Settlement,” is modified to include the following:All interchange fees applicable to Intracountry Transactions contained in abilateral agreement must not exceed the maximum interchange fee set by theCorporation (the “MasterCard maximum interchange fee”).©1969–2010 MasterCardMasterCard Rules • 29 October 2010 10a-i10a New Zealand RulesThis chapter contains Rules that apply only in New Zealand.Organization of this Chapter ………………………………………………………………… 10a-1Definitions …………………………………………………………………………………………. 10a-12.6 Obligation to Issue Cards ……………………………………………………………….. 10a-12.7 Liability for Assigned ICAs and BINs ……………………………………………….. 10a-24.2 General Rules for Use of the Marks ………………………………………………… 10a-24.2.6 Particular Use of a Mark ………………………………………………………… 10a-24.2.6.6 Use on Cards ………………………………………………………………… 10a-25.1 The Merchant Agreement……………………………………………………………….. 10a-25.1.2 Required Terms …………………………………………………………………….. 10a-25.8 Card Acceptance Requirements ………………………………………………………. 10a-35.8.1 Honor All Cards…………………………………………………………………….. 10a-35.8.2 Merchant Acceptance …………………………………………………………….. 10a-35.11 Prohibited Practices ……………………………………………………………………… 10a-35.11.1 Discrimination …………………………………………………………………….. 10a-35.11.2 Charges to Cardholders ………………………………………………………… 10a-49.4 Interchange and Service Fees …………………………………………………………. 10a-49.5 Establishment of Intracountry Interchange and Service Fees ……………… 10a-49.5.1 Default Intracountry Fees ………………………………………………………. 10a-59.5.2 Intraregional Fees ………………………………………………………………….. 10a-5New Zealand RulesOrganization of this Chapter©1969–2010 MasterCardMasterCard Rules • 29 October 2010 10a-1Organization of this ChapterThe Rules in this Chapter 10a are variances and additions to the “global” Rulesthat apply in New Zealand.Except for Rule 5.9.1 and Rule 5.9.2 of this Chapter 10a, which apply to allCards, the Rules in this Chapter 11a apply to Cards issued in New Zealand byNew Zealand Members and presented for payment at Merchant locations inNew Zealand. Members and Merchants in New Zealand must continue tocomply with the global rules for Cards issued by Members outside of NewZealand and presented for payment at Merchant locations in New Zealand.For the avoidance of doubt, the Rules in this Chapter 10a do not apply to(i) Cirrus-only cards; or (ii) Maestro-only cards.DefinitionsSolely for the purposes of this Chapter 10a, the following terms have themeanings set forth below:1. “Debit” or “Debit MasterCard Card” or “Debit Card” shall mean anyMasterCard consumer device, program, or card issued in New Zealand, bya New Zealand member, that when presented for payment in NewZealand, accesses, debits, holds, or settles funds from a consumer’sdemand deposit or asset account.“Debit” or “Debit MasterCard Card” shall include consumer signature debitprograms, stored value programs, prepaid cards, payroll cards, electronicbenefit transfer cards, and deferred debit cards that access, debit, hold, orsettle funds from the user’s demand deposit or asset account less thanfourteen days after the date of purchase. “Debit” shall not include anypoint-of-sale device that accesses, debits, hold, or settles funds from theuser’s demand deposit or asset account fourteen or more days after thedate of the purchase.2. “Other MasterCard Card” shall mean any MasterCard device, program, orcard that is not defined as “debit” or “Debit MasterCard Card.”2.6 Obligation to Issue CardsRule 2.6 of Chapter 2, “Licensing and Licensed Activities,” does not apply inNew Zealand.New Zealand Rules2.7 Liability for Assigned ICAs and BINs10a-2©1969–2010 MasterCard29 October 2010 • MasterCard Rules2.7 Liability for Assigned ICAs and BINsRule 2.7 of Chapter 2, “Licensing and Licensed Activities,” is modified asfollows:Members must use specific and unique bank identification numbers (BINs) forDebit MasterCard Cards. Acquirers must provide a complete list of the BINsthat apply to Debit MasterCard Cards to Merchants upon any form ofreasonable request.4.2 General Rules for Use of the Marks4.2.6 Particular Use of a Mark4.2.6.6 Use on CardsRule 4.2.6.6 of Chapter 4, “Trademarks and Service Marks,” is modified asfollows:Members must display (i) the Debit MasterCard Hologram instead of theMasterCard Global Hologram on the front of all Debit MasterCard Cards issuedin New Zealand, in the position required for the MasterCard Global Hologram,or (ii) the “Debit” word mark on the card front if the Debit MasterCardHologram is on the Card back.Debit MasterCard Cards must conform to the Standards set forth in the SecurityRules and Procedures manual and the Card Design Standards System.5.1 The Merchant Agreement5.1.2 Required TermsRule 5.1.2 of Chapter 9, “Merchants and Sales Transactions,” is modified toinclude the following:Merchant Agreements must provide the Merchant with the option, and theapplicable Merchant discount rate for each option, to elect to accept DebitMasterCard Cards only, Other MasterCard Cards only, or both Debit MasterCardCards and Other MasterCard Cards. A Merchant may choose to stop acceptingDebit MasterCard Cards or Other MasterCard Cards by providing no less than30 days advance written notice to its Acquirer.New Zealand Rules5.8 Card Acceptance Requirements©1969–2010 MasterCardMasterCard Rules • 29 October 2010 10a-35.8 Card Acceptance Requirements5.8.1 Honor All CardsRule 5.8.1 of Chapter 5, “Merchants and Sales Transactions,” is modified asfollows:Honor All Debit MasterCard Cards. Subject to Rule 5.11.1 of this Chapter 10a,Merchants that choose to accept Debit MasterCard Cards must honor all validDebit MasterCard Cards without discrimination when properly presented forpayment. Merchants must maintain a policy that does not discriminate amongcustomers seeking to make purchases with a Debit MasterCard Card.Honor All Other MasterCard Cards. Subject to Rule 5.11.1 of this Chapter 10a,Merchants that choose to accept Other MasterCard Cards must honor all OtherMasterCard Cards without discrimination when properly presented forpayment. Merchants must maintain a policy that does not discriminate amongcustomers seeking to make purchases with Other MasterCard Cards.5.8.2 Merchant AcceptanceMerchants that accept Cards may choose to accept Debit MasterCard Cardsonly, Other MasterCard Cards only, or both Debit MasterCard cards and OtherMasterCard cards.Acquirers must advise the Corporation when a New Zealand merchant choosesnot to accept either Debit MasterCard Cards or other MasterCard Cards.5.11 Prohibited Practices5.11.1 DiscriminationRule 5.11.1 of Chapter 5, “Merchants and Sales Transactions,” is modified toinclude the following:The Corporation will not consider steering at the point of sale by offeringdiscounts, promotions, or financial incentives to encourage an alternate formof payment (including as between Cards and EFT POS cards, or cards fromdifferent schemes, or different types of Cards) of itself to constitute a breach ofRule 5.11.1 or any other rule. Further, the Corporation will not considermerchant surcharging pursuant to Rule 5.11.2 of this Chapter 10a to constitutea breach of Rule 5.11.1.New Zealand Rules9.4 Interchange and Service Fees10a-4©1969–2010 MasterCard29 October 2010 • MasterCard Rules5.11.2 Charges to CardholdersRule 5.11.2 of Chapter 5, “Merchants and Sales Transactions,” does not apply inNew Zealand.If a Merchant applies a surcharge for payment by Card, the amount or methodof calculation of the surcharge must be clearly indicated to the Cardholder atthe time of purchase and must bear reasonable relationship to the Merchant’scost of accepting Cards.9.4 Interchange and Service FeesRule 9.4 of Chapter 9, “Settlement,” is modified to exclude IntracountryTransactions from the list of Transactions for which the Corporation mayestablish default interchange and service fees.9.5 Establishment of Intracountry Interchange and ServiceFeesRule 9.5 of Chapter 9, “Settlement,” is replaced in its entirety with thefollowing:This Rule 9.5 is applicable only to Intracountry Transactions and intracountrycash disbursements.Intracountry TransactionsThe Corporation will establish and publish on its Web site containing contentspecific to New Zealand and in such other manner as the Corporation deemsappropriate, maximum interchange fees for all Intracountry Transactions(herein, the “MasterCard maximum interchange fee”). Issuers and Acquirersmay negotiate bilateral interchange fees (subject to any MasterCard maximuminterchange fee) and Issuers may determine interchange fees applicable totheir Intracountry Transactions (subject to any bilateral agreements and subjectto any MasterCard maximum interchange fee). Issuers must ensure that withrespect to each of their Intracountry Transactions, neither a negotiated bilateralinterchange fee nor an interchange fee set by the Issuer results in aninterchange amount with respect to that Intracountry Transaction that exceedsthe interchange amount payable pursuant to the maximum interchange fee setby the Corporation.New Zealand Rules9.5 Establishment of Intracountry Interchange and Service Fees©1969–2010 MasterCardMasterCard Rules • 29 October 2010 10a-5An Issuer must promptly notify the Corporation of the interchange feesapplicable to its Intracountry Transactions, said fees must not exceed themaximum interchange fee set by the Corporation. If an Issuer does notprovide the Corporation with an interchange fee that applies to each of itsIntracountry Transactions, then the Corporation will process the Transaction onthe basis of a zero interchange fee.Each Issuer must publish the intracountry interchange fees notified to theCorporation on its Web site except for those interchange fees which aresubject to a bilateral agreement. The Corporation either will publish on itsWeb site containing content specific to New Zealand the Issuer’s intracountryinterchange fees (except for those interchange fees which are subject to abilateral agreement) or will provide a link from its Web site to the relevantpage of the Issuer’s Web site.9.5.1 Default Intracountry FeesRule 9.5.1 of Chapter 9, “Settlement,” is modified to exclude default feesestablished for Intracountry Transactions by the affirmative vote of Membersthat hold a License for the country and represent at least 75 percent of theintracountry issuing Volume (excluding On-Us Volume) and at least 75 percentof the intracountry acquiring Volume (excluding On-Us Volume) in thepreceding calendar year. For the avoidance of doubt, Rule 9.5.1 applies in itsentirety to intracountry cash disbursements.9.5.2 Intraregional FeesRule 9.5.2 of Chapter 9, “Settlement,” is modified to exclude intraregional orinterregional fees from applying by default to Intracountry Transactions. Forthe avoidance of doubt, Rule 9.5.2 applies in its entirety to intracountry cashdisbursements.©1969–2010 MasterCardMasterCard Rules • 29 October 2010 11-i11 Canada Region RulesThis chapter contains Rules that apply only to the Canada Region.Organization of this Chapter ………………………………………………………………….. 11-13.9 Transaction Requirements ………………………………………………………………… 11-13.9.1 Chip Transactions and Hybrid Terminals…………………………………… 11-13.9.4 Automated Fuel Dispenser Transactions ……………………………………. 11-13.9.9 MasterCard PayPass Transactions ……………………………………………… 11-23.11 Limitation of Liability of Cardholders for Unauthorized Use ………………. 11-25.2 Acquirer Obligations ……………………………………………………………………….. 11-35.2.4 Payments to Merchants ……………………………………………………………. 11-35.13 Discounts or Other Benefits at the Point of Interaction …………………….. 11-3Canada Region RulesOrganization of this Chapter©1969–2010 MasterCardMasterCard Rules • 29 October 2010 11-1Organization of this ChapterThe Rules in this Chapter 11 are variances and additions to the “global” Rulesthat apply in the Canada Region.3.9 Transaction Requirements3.9.1 Chip Transactions and Hybrid TerminalsRule 3.9.1 of Chapter 3, “Member Obligations” is modified to include thefollowing:For purposes of these Rules, “EMV chip-compliant” means operating any chipdevice including cards, ATMs, point-of-interaction (POI) terminals, electroniccash registers (ECRs), PIN pads, and terminals that are in accordance fully withthe Standards relative to EMV standards; and “chip/PIN-compliant” meansissuing hybrid PIN-preferring Cards or operating hybrid PIN-capable terminalsas such terms are defined in section 2.8.1.1 of the Chargeback Guide.1. Chip Liability Shift. Effective 31 March 2011, the liability for Canadaintraregional counterfeit Transactions in which one Member (either theIssuer or the Acquirer) is not yet EMV chip-compliant is borne by the non-EMV chip-compliant Member. Message reason code 4870 (Chip LiabilityShift) does not apply to intraregional MasterCard PayPass Transactionsunder the chargeback protection amount.2. Chip/PIN Liability Shift. Effective 31 March 2011, the liability for Canadaintraregional lost, stolen, and never-received-issue Transactions in whichone Member (either the Issuer or the Acquirer) is not yet able to supportchip/PIN Transactions will be borne by the non-chip/PIN-compliantMember. Message reason code 4871 (Chip/PIN Liability Shift) does notapply to intraregional MasterCard PayPass Transactions under thechargeback protection amount.Refer to Appendix C of the Chargeback Guide for chargeback protectionamount information.3.9.4 Automated Fuel Dispenser TransactionsIf an Issuer approves an authorization request for a Cardholder-activatedautomated fuel dispenser Transaction identified with MCC 5542 and CAT level2 (an “AFD Transaction”) occurring at a Merchant located in the Canadaregion, then within 60 minutes of the time that the authorization requestmessage was sent, the Acquirer must send an authorization advice messageadvising the Issuer of the Transaction amount.*chg**chg**chg*Canada Region Rules3.11 Limitation of Liability of Cardholders for Unauthorized Use11-2©1969–2010 MasterCard29 October 2010 • MasterCard RulesIf after approving an authorization request for an AFD Transaction the Issuerhas placed a hold on Cardholder funds in excess of CAD 1, then within 60minutes of receiving the Acquirer’s authorization advice (0120 or 0420)message, the Issuer must release any hold amount that exceeds theTransaction amount.Refer to section 2.7.2.3 of the Chargeback Guide for CAT level 2 requirements.3.9.9 MasterCard PayPass TransactionsProof of a Cardholder Verification Method (signature or PIN) is not a validsecond presentment remedy under message reason code 4837 (No CardholderAuthorization) for an intraregional MasterCard PayPass Transaction thatexceeds the chargeback protection amount.3.11 Limitation of Liability of Cardholders forUnauthorized UseThe following applies with respect to Canada Region Cardholders:1. Limitation on amount. The liability of a Cardholder for unauthorized useof a Card (regardless of the type of account to which Transactions initiatedwith such Card are posted) shall not exceeda. CAD 0 if the conditions set forth in paragraph 2, below, have beenmet, orb. if the conditions set forth in paragraph 2 have not been met, the lesserof CAD 50 or the amount of money, property, labor, or servicesobtained by the unauthorized use before notification to the Issuer.2. Conditions to CAD 0 liability. The liability limitations set forth in clause(i) of paragraph 1, above, shall apply only ifa. the Cardholder has exercised reasonable care in safeguarding suchCard from risk of loss or theft;b. the Cardholder has not reported two or more incidents of unauthorizeduse to the Issuer in the immediately preceding 12-month period; andc. the account to which Transactions initiated with such Card are postedis in good standing.3. Effect of other applicable law agreement. If federal, provincial or locallaw, or an agreement between a Cardholder and the Issuer of a Card(regardless of the type of account to which Transactions initiated with suchCard are posted) imposes lesser liability than that provided in this Rule, thelesser liability shall govern.*chg**chg*Canada Region Rules5.2 Acquirer Obligations©1969–2010 MasterCardMasterCard Rules • 29 October 2010 11-34. Unauthorized use. For purposes of this Rule, “unauthorized use” meansthe use of a Card (regardless of the type of account to which Transactionsinitiated with such Card are posted) by a person other than the Cardholderwho does not have actual, implied, or apparent authority for such use, andfrom which the Cardholder receives no benefit.5. Nonapplicability. This Rule shall not apply to Cards issueda. to an entity other than a natural person; orb. primarily for business, commercial, or agricultural purposes.5.2 Acquirer Obligations5.2.4 Payments to MerchantsRule 5.2.4 of Chapter 5, “Merchants and Sales Transactions,” is modified toinclude the following:Each Member that acquires Transactions from Canadian Merchants must have adeposit account for each Merchant from which it acquires such Transactions,and the proceeds of such Transactions must be deposited by the Member insuch Merchant’s deposit account.5.13 Discounts or Other Benefits at the Point ofInteractionThe use of an Affinity Card Program or Co-Brand Card Program Card toactivate a discount or other benefit at the POI that is not available on similarpurchases with the use of any other Card is permitted for Transactions effectedwholly within the Region. The determination of whether any such discount orother POI benefit practice complies with the Standards is at the sole discretionof the Corporation’s staff.©1969–2010 MasterCardMasterCard Rules • 10 December 2010 11a-i11a Canada Region Code of Conduct Related RulesThis chapter contains Rules that apply only to the Canada Region. This is a newchapter.Organization of this Chapter ………………………………………………………………….. 11-1Definitions …………………………………………………………………………………………… 11-12.6 Obligation to Issue Cards …………………………………………………………………. 11-23.6 Provision and Use of Information …………………………………………………….. 11-23.6.1 Obligation of Member to Provide Information …………………………… 11-23.6.1.2 Information to Merchants ………………………………………………… 11-23.8 Authorization Service ………………………………………………………………………. 11-23.8.1 Selective Authorization ……………………………………………………………. 11-23.14 Accounts on a Card ……………………………………………………………………….. 11-34.2 General Rules for Use of the Marks ………………………………………………….. 11-34.2.6 Particular Use of a Mark ………………………………………………………….. 11-34.2.6.6 Use on Cards ………………………………………………………………….. 11-34.2.13 Use of Other Acceptance Marks on Cards ……………………………….. 11-35.8 Card Acceptance Requirements ………………………………………………………… 11-45.8.1 Honor All Cards………………………………………………………………………. 11-45.11 Prohibited Practices ……………………………………………………………………….. 11-45.11.2 Charges to Cardholders ………………………………………………………….. 11-4Canada Region Code of Conduct Related RulesOrganization of this Chapter©1969–2010 MasterCardMasterCard Rules • 10 December 2010 11a-1Organization of this ChapterThe Rules in this Chapter 11a are variances and additions to the “global” Rulesthat apply to:1. Cards issued in the Canada Region and presented for payment in theCanada Region;2. Transactions that take place in the Canada Region; and3. Merchants and Acquirers of those Transactions.Members and Merchants must continue to comply with the global Rules withrespect to Cards (as defined in the global Rules) issued by Members outside ofthe Canada Region and presented for payment at Merchant locations in theCanada Region, unless otherwise agreed by the Corporation.DefinitionsSolely for purposes of Rules in this Chapter 11a, the following terms have themeanings set forth below:1. “Card” shall mean a card issued by a Member pursuant to License and inaccordance with the Standards that provides access to a credit and debitMasterCard account. Unless otherwise stated herein, this definition doesnot include an Access Device or a Mobile Payment Device.2. “Cardholder” shall mea the authorized user of a Card issued by a Member.3. “Debit MasterCard Card” or “Debit Card” shall mean any Card issued in theRegion, by a Regional Member, that when presented for payment inCanada, accesses, debits, holds, or settles funds from a consumer’s demanddeposit account.4. “Other Card” shall mean any Card that is not defined as a “Debit Card” or“Debit MasterCard Card.”5. “Premium Card” shall mean MasterCard branded Cards that are issued inthe Region by a Regional Member to a well-defined class of Cardholders inaccordance with MasterCard requirements and specification for same.6. “Transaction” shall mean the sale of goods or services by a Merchant to aCardholder pursuant to acceptance of a Card by the Merchant.*chg*Canada Region Code of Conduct Related Rules2.6 Obligation to Issue Cards11a-2©1969–2010 MasterCard10 December 2010 • MasterCard Rules2.6 Obligation to Issue CardsRule 2.6 of Chapter 2, “Licensing and Licensed Activities,” is modified toinclude the following:Premium Cards may only be provided to a well-defined class of Cardholders,based on individual spending and/or income thresholds. An Issuer may onlyprovide a Premium Card to a person that has applied for or consented toreceiving a Premium Card.3.6 Provision and Use of Information3.6.1 Obligation of Member to Provide Information3.6.1.2 Information to MerchantsAcquirers must provide a minimum of ninety (90) days notice to Merchants ofany fee increases, or the introduction of a new fee related to any Card orTransaction. A Merchant may opt out of its Merchant Agreement, withoutpenalty by the Acquirer, within ninety (90) days of receiving notice of the feeincrease or introduction of a new fee. A Merchant may not opt out of theMerchant Agreement if the fee increase is made in accordance with a predeterminedfee schedule, provided such fee schedule is included in theMerchant Agreement.An Acquirer must obtain the Merchant’s express consent each time a Card withnew Marks, or a Card with Marks not previously accepted by the Merchant,will be accepted by the Merchant.3.8 Authorization Service3.8.1 Selective AuthorizationRule 3.8.1 of Chapter 3, “Member Obligations” is modified to include thefollowing:For the purpose of effecting a Transaction, an Issuer must not place competingdomestic applications of other payment card networks on a Debit Card. Anissuer may place complementary domestic applications on a Debit Card.*chg*Canada Region Code of Conduct Related Rules3.14 Accounts on a Card©1969–2010 MasterCardMasterCard Rules • 10 December 2010 11-33.14 Accounts on a CardAn Issuer must not issue a Card that provides access to a Debit Card accountand to an Other Card account on the same Card. A Card may be either aDebit Card or an Other Card, but must not be both a Debit Card and an OtherCard.4.2 General Rules for Use of the Marks4.2.6 Particular Use of a Mark4.2.6.6 Use on CardsRule 4.2.6.6 of Chapter 4, “Trademarks and Service Marks,” is modified toinclude the following:Clear and Conspicuous Debit Identifier. Members must display:1. the Debit MasterCard Hologram instead of the MasterCard GlobalHologram on all Debit MasterCard Cards issued in Canada, in the positionrequired for the MasterCard Global Hologram, or2. the “Debit” word mark on the Card front if the Debit MasterCard Hologramis on the Card back. Debit MasterCard Cards must conform to theStandards set forth in the Card Design Standards.4.2.13 Use of Other Acceptance Marks on CardsRule 4.2.13 of Chapter 4, “Trademarks and Service Marks,” is modified toinclude the following:When the Marks appear on a Debit Card that contains other acceptance marks,no other acceptance mark, symbol or logo may be or appear to be larger ormore important than the Marks. To maintain visual parity, the Marks must beat least as prominent as and be at least the same size and color treatment asany other acceptance mark on the Card. When other acceptance marks appearon a Debit Card, those marks must appear on the same side of the Debit Cardas the Marks.*chg*Canada Region Code of Conduct Related Rules5.8 Card Acceptance Requirements11a-2©1969–2010 MasterCard10 December 2010 • MasterCard Rules5.8 Card Acceptance Requirements5.8.1 Honor All CardsRule 5.8.1 of Chapter 5, “Merchants and Sales Transactions,” is replaced withthe following:Honor All Debit MasterCard Cards. Merchants that choose to accept DebitMasterCard Cards must honor all valid Debit MasterCard Cards withoutdiscrimination when properly presented for payment. The Merchant mustmaintain a policy that does not discriminate among customers seeking to makepurchases with a Debit MasterCard Card.Honor All Other MasterCard Cards. Merchants that choose to accept Other Cardsmust honor all Other Cards without discrimination when properly presentedfor payment. The Merchant must maintain a policy that does not discriminateamong customers seeking to make purchases with another Card.5.11 Prohibited Practices5.11.2 Charges to CardholdersRule 5.11.2 of Chapter 5, “Merchants and Sales Transactions,” is modified toinclude the following:In addition to a discount for cash, a Merchant may provide a discount to itscustomers for other forms of payment, including differential discounts for otherpayment brands. Such discounts must be clearly communicated at the Point ofInteraction.*chg*©1969–2010 MasterCardMasterCard Rules • 29 October 2010 12-i12 Europe Region RulesThis chapter contains Rules that apply only in the Europe Region.Organization of this Chapter ………………………………………………………………….. 12-1Definitions …………………………………………………………………………………………… 12-11.2 Eligibility to be a Member ………………………………………………………………… 12-31.2.1 Principal Member or Affiliate Member ………………………………………. 12-32.3 Area of Use …………………………………………………………………………………….. 12-32.3.1 Extending or Otherwise Modifying the Area of Use …………………… 12-32.3.2 Central Acquiring ……………………………………………………………………. 12-32.3.2.1 Central Acquiring Registration ………………………………………….. 12-32.3.2.2 Central Acquirer Service Requirements ……………………………… 12-42.3.2.3 Intracountry Rules …………………………………………………………… 12-42.3.2.4 Centrally Acquired Merchants ………………………………………….. 12-52.3.2.4.1 Updating of Merchant Details ………………………………….. 12-52.3.2.5 Registration Procedure …………………………………………………….. 12-52.3.2.6 Extension of Registration …………………………………………………. 12-62.3.2.7 Interchange Fee Requirements …………………………………………. 12-62.3.2.8 Settlement of Disputes …………………………………………………….. 12-62.3.2.9 Member Noncompliance …………………………………………………. 12-72.6 Obligation to Issue Cards …………………………………………………………………. 12-73.1 Standards ……………………………………………………………………………………….. 12-73.1.3 Rules Applicable to Intracountry Transactions …………………………… 12-73.1.3.1 Order of Precedence ……………………………………………………….. 12-83.1.4 Communication of Intracountry Fallback Rules………………………….. 12-83.4 Choice of Laws ……………………………………………………………………………….. 12-93.6 Provision and Use of Information …………………………………………………….. 12-93.6.1 Obligation to Provide Information ……………………………………………. 12-93.6.1.1 Information to Cardholders ……………………………………………. 12-103.6.1.2 Information to Merchants ………………………………………………. 12-113.6.5 Data Protection ……………………………………………………………………… 12-123.6.5.1 Processing of Transaction-Related Personal Data ……………… 12-133.6.5.2 Data Subject Notice and Consent ……………………………………. 12-133.6.5.3 Data Subject Access to Personal Data ……………………………… 12-14Europe Region Rules12-ii©1969–2010 MasterCard29 October 2010 • MasterCard Rules3.6.5.4 Integrity of Personal Data ………………………………………………. 12-143.9 Transaction Requirements ………………………………………………………………. 12-143.9.1 Chip Transactions and Hybrid Terminals…………………………………. 12-143.9.2 CVC 2 Processing for Card-Not-Present Transactions ……………….. 12-153.9.5 Issuer Performance Standards…………………………………………………. 12-163.9.5.1 Issuer Failure Rate (Substandard Performance) ………………… 12-163.9.5.2 Calculation of the Issuer Failure Rate ……………………………… 12-163.9.5.3 Assessments for Substandard Performance ………………………. 12-173.9.7 Euro Migration ………………………………………………………………………. 12-174.1 Right to Use the Marks …………………………………………………………………… 12-184.1.2 Protection and Registration of the Marks …………………………………. 12-185.1 The Merchant Agreement……………………………………………………………….. 12-185.1.2 Required Terms …………………………………………………………………….. 12-185.8 Card Acceptance Requirements ………………………………………………………. 12-185.8.2 Merchant Acceptance …………………………………………………………….. 12-185.8.6 Purchase with Cash Back Transactions ……………………………………. 12-195.11 Prohibited Practices ……………………………………………………………………… 12-215.11.2 Charges to Cardholders ………………………………………………………… 12-215.13 Discounts or Other Benefits at the Point of Interaction …………………… 12-216.2 Affinity and Co-Brand Card Programs ……………………………………………… 12-216.2.5 Multiple Partners …………………………………………………………………… 12-216.3 Co-Residing Applications ……………………………………………………………….. 12-216.3.1 Definitions ……………………………………………………………………………. 12-216.3.2 Basic Requirements ……………………………………………………………….. 12-226.3.3 Notification …………………………………………………………………………… 12-228.3 Maximum Cash Disbursement Amounts ………………………………………….. 12-22Europe Region RulesOrganization of this Chapter©1969–2010 MasterCardMasterCard Rules • 29 October 2010 12-1Organization of this ChapterThe Rules in this Chapter 12 are variances and additions to the “global” Rulesthat apply in the Europe Region.Refer to Appendix A for the Europe Region geographic listing.DefinitionsSolely for the purposes of Rules in this Chapter 12 and in Chapters 12a and12b, the following terms have the meanings set forth below.1. “Commercial Card” means in the EEA a Card issued to an undertaking orpublic sector entity or one of its employees and that is intended for use inconnection with business expenses made by that undertaking or publicsector entity or by its employee, or a Card issued to a self-employednatural person engaged in a business activity and that is intended for usefor business expenses. Cards fitting the above definition that are inissuance in the EEA after 31 December 2010 must be identifiable asCommercial Cards.2. “Consumer Card” means in the EEA a Card issued to a natural person thatis not used primarily for business expenses.3. “Credit Card” means in the EEA a Consumer Card that allows thecardholder to make purchases with a certain credit amount, which can besettled in full by the end of a specified period (which typically is interestfree)or can be settled in part, with the remaining balance being taken ascredit and charged with interest. A Credit Card may be linked to a currentaccount at a deposit-taking institution or to an account that has been setup specifically for the use of the Credit Card. Credit Cards include charge(or delayed debit) Cards. A charge (or delayed debit) Card is a Card thatallows the Cardholder to make purchases but does not offer credit, theamount of the debit having to be settled in full only after a specifiedperiod (which typically is interest-free). A charge (or delayed debit) Cardmay be linked to a current account at a deposit-taking institution or to anaccount that has been set up specifically for the use of the charge (ordelayed debit) Card.Europe Region RulesDefinitions12-2©1969–2010 MasterCard29 October 2010 • MasterCard Rules4. “Debit Card” means in the EEA a Consumer Card that allows a cardholderto charge purchases directly to a current account at a deposit-takinginstitution. The Debit Card serves as a device to access funds in a currentaccount. A Debit Card Transaction is always directly charged to a currentaccount i.e. no later than two business days after the clearing of theTransaction, whereas a Credit (or charge or delayed debit) CardTransaction may be settled by the end of a specified period or charged to acurrent account more than two business days after the clearing of thatTransaction. Cards fitting the above definition that are in issuance in theEEA after 31 December 2010 must be identifiable as Debit Cards.5. “European Economic Area” (EEA) means the following countries: Austria,Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland,France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia,Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland,Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and UnitedKingdom.6. “Intra-SEPA Transaction” means a Transaction completed using a Cardissued in a country or territory included in the SEPA geographic listing inAppendix A at a point of interaction located in a country or territoryincluded in the SEPA geographic listing in Appendix A.7. “Non-Intracountry Transaction” means a Transaction completed at aMerchant located outside the country in which the Card is issued.8. “Payment Scheme” means MasterCard Incorporated, including all of itssubsidiaries and affiliates, its products and services, the Standards thatgovern the products and services, and its Members.9. “Stand-In Parameters” means a set of authorization requirementsestablished by the Corporation or the Issuer that are accessed by theInterchange System using the Stand-In Processing Service to determine theappropriate responses to authorization requests.10. “Stand-In Processing Service” means a service offered by the Corporationin which the Interchange System authorizes or declines Transactions onbehalf of and uses Stand-In Parameters provided by the Issuer (or in somecases, by the Corporation). The Stand-In Processing Service responds onlywhen the Issuer is unavailable, the Transaction cannot be delivered to theIssuer, or the Issuer exceeds the response time parameters set by theCorporation.Europe Region Rules1.2 Eligibility to be a Member©1969–2010 MasterCardMasterCard Rules • 29 October 2010 12-31.2 Eligibility to be a Member1.2.1 Principal Member or Affiliate MemberIn the EEA, Rule 1.2.1 of Chapter 1, “Membership,” is modified as follows:It is not required that financial transactions constitute substantially all of thebusiness conducted by a financial institution located in the EEA that does nottake deposits.2.3 Area of Use2.3.1 Extending or Otherwise Modifying the Area of UseRule 2.3.1, paragraph 8, part (a) of Chapter 2, “Licensing and LicensedActivities,” is modified with respect to Merchants located and acquired in theEurope Region as follows:The ICA number under which e-commerce Transactions are acquired mustreflect either the country in which the Merchant is located or another countryin the Europe Region.2.3.2 Central AcquiringThe rules in this section apply in the Europe Region in place of Rule 2.3.1,paragraphs 5, 6, 7, and 8.Provided that they comply with the provisions of this Rule, Members that holda License may centrally acquire Transactions of Merchants as described in Rule2.3.2.4, including those undertaken in countries for which the Member doesnot hold a License. Members must not acquire Transactions from Merchantssituated outside their Area of Use, except pursuant to this Rule 2.3.2.This Rule 2.3.2 applies to central acquiring in the Europe Region by Memberswith a License for any Europe Region country.2.3.2.1 Central Acquiring RegistrationMembers must have completed the central acquiring registration processbefore they centrally acquire. The central acquiring registration letter specifiesthe countries in which a Member may centrally acquire intraregional MerchantTransactions.Europe Region Rules2.3 Area of Use12-4©1969–2010 MasterCard29 October 2010 • MasterCard Rules2.3.2.2 Central Acquirer Service RequirementsThe Member must authorize, clear and settle centrally acquired Transactions ina manner that does not disadvantage the Cardholder, the Merchant or theIssuer involved in the Transaction in comparison with non-centrally acquiredTransactions. The Member must also comply with the requirements definedbelow.1. AuthorizationsCentral Acquirers must provide Issuers with all information required in theauthorization request, as set forth in the Customer Interface Specificationmanual.A central Acquirer must be able to provide local language voiceauthorization services, itself or through a local Acquirer, at the cost of alocal call if the authorization system is not available or in a country whereTransactions cannot be authorized electronically. If the central Acquirerand local Acquirer cannot agree on a price for these services, the followingrates will apply:• Voice authorization: EUR 4• Call referral: EUR 8.2. ClearingCentral Acquirers must provide details in the clearing record of thelocation, city and country where the Transaction took place.For specific Merchant sectors, central Acquirers must provide additionalinformation in the clearing record if required by the Europe Region, usingthe message formats detailed in the IPM Clearing Formats manual.2.3.2.3 Intracountry RulesCentral Acquirers must comply with the intracountry rules of a country inwhich they centrally acquire Transactions.The Corporation will provide central Acquirers, on request, with theintracountry rules of the country or countries covered by the request. Theadministrative fee for this service, as set forth in the MasterCard ConsolidatedBilling System—Europe SEPA Region or MasterCard Consolidated BillingSystem—Europe non-SEPA Region manual as applicable, or elsewhere, must bepaid at the time when the request is made and before the rules are sent.Europe Region Rules2.3 Area of Use©1969–2010 MasterCardMasterCard Rules • 29 October 2010 12-52.3.2.4 Centrally Acquired MerchantsAn Acquirer may centrally acquire Transactions from any Merchant located inany one of the following Western or Central European countries: Andorra,Austria, Belgium, Bulgaria, Channel Islands, Czech Republic, Cyprus, Denmark,Estonia, Finland, France, Germany, Gibraltar, Greece, Hungary, Iceland,Ireland, Isle of Man, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta,Monaco, Netherlands, Norway, Poland, Portugal, Romania, San Marino,Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom,Vatican City.In all other Europe Region countries, an Acquirer may only centrally acquireTransactions of a Merchant that:1. Operates in more than two Europe Region countries either directly; orthrough wholly-owned subsidiaries; or through a joint venture that requiresconsolidation on the balance sheet of the central company; or under thesame brand name through franchise and/or management contracts.2. Operates a centrally managed delivery system that services subsidiaries andlocal operators and is used to process orders, reservations, sales orpayments; supports the delivery of services (for example, tickets/contracts)or goods; and manages stock or service availability.3. Operates a centrally managed accounting system that monitors treasuryand cash management and payment collections and is used to channel andsupport payment system authorizations.2.3.2.4.1 Updating of Merchant DetailsTo ensure correct system implementation and transaction monitoring, centralAcquirers must inform the Corporation of any changes to the Merchant detailsof any Merchant (excluding Merchants in Western and Central Europeancountries) where Transactions are centralized, including changes to theMerchant’s name and address and to the MCC used for centrally acquiredTransactions. The changes must be communicated by submitting a centralacquiring application form that contains the new details. If changes toMerchant details are not communicated within 30 business days of receipt of awarning letter, the assessment for centrally acquiring Transactions from a nonnotifiedMerchant will be applied.2.3.2.5 Registration ProcedureTo register to centrally acquire in the Western and Central European countrieslisted in Rule 2.3.2.4 above, the Member must submit to the Corporation asingle application form covering all such Western and Central Europeancountries. The central acquiring registration letter will cover all such Westernand Central European countries.Europe Region Rules2.3 Area of Use12-6©1969–2010 MasterCard29 October 2010 • MasterCard RulesTo register to centrally acquire in other countries, the Member must submit tothe Corporation an application form for each Merchant and country where theMember wishes to centrally acquire Transactions.2.3.2.6 Extension of RegistrationIn the Western and Central European countries listed in Rule 10B.2.4 above, acentral Acquirer is not required to comply with any formal procedures in orderto extend its central acquiring Activities to a new country in Western andCentral Europe.In all other countries, a Member that wishes to extend its central acquiringActivities to a new Merchant or country must follow the registration procedureset forth in Rule 2.3.2.5 above.2.3.2.7 Interchange Fee RequirementsIf a central Acquirer acquires an Intracountry Transaction, the followingprinciples apply to the interchange fee:1. The central Acquirer may agree upon bilateral interchange fees with theIssuer; and2. Unless a bilateral agreement applicable to an Intracountry Transaction hasbeen established between two Members, the interchange fees applicable toan Intracountry Transaction set forth in Rule 9.5 will apply.If a central Acquirer acquires a Non-Intracountry Transaction, the followingprinciples apply to the interchange fee:1. The central Acquirer may agree upon bilateral interchange fees with theIssuer; and2. Unless a bilateral agreement applicable to a Non-Intracountry Transactionhas been established between two Members, the interchange feesapplicable to a Non-Intracountry Transaction set forth in Rule 9.4 willapply.2.3.2.8 Settlement of DisputesAny disputes relating to central acquiring will be resolved by the Corporationin accordance with the Standards.Europe Region Rules2.6 Obligation to Issue Cards©1969–2010 MasterCardMasterCard Rules • 29 October 2010 12-72.3.2.9 Member NoncomplianceThe following are examples of violations of the central acquiring rules forwhich noncompliance assessments may be applied:1. Engaging in central acquiring without first registering,2. Engaging in central acquiring in non-notified countries or of non-notifiedMerchants (not applicable for Western and Central European countries).3. Failure to comply with intracountry rules (including application of incorrectinterchange fees) resulting in financial loss to another party.4. Incorrect data in network messages (including incorrect country code)resulting in financial loss to another party.2.6 Obligation to Issue CardsRule 2.6 of Chapter 2, “Licensing and Licensed Activities,” does not apply inthe EEA.3.1 Standards3.1.3 Rules Applicable to Intracountry TransactionsThe following are additional Rules applicable to intracountry Transactions.Refer to Rule 9.5 of Chapter 9, “Settlement,” regarding the establishment ofintracountry interchange fees and intracountry service fees.The Corporation may establish Rules for Intracountry Transactions. TheCorporation will inform Members of all Rules it establishes.If Rules for Intracountry Transactions are not established by the Corporation,the following two options apply as regards establishment of the rules to beapplied to Intracountry Transactions. Members may change from one optionto another upon notice in writing to the Corporation, and fulfillment of anyrequirements associated with the new option.Global Rules (including Europe Region Rules)Members may apply the Rules (including the Europe Region Rules) toIntracountry Transactions. If the other option does not apply, then this optionapplies by default.Europe Region Rules3.1 Standards12-8©1969–2010 MasterCard29 October 2010 • MasterCard RulesIntracountry Fallback Rules (75 percent Rule)If permitted by local law, Members holding Licenses for the country (includingSEPA Licenses) and representing, during the year preceding the agreement, atleast 75 percent of each of the Card issuing and acquiring intracountryVolumes (excluding on-us Volumes), have the power to agree on fallbackRules applicable to all Intracountry Transactions, including those acquired byMembers outside the country. Intracountry fallback rules must be agreed by atleast two Issuers and at least two Acquirers Licensed to engage in Activity inthe country.The percentage is calculated separately for each Card product, as determinedby the Card product identifier and functionality (for example, POS vs. cashdisbursement).Intracountry fallback rules remain in effect until changed or challenged. Ifintracountry fallback rules are challenged because the Members agreeing tothem no longer meet the 75 percent threshold, the Rules (including the EuropeRegion Rules) will apply in their place, as from the date when the Corporationhas determined that the 75 percent threshold is no longer met.Intracountry fallback rules must be non-discriminatory, justifiable and not inconflict with the Rules (including the Europe Region Rules and any Rulesestablished by the Corporation for Intracountry Transactions). Intracountryfallback Rules must not discriminate against Cardholders (includinginternational Cardholders) or jeopardize the integrity of the Payment Scheme.3.1.3.1 Order of PrecedenceFor any Intracountry Transaction, the intracountry Rules established by theCorporation apply, or if none, the intracountry fallback rules established byMembers pursuant to the preceding Rule apply, or if none, the intraregionalRules apply, or if none, the interregional Rules apply.3.1.4 Communication of Intracountry Fallback RulesMembers that agree to intracountry fallback rules must provide the Corporationwith a copy of such rules as well as with any subsequent changes to thoserules. The Corporation must be notified of intracountry fallback rules well inadvance of their effective dates, unless exceptional circumstances make thisimpossible. Exceptional circumstances must be related to events beyond thecontrol of the Members, such as a change in laws or regulations, compliancewith which requires immediate action.Intracountry fallback rules that have not been provided to and acknowledgedby the Corporation are not applicable.Europe Region Rules3.4 Choice of Laws©1969–2010 MasterCardMasterCard Rules • 29 October 2010 12-9The Corporation will endeavor to publish intracountry fallback rules and theirrevisions at least three calendar months prior to their effective dates. Ifexceptional circumstances apply, the period will not be less than one calendarmonth before the effective date. If necessary, the initially notified effectivedate will be delayed to respect these time frames.3.4 Choice of LawsRule 3.4 of Chapter 3, “Member Obligations,” is replaced in its entirety by thefollowing:Licenses are governed by and construed according to the applicable lawmentioned in the particular License, without reference to conflict-of-laws orsimilar provisions that would mandate or permit application of the substantivelaw of any other jurisdictionThe courts mentioned in the particular License have exclusive jurisdiction forthe resolution of any dispute relating to rights and obligations deriving fromLicenses.Licenses concluded after 1 January 2007 will specify English law and courts.The Standards are governed by and construed according to English law,without reference to conflict-of-laws or similar provisions that would mandateor permit the application of substantive law of any other jurisdiction. Englishcourts have exclusive jurisdiction for the resolution of any dispute relating tothe Standards between two Members holding Licenses for countries in theEurope Region.3.6 Provision and Use of Information3.6.1 Obligation to Provide InformationRule 3.6.1 of Chapter 3, “Member Obligations,” is modified to include thefollowing.The Member must provide to the Europe Region the following information onits plans to issue chip Cards and/or acquire chip Transactions:1. Number of chip Cards; and2. Number of chip terminals.Europe Region Rules3.6 Provision and Use of Information12-10©1969–2010 MasterCard29 October 2010 • MasterCard Rules3.6.1.1 Information to CardholdersThe following additional Rules apply in the Europe Region.The Issuer must provide information to its Cardholders as set forth below, inaddition to any information required under applicable laws or regulations.The Europe Region may ask an Issuer to certify its compliance with theseStandards.1. Before the Card is UsedThe Issuer must make information available to Cardholders as to where theCard may be used (that is, wherever, at home or abroad, the relevant Markis displayed). The Issuer must also provide the following information tothe Cardholder:a. The price of the Card.b. Specific charges, if any, to be paid to the Issuer for the kind(s) ofservice (both at home and abroad) provided through the Card.Examples of these charges are: cash advance fee, ATM usage fee, andinterest rate(s) to be applied to credit Card accounts.c. The basis for calculation of the exchange rate.d. Notice that exchange rates can fluctuate and that they may changebetween the time when the transaction is made and the time when it isbilled to the Cardholder’s account.e. For credit and charge Cards, information concerning any auxiliarycharges applicable to the account linked to the Card: for example, feesfor additional statements, account excess fees and late payment fees.f. The Cardholder’s liability, including the cost, if the Card is lost orstolen. This information must be stated clearly in the body of theproduct literature. The Cardholder must also be told what to do if theCard is lost or stolen.g. The standard limit, if any, up to which the Cardholder can use theCard.h. Information concerning when the Transaction is likely to be billed tothe Cardholder’s account.i. Information required to be provided by Rule 3.6.5.2 herein.2. At the Time of Billing the TransactionAs applicable, the following information must be provided to theCardholder:a. Transaction type (for example sale, ATM cash withdrawal, cashadvance), and location (if technically feasible).b. Amount in Transaction currency.Europe Region Rules3.6 Provision and Use of Information©1969–2010 MasterCardMasterCard Rules • 29 October 2010 12-11c. Amount in billing currency.d. Exchange rate applied.e. Total commission applied (if applicable).f. Interest rate applied (if applicable).3.6.1.2 Information to MerchantsThis additional Rule applies only in the EEA.An Acquirer:• must inform existing and prospective Merchants that interchange fees andrules set by the Corporation are available on the MasterCard public Internetsite (www.mastercard.com); and• must inform existing and prospective Merchants that they may applydifferent surcharges to Credit Card Transactions, Commercial CardTransactions, Debit Card Transactions and Maestro transactions, whilerespecting Rule 5.9.2 (Charges to Cardholders) of this Chapter 12.By 31 December 2009, an Acquirer:• must provide to existing and prospective Merchants, upon their request,pricing information that specifies separately (including separately fromthose of any other card network) the financial terms to be applied to CreditCard Transactions, Commercial Card Transactions, Debit Card Transactionsand Maestro transactions. The Acquirer is entitled to charge for the extracost of providing such separate pricing information;• must indicate on Merchant invoices for such Merchants that have requestedseparate pricing, the number of Transactions, Volume and total amount ofthe Merchant service charge separately (including separately from those ofany other card network) for Credit Card Transactions, Commercial CardTransactions, Debit Card Transactions and Maestro transactions. TheAcquirer is entitled to charge for the extra cost of providing such separateinvoice information;• must inform existing and prospective Merchants that they are not obligedto accept Maestro cards and/or the cards of any other network as acondition for accepting Cards; and• may not prohibit existing or prospective Merchants from entering into aMerchant Agreement with any other Acquirer with respect to Credit CardTransactions, Commercial Card Transactions, Debit Card Transactions,Maestro transactions and/or the transactions of other card networks, unlessthe Merchant elects to enter into a Merchant Agreement solely with theAcquirer.Europe Region Rules3.6 Provision and Use of Information12-12©1969–2010 MasterCard29 October 2010 • MasterCard RulesBy 31 December 2010, an Acquirer:• must provide to existing and prospective Merchants pricing informationthat specifies separately (including separately from those of any other cardnetwork) the financial terms to be applied to Credit Card Transactions,Commercial Card Transactions, Debit Card Transactions and Maestrotransactions, unless the Merchant elects that the Acquirer shall not have toprovide such separate pricing information; and• must indicate on Merchant invoices the number of Transactions, Volumeand total amount of the Merchant service charge separately (includingseparately from those of any other card network) for Credit CardTransactions, Commercial Card Transactions, Debit Card Transactions andMaestro transactions, unless the Merchant elects that the Acquirer shall nothave to provide such separate invoice information.3.6.5 Data ProtectionThe following are additional Standards relating to Personal Data. The followingdefinitions are solely for the purposes of Rule 3.6.5 of this chapter:1. “Controller” means the entity which alone or jointly with others determinesthe purposes and the means of the Processing of Personal Data.2. “Data Subject” means a Cardholder or Merchant, or other natural or legalperson (to the extent a legal person is subject to national data protectionlaw) whose Personal Data are processed by a Member in the EEA orSwitzerland and the Corporation.3. “EU Privacy Directive” means, collectively, Directive 95/46/EC of theEuropean Parliament and of the Council of 24 October 1995 on theprotection of individuals with regard to the processing of personal dataand on the free movement of such data and Directive 2002/58/EC of theEuropean Parliament and of the council of 12 July 2002 concerning theprocessing of personal data and the protection of privacy in the electroniccommunications sector, as may be amended from time to time.4. “Personal Data” means any information relating to an identified oridentifiable natural person; an identifiable natural person is one who canbe identified, directly or indirectly, in particular, by reference to anidentification number or to one or more factors specific to his or herphysical, physiological, mental, economic, cultural, or social identity.5. “Processor” means the entity which processes Personal Data on behalf of aController.Europe Region Rules3.6 Provision and Use of Information©1969–2010 MasterCardMasterCard Rules • 29 October 2010 12-136. “Processing of Personal Data” means any operation or set of operationswhich is performed upon Personal Data, whether or not by automaticmeans, such as collection, recording, organization, storage, adaptation oralteration, retrieval, consultation, use, disclosure by transmission,dissemination or otherwise making available, alignment or combination,blocking, erasure or destruction of such data.7. “Transaction-related Personal Data” means Personal Data required forauthorizing, recording, settling and clearing a Transaction processed by theCorporation.3.6.5.1 Processing of Transaction-Related Personal DataWith regard to Transaction-related Personal Data, Members in the EEA orSwitzerland must comply with the applicable national legislation implementingthe EU Privacy Directive or any other applicable data protection law. Membersare Controllers with regard to the Processing of Personal Data for the purposesof authorizing, recording, clearing and settling transactions, and theCorporation acts as a Processor for these purposes.The Corporation will, to the extent it acts as a Processor, only undertakeProcessing of Personal Data in accordance with the Standards and will complywith security obligations equivalent to those imposed on the Members asControllers by Article 17 of the EU Privacy Directive 95/46, as implemented bynational legislation.3.6.5.2 Data Subject Notice and ConsentMembers in the EEA or Switzerland must ensure that Data Subjects areproperly informed and, if necessary, have given proper consent in accordancewith applicable laws and regulations that Personal Data relating to them maybe used, disclosed or otherwise processed by the applicable Member and theCorporation as set forth for the purposes provided for in Rule 3.6.2.In accordance with applicable laws and regulations, Members in the EEA orSwitzerland must ensure that Data Subjects are properly informed, at aminimum:1. that Data Subjects have the right to (a) request access to and receiveinformation about the Personal Data maintained by the applicableMembers, or the Corporation, (b) update and correct inaccuracies in thePersonal Data, and (c) have the Personal Data blocked or deleted asappropriate.2. that Data Subjects may withdraw any consent they previously provided tothe applicable Member or the Corporation or object at any time onlegitimate grounds to the Processing of Personal Data;Europe Region Rules3.9 Transaction Requirements12-14©1969–2010 MasterCard29 October 2010 • MasterCard Rules3. about the choices and means that Data Subjects have for limiting theProcessing of Personal Data by the Corporation;4. that Personal Data may be processed outside the EEA or Switzerland; and5. about the categories of recipients of Personal Data.3.6.5.3 Data Subject Access to Personal DataIn accordance with applicable laws and regulations, Members in the EEA orSwitzerland must develop and implement appropriate procedures for handlingrequests by Data Subjects for access to, correction and/or deletion of PersonalData maintained by the applicable Member or Corporation. The Corporationwill cooperate with Members in responding to such requests and willprovide access to Personal Data maintained by the Corporation to assistMembers in complying with requests for access to such Personal Data.If an access request is made directly to the Corporation, Members mustcooperate with the Corporation in promptly responding to the request.3.6.5.4 Integrity of Personal DataEach Member in the EEA or Switzerland must take reasonable steps to ensurethat Personal Data the Member provides to the Corporation is reliable for itsintended use and is accurate, complete and current.3.9 Transaction Requirements3.9.1 Chip Transactions and Hybrid TerminalsRule 3.9.1 of Chapter 3, “Member Obligations” is modified to include thefollowing with respect to chip Transactions effected wholly within the Region.For purposes of these Rules, “EMV-compliant” means in compliance with theEMV standards then in effect.1. Chip Liability Shift. The liability for intraregional counterfeit fraudulentTransactions in which one Regional Member (either the Issuer or theAcquirer) is not yet EMV-compliant is borne by the non–EMV-compliantRegional Member.2. Chip/PIN Liability Shift. The liability for intraregional lost, stolen, and neverreceived fraudulent Transactions in which one Regional Member (either theIssuer or the Acquirer) is not yet able to support chip/PIN Transactions isborne by the non-chip/PIN-compliant Regional Member.Europe Region Rules3.9 Transaction Requirements©1969–2010 MasterCardMasterCard Rules • 29 October 2010 12-153. PIN Entry Device Mandate. All new, replaced, or upgraded chip terminalsmust have a PIN pad. These terminals must at a minimum support offlinePIN (encrypted and clear text) for processing chip Transactions. New,replaced, or upgraded hybrid terminals will not pass the Acquirer TerminalIntegration Process unless they are equipped with a PIN pad.The PIN pad mandate does not apply to CAT Level 2 and 3 hybridterminals.4. Technical Fallback. At cardholder-activated terminals (CATs) Level 1 and 2,if both the Card and the CAT support chip technology, the Transactionmay only be completed using the chip. Technical fallback is not permittedat such terminals. Refer to section 2.8.1.3 of the Chargeback Guide formore information about technical fallback.3.9.2 CVC 2 Processing for Card-Not-Present TransactionsThe following additional rules apply in the Europe Region.The Issuer must not authorize card-not-present (CNP) Transactions (that is,mail order/telephone order [MO/TO] and electronic commerce [e-commerce]Transactions) if the CVC 2 transmitted by the Acquirer does not match the CVC2 on file with the Issuer corresponding to the Card number in question (that is,DE 048, subelement 87 of the Authorization Request Response/0110 message =“N”).The Acquirer must ensure that a CNP Merchant that has exceeded 100 basispoints in fraudulent CNP Transactions for two consecutive calendar months:1. For all MO/TO Transactions, captures and transmits the CVC 2 value to theIssuer for validation; and2. For all e-commerce Transactions, captures and transmits the CVC 2 value tothe Issuer for validation or becomes MasterCard SecureCode™-enabled.Acquirers must ensure that Merchants comply with this requirement within 120days following the second trigger month.Refer to section 3.7 of the Security Rules and Procedures manual for additionalCVC 2 requirements.Europe Region Rules3.9 Transaction Requirements12-16©1969–2010 MasterCard29 October 2010 • MasterCard Rules3.9.5 Issuer Performance StandardsThe following are additional Standards relating to issuer performance.Issuers that fail to meet performance standards may be subject to theassessments set forth in Rule 3.9.5.3 below and will be mandated to implementthe Stand-In Processing Service. Chip Issuers mandated to implement theStand-In Processing Service will also be required to register for M/ChipCryptogram Validation in Stand-In.3.9.5.1 Issuer Failure Rate (Substandard Performance)An Issuer failure rate that exceeds one percent (1%) for Transactions for twomonths in any six-month period is substandard performance. The Issuerfailure rate will not apply to an Issuer or its processor until:a. After the fourth calendar month of operation; orb. Upon processing five thousand (5,000) Transactions in a calendar month;whichever occurs first.3.9.5.2 Calculation of the Issuer Failure RateThe Issuer failure rate is calculated according to the formula below:The sum of the following ISO 8583 response codes:a. 31 issuer signed offb. 82 time out at Issuer EMc. 96 system malfunctiondivided by the total Transactions processed through the Issuer connection tothe Interchange System.Europe Region Rules3.9 Transaction Requirements©1969–2010 MasterCardMasterCard Rules • 29 October 2010 12-173.9.5.3 Assessments for Substandard PerformanceAn Issuer that fails to meet the Corporation’s performance standards may besubject to the following assessments.Occurrence AssessmentFirst occurrence USD 15,000Second occurrence within the twelve (12)month period following the first occurrenceUSD 15,000Third and any subsequent occurrence withinthe twelve (12) month period following thesecond occurrenceUSD 20,000After completion of a full calendar year without any violations, a subsequentviolation is counted as a first violation.3.9.7 Euro MigrationThe following additional Rules apply in the Europe Region.Transactions submitted into interchange that take place in countries thatconvert to the euro must be submitted in the euro. To allow a grace periodfor exceptional cases, the Interchange System will not reject Transactionssubmitted in currencies that have been replaced by the euro within six monthsafter the transition period. Within this six-month period, Issuers may not rejector charge back Transactions submitted in currencies that the euro has replacedexclusively on grounds that such Transactions have not been submitted ineuro.Provided that the national currency of a country that converts to the Euro isstill valid and accepted by the Interchange System, the greater of the euro floorlimit or the floor limit in the national currency applies to intracountryTransactions, regardless of the Transaction currency.Europe Region Rules4.1 Right to Use the Marks12-18©1969–2010 MasterCard29 October 2010 • MasterCard Rules4.1 Right to Use the Marks4.1.2 Protection and Registration of the MarksRule 4.1.2 of Chapter 4, “Trademarks and Service Marks,” is modified toinclude the following additional Standard.MasterCard Europe sprl is the exclusive owner of the Eurocard andeurocheque marks. Members must not, either by act or omission, do anythinginconsistent with the exclusive ownership of the Eurocard or eurochequemarks, or do anything that may harm the Eurocard or eurocheque marks.5.1 The Merchant Agreement5.1.2 Required TermsRule 5.1.2 of Chapter 5, “Merchants and Sales Transactions,” is modified toinclude the following additional Rule that applies in the EEA:Each Merchant Agreement with a Merchant located in the EEA must contain aterm requiring the Merchant to respond to Cardholder disputes and handlechargebacks in accordance with the Chargeback Guide.5.8 Card Acceptance Requirements5.8.2 Merchant AcceptanceThe following additional Rule applies in the Europe Region.Merchants that accept Cards must accept all types of Cards (for example,consumer Cards, MasterCard Corporate Card® Cards, World MasterCard™Cards, Debit MasterCard Cards, etc.).Europe Region Rules5.8 Card Acceptance Requirements©1969–2010 MasterCardMasterCard Rules • 29 October 2010 12-195.8.6 Purchase with Cash Back TransactionsThe following additional Rules apply in the Europe Region.Merchants in the Europe Region may at their option support purchase withcash back Transactions on all types of Cards other than Debit MasterCardCards in accordance with the Rules in this section.For the Rules applicable to Debit MasterCard purchase with cash backTransactions, refer to section 2.1.12 of the Chargeback Guide and Rule 5.8.6 ofChapter 12a, “Europe Region Debit-related Rules.”A purchase with cash back Transaction is an optional service that a Merchantmay offer, with the prior approval of its Acquirer, in a Card-present, face-tofaceenvironment only. A purchase with cash back Transaction is not a cashdisbursement. Refer to chapter 8 of this manual for Standards regarding cashdisbursements.The following Acquirer and Merchant requirements apply to purchase withcash back Transactions:1. Cash may be provided only when combined with a purchase Transaction.The purchase, cash back, and total Transaction components of thepurchase with cash back Transaction must be in the same currency.2. Purchase with cash back is available only for chip/PIN and chip/signatureTransactions, except in the Czech Republic, Poland and Slovakia, wherepurchase with cash back is available on magnetic stripe Transactions until31 December 2010. As of 1 January 2011, purchase with cash back onmagnetic stripe Transactions must be discontinued in these three countries.3. The acquirer must obtain positive online authorization of the fullTransaction amount; support for authorization of the purchase amount onlyis optional.4. An offer of purchase with cash back that is promoted at the point ofinteraction (POI) must be available to all Cardholders and the Merchantmay prompt the Cardholder to use this service.If a Merchant decides to provide purchase with cash back only uponpresentation of particular Cards, then the Merchant must not promote theservice at the POI location or prompt the Cardholder to use purchase withcash back.5. Before the Merchant first offers purchase with cash back Transactions toCardholders, the Acquirer and Merchant must establish an educationprogram for retail employee staff, including but not limited to POS terminaloperators.Europe Region Rules5.8 Card Acceptance Requirements12-20©1969–2010 MasterCard29 October 2010 • MasterCard Rules6. The maximum cash back amount of the purchase with cash backTransaction is GBP 100 in the United Kingdom and EUR 100 or the localcurrency equivalent in other Europe Region countries, with the exceptionof Germany, where the maximum is EUR 200.7. Acquirers or Merchants may establish a lower maximum cash back amount,provided that:• Any such maximum amount is applied uniformly; and• Any maximum amount is not lower than the maximum amountestablished for any other payment means on which purchase with cashback is offered at the Merchant location.8. Acquirers or Merchants may establish a minimum cash back amount,provided that:• Any such minimum amount is applied uniformly; and• Any minimum amount is not greater than the minimum amountestablished for any other payment means on which purchase with cashback is offered at the Merchant location.9. The First Presentment/1240 message of each purchase with cash backTransaction must be submitted as follows:• A value of 09 (purchase with cash back) must be present in DE 3(Processing Code), subfield 1 (Cardholder Transaction Type).• The total transaction amount (inclusive of the purchase amount andcash back amount) must be transmitted in DE 4 (Amount, Transaction).• The cash back amount must be transmitted in DE 54 (Amounts,Additional).The following Issuer requirements apply to purchase with cash backTransactions:1. An Issuer that intends to support purchase with cash back Transactionsmust properly personalize the chip on its Cards.2. When purchase with cash back for magnetic stripe Transactions isdiscontinued in Czech Republic, Poland and Slovakia, Issuers should usepartial authorization to approve only the purchase amount of magneticstripe Transactions, if they have implemented partial authorization.3. When using message reason codes 4853, 4855, 4859, and 4860 to submit achargeback of a purchase with cash back Transaction, the Issuer maycharge back only the purchase amount or a portion thereof, using FunctionCode of 453 (Partial Amount) in the First Chargeback/1442 message. AnIssuer must not charge back the cash back amount or any portion thereofunder any of these message reason codes.Europe Region Rules5.11 Prohibited Practices©1969–2010 MasterCardMasterCard Rules • 29 October 2010 12-215.11 Prohibited Practices5.11.2 Charges to CardholdersRule 5.11.2 of Chapter 5, “Merchants and Sales Transactions,” does not apply inthe EEA.If a Merchant applies a surcharge for payment by Card, the amount or methodof calculation of the surcharge must be clearly indicated to the Cardholder atthe POI location and must bear a reasonable relationship to the Merchant’scost of accepting Cards.5.13 Discounts or Other Benefits at the Point ofInteractionThe following additional Rule applies in the Europe Region.A discount or other benefit may be applied at a POI location in the EuropeRegion upon simple presentation of a particular Card for payment. Thepromotion at the POI of a discount or other benefit that may be accessed byany particular Card is prohibited.6.2 Affinity and Co-Brand Card Programs6.2.5 Multiple PartnersRule 6.2.5 of Chapter 6, “Special Issuer Programs,” is modified to allow morethan one Partner’s name or logo or both to appear on the Card face.6.3 Co-Residing ApplicationsRule 6.3 of Chapter 6, “Special Issuer Programs,” is replaced in its entirety withthe following.6.3.1 Definitions“Co-residing application” means a Member or third party proprietaryapplication or function unrelated to the Payment Scheme that co-resides on aCard.Europe Region Rules8.3 Maximum Cash Disbursement Amounts12-22©1969–2010 MasterCard29 October 2010 • MasterCard RulesAny of a Member’s proprietary intracountry payment functions or brands,whether stored value, debit or credit, is a co-residing application if it resideson a chip embedded on a Card. If such a function or brand does not resideon the chip, the Rules for co-residing applications do not apply.6.3.2 Basic RequirementsMembers may not use any Mark as part of the identification of any co-residingapplication without the Corporation’s prior written approval.Co-residing payment applications may not use or be associated with anycompetitive brand (for example, American Express, JCB, Diners Club, Visa).6.3.3 NotificationThe Corporation must be notified of co-residing payment applications with theform provided in the Cirrus Worldwide Operating Rules Class A Members mayprovide notification of co-residing applications on behalf of their SponsoredAffiliate Members. If a co-residing payment application is discontinued, theCorporation must be notified without delay.8.3 Maximum Cash Disbursement AmountsRule 8.3 of Chapter 8, “Cash Disbursements,” is modified so that the maximumcash disbursement transaction amounts of USD 5,000 and USD 1,000 thereinstated are replaced in the Europe Region by EUR 5,000 and EUR 1,000,respectively.©1969–2010 MasterCardMasterCard Rules • 29 October 2010 12a-i12a Europe Region Debit-related RulesThis chapter contains debit-related Rules that apply only to the Europe Region.Organization of this Chapter ………………………………………………………………… 12a-1Definitions …………………………………………………………………………………………. 12a-12.7 Liability for Assigned ICAs and BINs ……………………………………………….. 12a-24.2 General Rules for Use of the Marks ………………………………………………… 12a-24.2.6 Particular Use of a Mark ………………………………………………………… 12a-24.2.6.6 Use on Cards ………………………………………………………………… 12a-25.8 Card Acceptance Requirements ………………………………………………………. 12a-35.8.1 Honor All Cards…………………………………………………………………….. 12a-35.8.2 Merchant Acceptance …………………………………………………………….. 12a-35.8.6 Purchase with Cash Back Transactions ……………………………………. 12a-4Europe Region Debit-related RulesOrganization of this Chapter©1969–2010 MasterCardMasterCard Rules • 29 October 2010 12a-1Organization of this ChapterThe Rules in this Chapter 12a are variances and additions to the “global” Rulesthat apply to:1. Debit MasterCard Cards issued in a Debit MasterCard Country andpresented for payment in the Europe Region;2. Debit MasterCard Transactions that take place in the Europe Region; and3. Merchants and Acquirers of those Transactions.The rules set forth in Intracountry Debit MasterCard Rules for the UnitedKingdom also apply to Transactions effected with a Debit MasterCard Card thattake place wholly within the United Kingdom.Members and Merchants must continue to comply with the global Rules withrespect to Cards issued by Members outside of the Europe Region andpresented for payment at Merchant locations in the Europe Region, unlessotherwise agreed by the Corporation.DefinitionsThe defined terms provided in Chapter 12 apply to Rules in this Chapter 12a.Solely for the purposes of Rules in this Chapter 12a, the following terms havethe meanings set forth below.1. “Debit MasterCard Card” means a Debit Card as defined in the Definitionssection of Chapter 12.Cards offering credit facilities for which the Cardholder has to enter intoa written credit agreement with the Card issuing institution that wouldqualify as consumer credit under the applicable legislation governingconsumer credit are explicitly excluded. Overdraft facilities linked to anAccount are excluded from the above definition of credit facilities.2. “Other Card” shall mean any MasterCard-branded device, program, or cardthat does not qualify as a “Debit MasterCard Card.”3. “Debit MasterCard Country” shall mean a country designated by theCorporation, in its sole discretion, as a participant in the Intracountry DebitMasterCard Program. Only a country so designated is a Debit MasterCardCountry.Europe Region Debit-related Rules2.7 Liability for Assigned ICAs and BINs12a-2©1969–2010 MasterCard29 October 2010 • MasterCard Rules2.7 Liability for Assigned ICAs and BINsRule 2.7 of Chapter 2, “Licensing and Licensed Activities,” is modified toinclude the following:Transaction/BIN Identification. Debit MasterCard Card Issuers must use specificand unique bank identification numbers (BINs) for Debit MasterCard Cards.Acquirers must provide a complete list of the BINs that apply to DebitMasterCard Cards to their Merchants upon any form of reasonable request.4.2 General Rules for Use of the Marks4.2.6 Particular Use of a Mark4.2.6.6 Use on CardsRule 4.2.6.6 of Chapter 4, “Trademarks and Service Marks,” is modified toinclude the following:Clear and Conspicuous Debit Identifier. Debit MasterCard Card Issuers mustdisplay either1. the Debit MasterCard Hologram instead of the MasterCard GlobalHologram on the Card front, in the position required for the MasterCardGlobal Hologram, or2. the “Debit” word Mark on the Card front, if the Debit MasterCardHologram is on the Card back. Debit MasterCard Cards must conform tothe Standards set forth in the Security Rules and Procedures manual andthe Card Design Standards System.Europe Region Debit-related Rules5.8 Card Acceptance Requirements©1969–2010 MasterCardMasterCard Rules • 29 October 2010 12a-35.8 Card Acceptance Requirements5.8.1 Honor All CardsRule 5.8.1 of Chapter 5, “Merchants and Sales Transactions,” is modified asfollows.1. If Debit MasterCard Cards are Accepted. Merchants in a Debit MasterCardCountry that choose to accept Debit MasterCard Cards issued in the EuropeRegion but not Other Cards issued in the Europe Region must honor allvalid Debit MasterCard Cards issued in the Europe Region withoutdiscrimination, when properly presented for payment. The Merchant mustnot discriminate among customers seeking to make purchases with a DebitMasterCard Card issued in the Europe Region.2. If Other Cards are Accepted. Merchants in a Debit MasterCard Country thatchoose to accept Other Cards must honor all valid Debit MasterCard Cardsissued in the Europe Region and all valid Other Cards issued in the EuropeRegion and all valid Cards without discrimination, when properlypresented for payment. The Merchant must not discriminate amongcustomers seeking to make purchases with another Card.5.8.2 Merchant AcceptanceRule 5.8.2 of Chapter 12, “Europe Region Rules,” is modified to permitMerchants in a Debit MasterCard Country to choose to accept only DebitMasterCard Cards issued in the Europe Region or both Debit MasterCard Cardsand Other Cards issued in the Europe Region. Acquirers must inform existingand prospective merchants that they have this right.A merchant may choose to stop accepting Other Cards issued in the EuropeRegion by providing no less than 30 days advance written notice to itsAcquirer.Acquirers must identify to the Corporation any Merchant in a Debit MasterCardCountry that chooses to accept Debit MasterCard Cards but not Other Cardsissued in the Europe Region, and inform the Corporation of the reason for theMerchant’s decision.Merchants may request signage for the purpose of indicating their acceptanceof Debit MasterCard Cards at http://www.mastercardweacceptdebit.com.Europe Region Debit-related Rules5.8 Card Acceptance Requirements12a-4©1969–2010 MasterCard29 October 2010 • MasterCard Rules5.8.6 Purchase with Cash Back TransactionsA Merchant must offer purchase with cash back Transactions on all EuropeissuedDebit MasterCard Cards if the Merchant offers this transaction type onany other debit brand.©1969–2010 MasterCardMasterCard Rules • 29 October 2010 12b-i12b SEPA RulesThis chapter contains Rules that apply only within the Single EuropeanPayments Area (SEPA).Organization of this Chapter ………………………………………………………………… 12b-1Definitions …………………………………………………………………………………………. 12b-12.1 Purpose of License; Eligibility …………………………………………………………. 12b-12.1.1 Single European Payments Area License …………………………………. 12b-13.2 Conduct of Activity ………………………………………………………………………… 12b-23.2.6 Nondiscrimination …………………………………………………………………. 12b-23.9 Transaction Requirements ………………………………………………………………. 12b-33.9.1 Chip Transactions and Hybrid Terminals…………………………………. 12b-34.2 General Rules for Use of the Marks ………………………………………………… 12b-34.2.13 Use of Other Acceptance Marks on Cards ……………………………… 12b-3SEPA RulesOrganization of this Chapter©1969–2010 MasterCardMasterCard Rules • 29 October 2010 12b-1Organization of this ChapterThe Rules in this Chapter 12b are variances and additions to the “global” Rulesthat apply within the Single European Payments Area (SEPA).DefinitionsThe defined terms provided in Chapter 12 apply to Rules in this Chapter 12b.Solely for the purposes of Rules in this Chapter 12b, the following term has themeaning set forth below.“SEPA Cards Framework (SCF)” means the SEPA Cards Framework aspublished by the European Payments Council, as it may be amended fromtime to time.2.1 Purpose of License; Eligibility2.1.1 Single European Payments Area LicenseThe following additional Rules apply within SEPA:1. Any entity that is eligible to become a Member in one of the SEPAcountries may request a SEPA License.2. The Standards applicable to other Licenses also apply to SEPA Licenses,unless otherwise provided.3. The SEPA License may be granted to a Class A Member or an AffiliateMember.4. A Class A Member holding a SEPA License may Sponsor Affiliate Membersin one or more SEPA countries. The Affiliate Member(s) may receive eithera SEPA License or a License.5. If a SEPA License is held by a Member that will undertake Activities in oneor more SEPA countries via separate legal entities, the separate legalentities must also sign Licenses.6. The SEPA License may cover all of the countries in SEPA. If the SEPALicense will cover both Switzerland and an EEA country, any Member legalentity or SEPA Licensee that will be active both in Switzerland and in anEEA country must be regulated both in Switzerland and in an EEA country.The holder of a SEPA License must meet all local legal requirements ineach country in which it intends to undertake Activities.SEPA Rules3.2 Conduct of Activity12b-2©1969–2010 MasterCard29 October 2010 • MasterCard Rules7. Each Class A Member is granted separate BINs/ICAs for each SEPA countryin which it is active, as appropriate. A Member must use and ensure eachof its Sponsored Affiliate Members use a BIN/ICA only for Activitiesconducted in the country with which such BIN/ICA is associated. AMember, upon receiving a SEPA License, must not undertake Activities in aSEPA country before it has been assigned the necessary BINs/ICAs for thatcountry.8. With regard to Intracountry Transactions, the holder of a SEPA Licensemust comply with the applicable intracountry rules and fees.3.2 Conduct of Activity3.2.6 NondiscriminationRule 3.2.6 of Chapter 3, “Member Obligations,” is modified to include thefollowing:A Member must not, directly or indirectly, prevent or discriminate against theuse of MasterCard as a brand for Intracountry Transactions or Intra-SEPATransactions.By way of example but not limitation:1. A single certification must be valid for both intracountry and intra-SEPA useof the MasterCard payment application at the terminal.2. The prevalence of any particular chip-based payment application atterminal or Acquirer system level must not be mandated or implemented.3. If the MasterCard payment application is supported by both the Card andthe terminal, its use must not be blocked or impaired by technical or othermeans.4. If the MasterCard payment application is supported by both the Card andthe terminal, the Cardholder must be given the opportunity to completethe Transaction with the MasterCard payment application, in an EMVenvironment and in all other cases where the terminal is technicallycapable of providing that choice to the Cardholder. In an EMVenvironment, if the Cardholder is not able to choose a paymentapplication, the priority order defined by the Issuer in the chip must berespected.5. Neither the Cardholder’s chosen payment application nor the Issuer’spriority order may be disregarded or overridden by technical or othermeans.SEPA Rules3.9 Transaction Requirements©1969–2010 MasterCardMasterCard Rules • 29 October 2010 12b-33.9 Transaction RequirementsRule 3.9, part 5 of Chapter 3, “Member Obligations,” which applies to CrossborderTransactions, does not apply to Intra-SEPA Transactions.3.9.1 Chip Transactions and Hybrid TerminalsThe following additional Rules apply within SEPA:1. Effective 1 October 2010, an Issuer of Cards that do not support bothmagnetic stripe and EMV chip technology must have an EMV migrationproject registered with MasterCard Customer Implementation Services.2. Effective 1 October 2010, an Acquirer with any terminals deployed that donot support both magnetic stripe and EMV chip technology must have anEMV migration project registered with MasterCard CustomerImplementation Services. (Note: This requirement does not apply withrespect to terminals at Merchants located in the Netherlands until 1October 2012.)3. Effective 1 January 2011, Cards and terminals must support both magneticstripe and EMV chip technology. As an exception to the preceding rule,nonreloadable prepaid cards are not required to support EMV chiptechnology. (Note: Terminals at Merchants located in the Netherlands arenot required to support EMV chip technology until 2013.)4. Effective 1 January 2011, hybrid terminals must support the use of PIN asthe CVM for intra-SEPA chip Transactions.4.2 General Rules for Use of the Marks4.2.13 Use of Other Acceptance Marks on CardsRule 4.2.13 of Chapter 4, “Trademarks and Service Marks,” is modified toinclude the following:1. The Marks may co-reside on Cards with other payment scheme marksupon written agreement with the Corporation. If Cards bear multiplepayment scheme marks in addition to the Marks, only one of the additionalpayment scheme marks may be placed on the Card front.2. Effective 1 January 2011, only the marks of payment schemes that are SCFcompliantmay co-reside on Cards with the Marks.©1969–2010 MasterCardMasterCard Rules • 24 November 2010 13-i13 Latin America and the Caribbean Region RulesThis chapter contains Rules that apply only in the Latin America and theCaribbean Region.Organization of this Chapter ………………………………………………………………….. 13-12.6 Obligation to Issue Cards …………………………………………………………………. 13-13.9 Transaction Requirements ………………………………………………………………… 13-13.9.1 Chip Transactions and Hybrid Terminals…………………………………… 13-15.11 Prohibited Practices ……………………………………………………………………….. 13-25.11.3 Minimum/Maximum Transaction Amount Prohibited ……………….. 13-25.13 Discounts or Other Benefits at the Point of Interaction …………………….. 13-36.2 Affinity and Co-Brand Card Programs ……………………………………………….. 13-36.2.5 Multiple Partners …………………………………………………………………….. 13-39.3 Currency Conversion ……………………………………………………………………….. 13-39.5 Establishment of Intracountry Interchange and Service Fees ……………….. 13-4Latin America and the Caribbean Region RulesOrganization of this Chapter©1969–2010 MasterCardMasterCard Rules • 24 November 2010 13-1Organization of this ChapterThe Rules in this Chapter 13 are variances and additions to the “global” Rulesthat apply in the Latin America and the Caribbean Region.Refer to Appendix A for the Latin America and the Caribbean Regiongeographic listing.2.6 Obligation to Issue CardsRule 2.6 of Chapter 2, “Licensing and Licensed Activities,” is modified toinclude the following.A Member that is Licensed to acquire Transactions in the United States thatextends its Area of Use to acquire Transactions in Puerto Rico is not requiredto issue Cards in Puerto Rico if its acquiring Activity in Puerto Rico is limited toonly the Transactions of Merchants located in Puerto Rico that are also locatedand have headquarters in the United States, and with whom the Member hasan existing acquiring relationship in the United States.3.9 Transaction Requirements3.9.1 Chip Transactions and Hybrid TerminalsRule 3.9.1 of Chapter 3, “Member Obligations,” is modified to include thefollowing.For purposes of these Rules, “EMV chip-capable” means the ability to become“compliant”; and “EMV chip-compliant” means operating any chip deviceincluding cards, ATMs, point-of-interaction (POI) terminals, electronic cashregisters (ECRs), PIN pads, and terminals that are in accordance fully with theStandards relative to EMV standards.1. New Terminals. All new ATMs and POI terminals must be EMV-compliant.2. Critical Fraud Percentage. The Acquirer of a Merchant located in the LatinAmerica and Caribbean Region with a ratio of fraud and counterfeitvolume to Card sales volume that equals or exceeds the Standards mustreplace any magnetic-stripe-only POI or ECR terminal at such Merchantwith an EMV-capable terminal, either POI or ECR.3. Intraregional Chip Liability Shift. The liability for Latin America andCaribbean intraregional counterfeit fraudulent Transactions in which oneMember (either the Issuer or the Acquirer) is not yet EMV chip-compliant isborne by the non-EMV chip-compliant Member.Latin America and the Caribbean Region Rules5.11 Prohibited Practices13-2©1969–2010 MasterCard24 November 2010 • MasterCard Rules4. Incentive Interchange Rate. An incentive interchange rate applies tointraregional international chip Transactions to:a. Compensate the Issuers of Cards with an increased intraregionalinterchange of ten basis points when the Card is used at a non-EMVchip-compliant terminal.b. Compensate the Acquirers using EMV-compliant terminals with areduced intraregional interchange of ten basis points when a non-EMVchip-compliant Card is used at that terminal.5. Domestic Chip Liability Shifts. The liability for domestic counterfeitfraudulent Transactions in which one Member (either the Issuer or theAcquirer) is not yet EMV chip-compliant is borne by the non-EMV chipcompliantMember in the following countries: Brazil, Colombia, Venezuela.5.11 Prohibited Practices5.11.3 Minimum/Maximum Transaction Amount ProhibitedRule 5.11.3 of Chapter 5, “Merchants and Sales Transactions” as it applies inPuerto Rico and the U.S. Virgin Islands is modified to include the following:A Merchant may set a minimum Transaction amount to accept a Card thatprovides access to a credit account, under the following conditions:1. the minimum Transaction amount does not differentiate between Issuers;and2. the minimum Transaction amount does not differentiate betweenMasterCard and another acceptance brand; and3. the minimum Transaction amount does not exceed USD 10 (or any higheramount established by the Federal Reserve by regulation).A Merchant may set a maximum Transaction amount to accept a Card thatprovides access to a credit account, under the following conditions:1. the Merchant:a. is a department, agency or instrumentality of the U.S. Government; orb. is a corporation owned or controlled by the U.S. Government; orc. is a Merchant whose primary business is reflected by one of thefollowing MCCs:i. MCC 8220—Colleges, Universities, Professional Schools, JuniorColleges; orii. MCC 8244—Schools, Business and Secretarial; or*chg*Latin America and the Caribbean Region Rules5.13 Discounts or Other Benefits at the Point of Interaction©1969–2010 MasterCardMasterCard Rules • 24 November 2010 13-3iii. MCC 8249—Schools, Trade and Vocational; and2. The maximum Transaction amount does not differentiate between Issuers;and3. The maximum Transaction amount does not differentiate betweenMasterCard and another acceptance brand.5.13 Discounts or Other Benefits at the Point ofInteractionA Card may access a discount or other benefit at a point of interaction (POI)located in the Latin America and the Caribbean Region, and the Merchant maypromote such discount or other benefit at the POI, provided such promotiondoes not disparage other Card Programs.6.2 Affinity and Co-Brand Card Programs6.2.5 Multiple PartnersRule 6.2.5 of Chapter 6, “Special Issuer Programs,” is modified such that forAffinity Card Programs and Co-brand Card Programs issued by Members in theLAC Region, more than one Partner’s name or logo or both may appear on theface of the Card subject to the following conditions:1. The Card design shall comply in all respects with the Card designguidelines,2. In no way may any Partner name and/or logo, or combination, obscure inany way the fact that the card is a Card, and3. The decision as to whether any given Card design conforms to theseconditions is reserved to the Corporation’s staff.9.3 Currency ConversionRule 9.3 of Chapter 9, “Settlement,” is modified to include the following.Within the country in which the Card was issued, if that country is within theLAC Region, and if the Transaction currency is the same as the currency of theIssuer and is not U.S. dollars, the Acquirer must accept payment for theTransaction in the local currency, unless the Acquirer and Issuer have agreedotherwise, or unless local law requires otherwise.*chg*Latin America and the Caribbean Region Rules9.5 Establishment of Intracountry Interchange and Service Fees13-4©1969–2010 MasterCard24 November 2010 • MasterCard RulesNoncompliance by any Member with this requirement will result in theimposition of a USD 50 fine for each USD 1,000 of affected settlement volume,payable monthly for the volume in the prior month.9.5 Establishment of Intracountry Interchange and ServiceFeesRule 9.5 of Chapter 9, “Settlement,” is modified to include the following.Integrated Service for Intracurrency Settlement (ISIS) certification is a standardfeature of the certification process for Card Programs in which an LAC RegionMember participates. All Class A Members in the LAC Region and MSPsproviding Program Services to Class A Members in the LAC Region must settleTransactions through ISIS at the applicable intracountry interchange rate andconditions with each LAC Region Member that chooses to use ISIS as itssettlement platform of choice for intracountry Transactions.©1969–2010 MasterCardMasterCard Rules • 29 October 2010 14-i14 South Asia/Middle East/Africa Region RulesThis chapter contains Rules that apply only to the South Asia/Middle East/AfricaRegion.Organization of this Chapter ………………………………………………………………….. 14-13.6 Provision and Use of Information …………………………………………………….. 14-13.6.1 Obligation of Member to Provide Information …………………………… 14-13.6.1.1 Information to Cardholders ……………………………………………… 14-13.9 Transaction Requirements ………………………………………………………………… 14-23.9.1 Chip Transactions and Hybrid Terminals…………………………………… 14-23.11 Limitation of Liability of Cardholders for Unauthorized Use ………………. 14-35.13 Discounts or Other Benefits at the Point of Interaction …………………….. 14-4South Asia/Middle East/Africa Region RulesOrganization of this Chapter©1969–2010 MasterCardMasterCard Rules • 29 October 2010 14-1Organization of this ChapterThe Rules in this Chapter 14 are variances and additions to the “global” Rulesthat apply in the South Asia/Middle East/Africa (SAMEA) Region.Refer to Appendix A for the South Asia/Middle East/Africa Region geographiclisting.3.6 Provision and Use of Information3.6.1 Obligation of Member to Provide Information3.6.1.1 Information to CardholdersThe Issuer must provide information to its Cardholders as set forth below.1. Card Solicitations. Each Issuer of Cards must disclose, clearly andconspicuously, in all Solicitations any amounts relating to the MasterCardIssuer Cross-border Assessment and/or the MasterCard CurrencyConversion Assessment that the Issuer charges, or will charge, to theCardholder.2. Cardholder Communications. Each Issuer of Cards must disclose, clearlyand conspicuously, in all new and existing Cardholder Communications,including Cardholder agreements and account agreements, any amountsrelating to the MasterCard Issuer Cross-border Assessment and/or theMasterCard Currency Conversion Assessment that the Issuer charges, orwill charge, to the Cardholder.3. Periodic Billing Statement. Each Issuer of Cards must provide adequatedisclosure on each applicable periodic billing statement, such that theCardholder can readily determine from the billing statement any amountsthat the Issuer charges to the Cardholder relating to the MasterCard IssuerCross-border Assessment and/or the MasterCard Currency ConversionAssessment during that billing cycle, either in gross or on a per Transactionbasis.South Asia/Middle East/Africa Region Rules3.9 Transaction Requirements14-2©1969–2010 MasterCard29 October 2010 • MasterCard Rules4. Currency Conversion Procedure. The Corporation further recommends andencourages Issuers to inform their Cardholders that part of theCorporation’s currency conversion procedure includes use of either agovernment-mandated exchange rate or a wholesale exchange rate,selected by the Corporation, and that the government-mandated exchangerate or wholesale exchange rate that the Corporation uses for a particularTransaction is the rate the Corporation selects for the applicable currencyon date that the Transaction is processed (the Central Site Business Date),which may differ from the rate selected on the date the Transactionoccurred or on the date the Transaction is posted to the Cardholder’saccount.For information about the MasterCard Currency Conversion Assessment, referto the GCMS Reference Manual. For information about the MasterCard CrossborderAssessment, refer to the MasterCard Consolidated Billing System—SAMEA Region manual.3.9 Transaction Requirements3.9.1 Chip Transactions and Hybrid TerminalsRule 3.9.1 of Chapter 3, “Member Obligations,” is modified to include thefollowing.For purposes of these Rules, a counterfeit Transaction is a type of fraudulentTransaction.1. New Terminals. All new or retrofitted ATMs and POI terminals deployedby Regional Members must be EMV-capable.2. Incentive Interchange Rate. An incentive interchange rate is applied tointraregional Transactions to:a. Compensate Issuers of EMV-compliant Cards with an increasedintraregional interchange of ten basis points when the Card is used at anon–EMV-compliant terminalb. Compensate Acquirers using EMV-compliant terminals with reducedintraregional interchange of 10 basis points when a non–EMVcompliantCard is used at that terminal.3. Chip Liability Shift for SAMEA. The liability for SAMEA intraregionalcounterfeit Card Transactions in which one member (either the Issuer orthe Acquirer) is not yet EMV-compliant will be borne by the non–EMVcompliantmember.South Asia/Middle East/Africa Region Rules3.11 Limitation of Liability of Cardholders for Unauthorized Use©1969–2010 MasterCardMasterCard Rules • 29 October 2010 14-3Effective 15 October 2010, an interregional chip liability shift will take effectbetween the Asia/Pacific and South Asia/Middle East/Africa Regions. Allcountries within each of these regions will participate.3.11 Limitation of Liability of Cardholders forUnauthorized UseThe following applies with respect to SAMEA Region Cardholders.1. Limitation on amount. Subject to the laws of the country within which aCard is issued, the liability of a Cardholder for unauthorized use of a Card(regardless of the type of account to which Transactions initiated with suchCard are posted)a. shall not exceed USD 0 if the conditions set forth in paragraph 2,below, have been met or,b. shall be in accordance with the corresponding Cardholder agreement ifthe conditions set forth in paragraph 2 have not been met.2. Conditions to USD 0 liability. The liability limitations set forth in clause (a)of paragraph 1, above, shall apply only ifa. the Cardholder has exercised vigilant care in safeguarding such Cardfrom risk of loss, theft, or unauthorized use;b. the Cardholder immediately and without delay notifies the Issuer upondiscovery of the loss, theft, or unauthorized use;c. the Cardholder has not reported two or more incidents of unauthorizeduse to the Issuer in the immediately preceding 12-month period;d. the account to which Transactions initiated with such Card are postedis in good standing; ande. the Cardholder has complied with the terms and conditions of thecorresponding Cardholder agreement.3. Effect of other applicable law or agreement. If country or local law or anagreement between a Cardholder and the Issuer of a Card (regardless ofthe type of account to which Transactions initiated with such Card areposted) imposes lesser liability than that provided in this Rule, the lesserliability shall govern.South Asia/Middle East/Africa Region Rules5.13 Discounts or Other Benefits at the Point of Interaction14-4©1969–2010 MasterCard29 October 2010 • MasterCard Rules4. Unauthorized use. For purposes of this Rule, “unauthorized use” meansthe use of a Card (regardless of the type of account to which Transactionsinitiated with such Card are posted) by a person other than the Cardholderwho does not have actual, implied, or apparent authority for such use, andfrom which the Cardholder receives no benefit.5. Nonapplicability. This Rule shall not apply to Cards issueda. to an entity other than a natural person;b. primarily for business, commercial, or agricultural purposes; orc. if a PIN or MasterCard SecureCode is used as the Cardholderverification method for unauthorized Transaction(s).5.13 Discounts or Other Benefits at the Point ofInteractionA discount or other benefit may be applied at a POI located in the SAMEARegion upon presentation of a particular Card for payment. Promotion of anysuch discount or other POI benefit is permitted provided such promotion doesnot result in discrimination against other Card Programs. The determination ofwhether any promotion discriminates against other Card Programs is at thesole discretion of the Corporation.©1969–2010 MasterCardMasterCard Rules • 29 October 2010 14a-i14a South Africa RulesThis chapter contains Rules that apply only in South Africa.Organization of this Chapter ………………………………………………………………… 14a-1Definitions …………………………………………………………………………………………. 14a-12.6 Obligation to Issue Cards ……………………………………………………………….. 14a-12.7 Liability for Assigned ICAs and BINs ……………………………………………….. 14a-13.9 Transaction Requirements ………………………………………………………………. 14a-23.9.1 Chip Transactions and Hybrid Terminals…………………………………. 14a-24.2 General Rules for Use of the Marks ………………………………………………… 14a-24.2.6 Particular Use of a Mark ………………………………………………………… 14a-24.2.6.6 Use on Cards ………………………………………………………………… 14a-25.1 The Merchant Agreement……………………………………………………………….. 14a-35.1.2 Required Terms …………………………………………………………………….. 14a-35.8 Card Acceptance Requirements ………………………………………………………. 14a-35.8.1 Honor All Cards…………………………………………………………………….. 14a-35.8.2 Merchant Acceptance …………………………………………………………….. 14a-3South Africa RulesOrganization of this Chapter©1969–2010 MasterCardMasterCard Rules • 29 October 2010 14a-1Organization of this ChapterThe Rules in this Chapter 14a are variances and additions to the “global” Rulesthat apply to Cards issued in South Africa by South Africa Members andpresented for payment at Merchant locations in South Africa.Members and Merchants in South Africa must continue to comply with theglobal Rules for Cards issued by Members outside of South Africa andpresented for payment at Merchant locations in South Africa.DefinitionsSolely for the purposes of this Chapter 14a, the following terms have themeanings set forth below.1. “Debit” or “Debit MasterCard Card” or “Debit Card” shall mean any AccessDevice, Program, or Card issued in South Africa, by a Member licensed inSouth Africa, that when presented for payment in South Africa, accesses,debits, holds, or settles funds from a consumer’s deposit, current, saving,asset or other type of money account. “Debit” or “Debit MasterCard Card”shall include consumer signature and/or PIN debit Programs, stored valuePrograms, prepaid Cards, payroll Cards and electronic benefit transferCards. Zero floor limits apply and all Transactions are authorized online.2. “Other Card” shall mean any Access Device, Program, or Card that is notdefined as “debit” or “Debit MasterCard Card”.2.6 Obligation to Issue CardsRule 2.6 of Chapter 2, “Licensing and Licensed Activities,” does not apply inSouth Africa.2.7 Liability for Assigned ICAs and BINsRule 2.7 of Chapter 2, “Licensing and Licensed Activities,” is modified toinclude the following:Transaction/BIN Identification. Issuers must use specific and unique bankidentification numbers (BINs) for Debit MasterCard Cards. Acquirers mustprovide a complete list of the BINs that apply to Debit MasterCard Cards toMerchants upon any form of reasonable request.South Africa Rules3.9 Transaction Requirements14a-2©1969–2010 MasterCard29 October 2010 • MasterCard Rules3.9 Transaction Requirements3.9.1 Chip Transactions and Hybrid TerminalsRule 3.9.1 of Chapter 3, “Member Obligations,” is modified to include thefollowing:Chip Liability Shift for South Africa. The liability for South Africa intracountrycounterfeit Card Transactions in which one member (either the Issuer or theAcquirer) is not yet EMV-compliant will be borne by the non–EMV-compliantmember.4.2 General Rules for Use of the Marks4.2.6 Particular Use of a Mark4.2.6.6 Use on CardsRule 4.2.6.6 of Chapter 4, “Trademarks and Service Marks,” is modified toinclude the following:Clear and Conspicuous Debit Identifier. Issuers must display1. the Debit MasterCard Hologram instead of the MasterCard GlobalHologram on the front of all Debit MasterCard Cards issued in South Africain the position required for the MasterCard Global Hologram, or2. the “Debit” word mark on the Card front if the Debit MasterCard Hologramis on the Card back. Debit MasterCard Cards must conform to theStandards set forth in the Security Rules and Procedures manual and theCard Design Standards System.South Africa Rules5.1 The Merchant Agreement©1969–2010 MasterCardMasterCard Rules • 29 October 2010 14a-35.1 The Merchant Agreement5.1.2 Required TermsRule 5.1.2 of Chapter 5, “Merchants and Sales Transactions,” is modified toinclude the following:In addition to the Standards set forth in Chapter 5, Merchant Agreements mustprovide the Merchant with the option, and the applicable Merchant discountrate for each option, to elect to accept Debit MasterCard Cards only, OtherCards only, or both Debit MasterCard Cards and Other Cards. A Merchant maychoose to stop accepting Debit MasterCard Cards or Other Cards by providingno less than 30 days advance written notice to its Acquirer.5.8 Card Acceptance Requirements5.8.1 Honor All CardsRule 5.8.1 of Chapter 5, “Merchants and Sales Transactions,” is modified asfollows.1. Honor All Debit MasterCard Cards. Merchants that choose to accept DebitMasterCard Cards must honor all valid Debit MasterCard Cards withoutdiscrimination when properly presented for payment. The Merchant mustmaintain a policy that does not discriminate among customers seeking tomake purchases with a Debit MasterCard Card.2. Honor All Other MasterCard Cards. Merchants that choose to accept OtherCards must honor all Other Cards without discrimination when properlypresented for payment. The Merchant must maintain a policy that doesnot discriminate among customers seeking to make purchases with anotherCard.5.8.2 Merchant AcceptanceMerchants that accept Cards may choose to accept Debit MasterCard Cardsonly, Other Cards only, or both Debit MasterCard Cards and Other Cards.Acquirers must advise the Corporation when a Merchant chooses not to accepteither Debit MasterCard Cards or Other Cards.Merchants may request signage for the purpose of indicating their acceptanceof Debit MasterCard Cards at http://www.mastercardweacceptdebit.com.©1969–2010 MasterCardMasterCard Rules • 29 October 2010 14b-i14b India RulesThis chapter contains Rules that apply only in India.Organization of this Chapter ………………………………………………………………… 14b-1Definitions …………………………………………………………………………………………. 14b-13.9 Transaction Requirements ………………………………………………………………. 14b-13.9.2 Card-Not-Present Transactions ……………………………………………….. 14b-15.8 Card Acceptance Requirements ………………………………………………………. 14b-25.8.6 Purchase With Cash Back Transactions …………………………………… 14b-2India RulesOrganization of this Chapter©1969–2010 MasterCardMasterCard Rules • 29 October 2010 14b-1Organization of this ChapterThe Rules in this Chapter 14b are variances and additions to the “global” Rulesthat apply to Cards issued in India by India Members and presented forpayment at Merchant locations in India.Members and Merchants in India must continue to comply with the globalRules for Cards issued by Members outside of India and presented for paymentat Merchant locations in India.DefinitionsSolely for the purposes of this Chapter 14b, the following terms have themeanings set forth below.“Debit” or “Debit MasterCard Card” or “Debit Card” shall mean any AccessDevice, Program, or Card issued in India, by a Member licensed in India, thatwhen presented for payment in India, accesses, debits, holds, or settles fundsfrom a consumer’s deposit, current, saving, asset or other type of moneyaccount. “Debit” or “Debit MasterCard Card” shall include consumer signaturedebit Programs, stored value Programs, prepaid Cards, payroll Cards andelectronic benefit transfer Cards.3.9 Transaction Requirements3.9.2 Card-Not-Present TransactionsElectronic commerce Transactions and effective 1 January 2011, IVRTransactions effected at a Merchant located in India with a Card issued in Indiamust be authenticated. An authenticated Transaction occurs when:a. The Merchant is Universal Cardholder Authentication Field (UCAF)-enabled;b. The Issuer provided the UCAF data for that Transaction;c. All other authorization and clearing requirements applicable to theTransaction were satisfied; andd. The Authorization Request Response/0110 message reflected the Issuer’sapproval of the Transaction.*chg*India Rules5.8 Card Acceptance Requirements14b-2©1969–2010 MasterCard29 October 2010 • MasterCard RulesFor purposes of this Rule, an IVR Transaction is a phone order Transactionconducted by means of an interactive voice response (IVR) phone system.Each IVR Transaction must contain a value of 2 (SecureCode phone order) inDE 61 (point-of-service [POS] Data), subfield 7 (POS Transaction Status) of theAuthorization Request/0100 message.Refer to section 3.4 of the Chargeback Guide for chargeback rights applicableto electronic commerce Transactions under the MasterCard SecureCode liabilityshift program.An Issuer may not use message reason codes 4837, 4849 or 4863 to chargeback an IVR Transaction that occurs at a Merchant located in India, if:a. The Merchant is UCAF-enabled;b. The Issuer provided the UCAF for that Transaction;c. All other phone order authorization and clearing requirements weresatisfied, including the presence of a value of 2 (SecureCode phone order)in DE 61 (Point-of-Service [POS] Data), subfield 7 (POS Transaction Status)of the Authorization Request/0100 message;d. The Authorization Request Response/0110 message reflected the Issuer’sapproval of the Transaction.All Issuers and all Acquirers of e-commerce Merchants must participate in theActivation During Shopping (ADS) method of cardholder enrollment inMasterCard SecureCode. Cardholders must complete enrollment on the firstattempt, and the Issuer must not allow a Cardholder to opt-out of theSecureCode enrollment process. Effective 1 January 2011, this requirement alsoapplies to Acquirers of IVR Merchants.Refer to the MasterCard SecureCode Member Enrollment and ImplementationGuide for more information about MasterCard SecureCode and UCAF.5.8 Card Acceptance Requirements5.8.6 Purchase With Cash Back TransactionsRule 5.8.6 of Chapter 5, “Merchants and Sales Transactions,” is modified toinclude the following:The maximum daily cash back amount per Debit MasterCard Card shall be inaccordance with applicable law including circulars published by the ReserveBank of India.*chg**chg**chg**chg*India Rules5.8 Card Acceptance Requirements©1969–2010 MasterCardMasterCard Rules • 29 October 2010 14b-3A Merchant that has received prior approval from its Acquirer may offer:a. A purchase with cash back Transaction to a Cardholder for intracountry,Card-present, face-to-face Transactions conducted in India; andb. A purchase with a cash back Transaction to a Cardholder with noaccompanying purchase for intracountry, Card-present, face-to-faceTransactions conducted in India.*chg*©1969–2010 MasterCardMasterCard Rules • 24 November 2010 15-i15 United States Region RulesThis chapter contains Rules that apply only to in United States Region.Organization of this Chapter ………………………………………………………………….. 15-12.6 Obligation to Issue Cards …………………………………………………………………. 15-12.7 Liability for Assigned ICAs and BINs …………………………………………………. 15-12.7.1 Settlement Liability for Debit Licensees …………………………………….. 15-13.6 Provision and Use of Information …………………………………………………….. 15-23.6.1 Obligation of Member to Provide Information …………………………… 15-23.6.1.1 Information to Cardholders ……………………………………………… 15-23.8 Authorization Service ………………………………………………………………………. 15-33.8.3 Full and Partial Reversals …………………………………………………………. 15-33.8.4 Partial Approvals and Account Balance Responses …………………….. 15-53.9 Transaction Requirements ………………………………………………………………… 15-83.9.3 Refund Transactions ………………………………………………………………… 15-83.9.4 Automated Fuel Dispenser Transactions ……………………………………. 15-83.10 Additional Member Obligations ………………………………………………………. 15-93.10.4 Integrity of Brand and Network ……………………………………………… 15-93.11 Limitation of Liability of Cardholders for Unauthorized Use ………………. 15-95.11 Prohibited Practices ……………………………………………………………………… 15-115.11.3 Minimum/Maximum Transaction Amount Prohibited ……………… 15-115.13 Discounts or Other Benefits at the Point of Interaction …………………… 15-126.2 Affinity and Co-brand Card Programs ……………………………………………… 15-126.2.5 Multiple Partners …………………………………………………………………… 15-128.2 Nondiscrimination …………………………………………………………………………. 15-13United States Region RulesOrganization of this Chapter©1969–2010 MasterCardMasterCard Rules • 24 November 2010 15-1Organization of this ChapterThe Rules in this Chapter 15 are variances and additions to the “global” Rulesthat apply in the United States Region.2.6 Obligation to Issue CardsRule 2.6 of Chapter 2, “Licensing and Licensed Activities,” is modified toinclude the following:1. Any Member that does not issue or have outstanding any cards of acompeting card program within the U.S. Region is not obligated to issueCards to customers in the U.S. Region before it may acquire Transactionsfrom Merchants located in the U.S. Region.2. A Member that is Licensed to acquire Transactions in the United States thatextends its Area of Use to acquire Transactions in Puerto Rico is notrequired to issue Cards in Puerto Rico if its acquiring Activity in PuertoRico is limited to only the Transactions of Merchants located in Puerto Ricothat are also located and have headquarters in the United States, and withwhom the Member has an existing acquiring relationship in the UnitedStates.2.7 Liability for Assigned ICAs and BINs2.7.1 Settlement Liability for Debit LicenseesA debit Licensee is granted a License limited to the issuance of DebitMasterCard Cards. Notwithstanding the foregoing, a principal debit Licensee isnot responsible for the Debit MasterCard Card Program obligations of anyaffiliate debit Licensee that it Sponsors if such an affiliate debit Licenseebecomes unable or unwilling to discharge its settlement obligations.United States Region Rules3.6 Provision and Use of Information15-2©1969–2010 MasterCard24 November 2010 • MasterCard Rules3.6 Provision and Use of Information3.6.1 Obligation of Member to Provide Information3.6.1.1 Information to CardholdersThe Issuer must provide information to its Cardholders as set forth below.1. Card Solicitations. Each Issuer of Cards must disclose, clearly andconspicuously, in all Solicitations any amounts relating to the MasterCardIssuer Cross-border Assessment and/or the MasterCard CurrencyConversion Assessment that the Issuer charges, or will charge, to theCardholder.2. Cardholder Communications. Each Issuer of Cards must disclose, clearlyand conspicuously, in all new and existing Cardholder Communications,including Cardholder agreements and account agreements, any amountsrelating to the MasterCard Issuer Cross-border Assessment and/or theMasterCard Currency Conversion Assessment that the Issuer charges, orwill charge, to the Cardholder.3. Periodic Billing Statement. Each Issuer of Cards must provide adequatedisclosure on each applicable periodic billing statement, such that theCardholder can readily determine from the billing statement any amountsthat the Issuer charges to the Cardholder relating to the MasterCard IssuerCross-border Assessment and/or the MasterCard Currency ConversionAssessment during that billing cycle, either in gross or on a per Transactionbasis.4. Currency Conversion Procedure. The Corporation further recommends andencourages Issuers to inform their Cardholders that part of theCorporation’s currency conversion procedure includes use of either agovernment-mandated exchange rate or a wholesale exchange rate,selected by the Corporation, and that the government-mandated exchangerate or wholesale exchange rate that the Corporation uses for a particularTransaction is the rate the Corporation selects for the applicable currencyon date that the Transaction is processed (the Central Site Business Date),which may differ from the rate selected on the date the Transactionoccurred or on the date the Transaction is posted to the Cardholder’saccount.For information about the MasterCard Currency Conversion Assessment, referto the GCMS Reference Manual. For information about the MasterCard CrossborderAssessment, refer to the MasterCard Consolidated Billing System—United States Region manual.United States Region Rules3.8 Authorization Service©1969–2010 MasterCardMasterCard Rules • 24 November 2010 15-33.8 Authorization Service3.8.3 Full and Partial ReversalsMembers must provide full and partial reversal authorization services as setforth below:1. For all Debit MasterCard Card account ranges, Issuers must support fulland partial approvals.2. Effective 15 April 2011, for all Card account ranges, an Issuer receiving aReversal Request/0400 or Reversal Advice/0420 message must release anyhold placed on the Cardholder’s account for the amount specified within60 minutes of matching the reversal message to a previous authorizationrequest message.3. Effective 15 April 2011, the Acquirer of a Merchant must ensure that forany approved amount that will not be included in a Transactionpresentment, the Merchant initiates, as applicable, a full or partial reversal:a. Within 24 hours of the original authorization request in a card-presentenvironment, andb. Within 72 hours of the original authorization request in a card-notpresentenvironment.This requirement does not apply if the Merchant is properly identified withany one of the following card acceptor business codes (MCCs):− MCCs 3351 through 3441 (Car Rental Agencies)− MCCs 3501 through 3999 (Lodging—Hotels, Motels, Resorts)− MCC 4411 (Cruise Lines)− MCC 7011 (Lodging—Hotels, Motels, Resorts—not elsewhere classified)− MCC 7512 (automobile Rental Agency—not elsewhere classified).4. The Acquirer of a Merchant properly identified under an MCC listed in thetable below and that accepts Debit MasterCard Cards must support full andpartial reversals performed at the POI and whenever, for technical reasons,the Acquirer is unable to communicate the authorization response to theMerchant, for all Debit MasterCard Card account ranges, by the dateindicated:Effective Date MCC Description1 May 2010 4812 Telecommunication Equipment including TelephoneSales4814 Telecommunication Services*chg*United States Region Rules3.8 Authorization Service15-4©1969–2010 MasterCard24 November 2010 • MasterCard RulesEffective Date MCC Description5111 Stationery, Office Supplies5200 Home Supply Warehouse Stores5300 Wholesale Clubs5310 Discount Stores5311 Department Stores5331 Variety Stores5399 Miscellaneous General Merchandise Stores5411 Grocery Stores, Supermarkets5499 Miscellaneous Food Stores—Convenience Stores,Markets, Specialty Stores and Vending Machines5541 Service Stations (with or without Ancillary Services)5542 Fuel Dispenser, Automated5732 Electronic Sales5734 Computer Software Stores5735 Record Shops5812 Eating Places, Restaurants5814 Fast Food Restaurants5912 Drug Stores, Pharmacies5921 Package Stores, Beer, Wine, and Liquor5941 Sporting Goods Stores5942 Book Stores5943 Office, School Supply and Stationery Stores5964 Direct Marketing—Catalog Merchants5965 Direct Marketing—Combination Catalog—RetailMerchants5966 Direct Marketing—Outbound Telemarketing Merchants5967 Direct Marketing—Inbound Telemarketing Merchants5969 Direct Marketing—Other Direct Marketers—notelsewhere classified5999 Miscellaneous and Specialty Retail Stores7829 Motion Picture-Video Tape Production-Distribution7832 Motion Picture Theaters7841 Video Entertainment Rental Stores*chg*United States Region Rules3.8 Authorization Service©1969–2010 MasterCardMasterCard Rules • 24 November 2010 15-5Effective Date MCC Description8011 Doctors—not elsewhere classified8021 Dentists, Orthodontists8041 Chiropractors8042 Optometrists, Ophthalmologists8043 Opticians, Optical Goods, and Eyeglasses8062 Hospitals8099 Health Practitioners, Medical Services—not elsewhereclassified1 November 2010 4111 Transportation—Suburban and Local CommuterPassenger, including Ferries4816 Computer Network/Information Services4899 Cable, Satellite, and Other Pay Television and RadioServices7996 Amusement Parks, Carnivals, Circuses, Fortune Tellers7997 Clubs—Country Membership7999 Recreation Services—not elsewhere classified1 May 2011 8999 Professional Services—not elsewhere classified9399 Government Services—not elsewhere classified Note Acquirers of Merchants in the MCCs listed in this table with an effective date of1 May 2010 or 1 November 2010 must support these requirements in all standaloneterminal software updates performed after 1 May 2010 and for all standaloneterminals that are deployed after 1 May 2010.For the purposes of this section, stand-alone terminals are terminals that arenot integrated into a Merchant’s POS system, such that the Transaction amountmust be manually entered into the terminal.3.8.4 Partial Approvals and Account Balance ResponsesMembers must provide partial approval and account balance responseauthorization services as set forth below:1. For all Debit MasterCard Card account ranges, Issuers must support partialapprovals.2. For all Debit MasterCard Card prepaid account ranges, Issuers mustsupport account balance responses.*chg*United States Region Rules3.8 Authorization Service15-6©1969–2010 MasterCard24 November 2010 • MasterCard Rules3. Effective 1 May 2010, for all Debit MasterCard Card account ranges, theAcquirer of a Merchant properly identified with MCC 5542 (Fuel Dispenser,Automated) and that accepts Debit MasterCard Cards must support partialapprovals.4. Effective as indicated, the Acquirer of a Merchant properly identified underan MCC listed in the table below and that accepts Debit MasterCard Cardsmust:a. For all Debit MasterCard Card account ranges, support partial approvalsfor Card-present Transactions occurring at attended terminals, andb. For all Debit MasterCard Card prepaid account ranges, support accountbalance responses for Card-present Transactions occurring at attendedterminals.Effective Date MCC Description1 May 2010 4812 Telecommunication Equipment including TelephoneSales4814 Telecommunication Services5111 Stationery, Office Supplies5200 Home Supply Warehouse Stores5300 Wholesale Clubs5310 Discount Stores5311 Department Stores5331 Variety Stores5399 Miscellaneous General Merchandise Stores5411 Grocery Stores, Supermarkets5499 Miscellaneous Food Stores—Convenience Stores,Markets, Specialty Stores and Vending Machines5541 Service Stations (with or without Ancillary Services)5542 Fuel Dispenser, Automated5732 Electronic Sales5734 Computer Software Stores5735 Record Shops5812 Eating Places, Restaurants5814 Fast Food Restaurants5912 Drug Stores, Pharmacies5921 Package Stores, Beer, Wine, and Liquor*chg*United States Region Rules3.8 Authorization Service©1969–2010 MasterCardMasterCard Rules • 24 November 2010 15-7Effective Date MCC Description5941 Sporting Goods Stores5942 Book Stores5943 Office, School Supply and Stationery Stores5964 Direct Marketing—Catalog Merchants5965 Direct Marketing—Combination Catalog—RetailMerchants5966 Direct Marketing—Outbound Telemarketing Merchants5967 Direct Marketing—Inbound Telemarketing Merchants5969 Direct Marketing—Other Direct Marketers—notelsewhere classified5999 Miscellaneous and Specialty Retail Stores7829 Motion Picture-Video Tape Production-Distribution7832 Motion Picture Theaters7841 Video Entertainment Rental Stores8011 Doctors—not elsewhere classified8021 Dentists, Orthodontists8041 Chiropractors8042 Optometrists, Ophthalmologists8043 Opticians, Optical Goods, and Eyeglasses8062 Hospitals8099 Health Practitioners, Medical Services—not elsewhereclassified1 November 2010 4111 Transportation—Suburban and Local CommuterPassenger, including Ferries4816 Computer Network/Information Services4899 Cable, Satellite, and Other Pay Television and RadioServices7996 Amusement Parks, Carnivals, Circuses, Fortune Tellers7997 Clubs—Country Membership7999 Recreation Services—not elsewhere classified1 May 2011 8999 Professional Services—not elsewhere classified9399 Government Services—not elsewhere classified*chg*United States Region Rules3.9 Transaction Requirements15-8©1969–2010 MasterCard24 November 2010 • MasterCard Rules Note Acquirers of Merchants in the MCCs listed in this table with an effective date of1 May 2010 or 1 November 2010 must support these requirements in all standaloneterminal software updates performed after 1 May 2010 and for all standaloneterminals that are deployed after 1 May 2010.For the purposes of this section, stand-alone terminals are terminals that arenot integrated into a Merchant’s POS system, such that the Transaction amountmust be manually entered into the terminal.3.9 Transaction Requirements3.9.3 Refund TransactionsA Debit MasterCard Card Issuer must post funds due to a Cardholder as aresult of a refund Transaction to the Cardholder’s account within one businessday of Transaction settlement. The Issuer may place a temporary hold on suchfunds to the extent allowed under applicable law if the Issuer determines thatthe circumstances or account history warrant the delay.3.9.4 Automated Fuel Dispenser TransactionsIf an Issuer approves an authorization request for a Cardholder-activatedautomated fuel dispenser Transaction identified with MCC 5542 and CAT level2 (an “AFD Transaction”) occurring at a Merchant located in the U.S. region,then within 60 minutes of the time that the authorization request message wassent, the Acquirer must send an authorization advice message advising theIssuer of the Transaction amount.If after approving an authorization request for an AFD Transaction the Issuerhas placed a hold on Cardholder funds in excess of USD 1, then within 60minutes of receiving the Acquirer’s authorization advice (0120 or 0420)message, the Issuer must release any hold amount that exceeds theTransaction amount specified.Refer to section 2.7.2.3 of the Chargeback Guide for CAT level 2 requirements.*chg**chg*United States Region Rules3.10 Additional Member Obligations©1969–2010 MasterCardMasterCard Rules • 24 November 2010 15-93.10 Additional Member Obligations3.10.4 Integrity of Brand and NetworkRule 3.10.4 of Chapter 3, “Member Obligations,” is modified to include thefollowing:Pursuant to this Rule, with respect to any potentially illegal Internet gamblingTransaction attempted on or after 1 June 2010, the Issuer of the Card musteither employ a method of systemic Transaction blocking or decline all suchTransaction authorization requests on an individual basis.An Internet gambling Transaction that may be potentially illegal wheninvolving a U.S. region Cardholder is any Transaction that the Acquirer hasidentified in the authorization request message as both:a. a gambling Transaction, by the use of MCC 7995 in DE 18 (MerchantType), andb. an e-commerce Transaction, by the use of a value of 6 (electroniccommerce Transaction) in DE 61 (Point of Service [POS] Data), subfield 10(Cardholder-Activated Terminal Level Indicator).Issuers may approve, on an individual basis, any Internet gambling Transactionauthorization requests identified with MCC 9754 (Gambling—Horse Racing,Dog Racing) that involve a U.S. region Cardholder. In using MCC 9754, theAcquirer asserts that the Transaction involves gambling activity deemed by theAcquirer to be legal in the U.S. region and indemnifies the Corporation inconnection with all such gambling activity. Such indemnity applies regardlessof the Acquirer’s or the Merchant’s compliance with the Corporation’s InternetGambling Policy or the Standards.3.11 Limitation of Liability of Cardholders forUnauthorized UseThe following applies with respect to United States Region Cardholders.1. Limitation on amount. The liability of a Cardholder for unauthorized useof a Card (regardless of the type of account to which Transactions initiatedwith such Card are posted, except as set forth in paragraph 5 below) shallnot exceed:a. USD 0 if the conditions set forth in paragraph 2, below, have been metor,*chg**chg*United States Region Rules3.11 Limitation of Liability of Cardholders for Unauthorized Use15-10©1969–2010 MasterCard24 November 2010 • MasterCard Rulesb. if the conditions set forth in paragraph 2 have not been met, the lesserof USD 50 or the amount of money, property, labor, or servicesobtained by the unauthorized use before notification to the Issuer.2. Conditions to USD 0 liability. The liability limitations set forth in clause(a) of paragraph 1, above, shall apply only ifa. the Cardholder has exercised reasonable care in safeguarding suchCard from risk of loss or theft;b. the Cardholder has not reported two or more incidents of unauthorizeduse to the Issuer in the immediately preceding 12-month period; andc. the account to which Transactions initiated with such Card are postedis in good standing.3. Effect of other applicable law or agreement. If federal, state or local law,or an agreement between a Cardholder and the Issuer of a Card (regardlessof the type of account to which Transactions initiated with such Card areposted) imposes lesser liability than that provided in this Rule, the lesserliability shall govern.4. Unauthorized use. For purposes of this Rule, “unauthorized use” meansthe use of a Card (regardless of the type of account to which Transactionsinitiated with such Card are posted) by a person other than the Cardholderwho does not have actual, implied, or apparent authority for such use, andfrom which the Cardholder receives no benefit.5. Non-applicability. This Rule shall not apply:a. to Cards issued to an entity other than a natural person or primarily forbusiness, commercial, or agricultural purposes, except that the Ruleshall apply to the Card Programs for small businesses described onwww.mastercardbusiness.com; orb. if a PIN is used as the Cardholder verification method for unauthorizedTransaction(s); orc. to any Card issued or sold to a person until such time as that person’sidentity is registered by or on behalf of the Issuer in connection withthe issuance and/or use of such Card, which registration may includeappropriate customer identification program requirements.United States Region Rules5.11 Prohibited Practices©1969–2010 MasterCardMasterCard Rules • 24 November 2010 15-115.11 Prohibited Practices5.11.3 Minimum/Maximum Transaction Amount ProhibitedRule 5.11.3 of Chapter 5, “Merchants and Sales Transactions” is modified toinclude the following:A Merchant may set a minimum Transaction amount to accept a Card thatprovides access to a credit account, under the following conditions:1. the minimum Transaction amount does not differentiate between Issuers;and2. the minimum Transaction amount does not differentiate betweenMasterCard and another acceptance brand; and3. the minimum Transaction amount does not exceed USD 10 (or any higheramount established by the Federal Reserve by regulation).A Merchant may set a maximum Transaction amount to accept a Card thatprovides access to a credit account, under the following conditions:1. the Merchant:a. is a department, agency or instrumentality of the U.S. Government; orb. is a corporation owned or controlled by the U.S. Government; orc. is a Merchant whose primary business is reflected by one of thefollowing MCCs:i. MCC 8220—Colleges, Universities, Professional Schools, JuniorColleges; orii. MCC 8244—Schools, Business and Secretarial; oriii. MCC 8249—Schools, Trade and Vocational; and2. The maximum Transaction amount does not differentiate between Issuers;and3. The maximum Transaction amount does not differentiate betweenMasterCard and another acceptance brand.*chg*United States Region Rules5.13 Discounts or Other Benefits at the Point of Interaction15-12©1969–2010 MasterCard24 November 2010 • MasterCard Rules5.13 Discounts or Other Benefits at the Point ofInteractionSubject to other Standards, a Card may not access a discount or other benefitat a Point of Interaction (POI) located in the United States Region unless suchdiscount or other benefit may be accessed by any valid and properly presentedCard.The following are the only discount practices permitted in conjunction with aparticular Card at the POI:1. A discount or other benefit accessed after the Transaction has beencompleted (for example, a credit on the billing statement or a rebate); and2. A discount or other benefit accessed at the time of or after the Transactionhas been effected by a separate instrument and not by the Card (forexample, a coupon or a voucher).The promotion at the POI of a discount or other benefit that may be accessedby any particular Card is prohibited.6.2 Affinity and Co-brand Card Programs6.2.5 Multiple PartnersRule 6.2.5 of Chapter 6, “Special Issuer Programs,” is modified such that morethan one Affinity Card or Co-brand Card Program logo may appear on the faceof the Card, subject to the discretion of the Corporation, which is charged withthe responsibility of ensuring that:1. The card is clearly identifiable as a Card product;2. The Mark remains prominent on the Card face; and3. The Mark is not obscured by the proliferation of other names and/or logos;and4. The presence of multiple logos does not in any way damage or impair thestrength of the MasterCard brand.The decision as to whether any given Card design conforms to theseconditions is reserved to the Corporation’s staff.United States Region Rules8.2 Nondiscrimination©1969–2010 MasterCardMasterCard Rules • 24 November 2010 15-138.2 NondiscriminationRule 8.2 of Chapter 8, “Cash Disbursements,” is modified to include thefollowing:Subject to compliance with the Standards, each Member within the U.S. Regionmust provide cash disbursement services to all Cardholders at all of theMember’s offices where teller services are provided.©1969–2010 MasterCardMasterCard Rules • 29 October 2010 15a-i15a United States Region Debit-related RulesThis chapter contains debit-related Rules that apply only in the United StatesRegion.Organization of this Chapter ………………………………………………………………… 15a-1Definitions …………………………………………………………………………………………. 15a-12.7 Liability for Assigned ICAs and BINs ……………………………………………….. 15a-12.20 Risk of Loss …………………………………………………………………………………. 15a-24.2 General Rules for Use of the Marks ………………………………………………… 15a-24.2.6 Particular Use of a Mark ………………………………………………………… 15a-24.2.6.6 Use on Cards ………………………………………………………………… 15a-25.1 The Merchant Agreement……………………………………………………………….. 15a-25.1.2 Required Terms …………………………………………………………………….. 15a-25.8 Card Acceptance Requirements ………………………………………………………. 15a-35.8.1 Honor All Cards…………………………………………………………………….. 15a-35.8.2 Merchant Acceptance …………………………………………………………….. 15a-3United States Region Debit-related RulesOrganization of this Chapter©1969–2010 MasterCardMasterCard Rules • 29 October 2010 15a-1Organization of this ChapterThe Rules in this Chapter 15a are variances and additions to the “global” Rulesresulting from the settlement of In Re Visa Check/MasterMoney AntitrustLitigation. These Rules apply to Debit MasterCard Cards and Other Cardsissued in the U.S. Region by U.S. Region Members and presented for paymentat Merchant locations in the U.S. Region. Members and Merchants in the U.S.Region must continue to comply with the global Rules for Cards issued byMembers outside of the U.S. Region and presented for payment at Merchantlocations in the Region.With respect to Debit MasterCard Cards, these Rules apply where signature isused as the Cardholder verification method (CVM) or where no CVM isrequired. For Rules applicable to Debit MasterCard Cards where PIN is usedas the CVM, refer to Chapter 15b.DefinitionsSolely for the purposes of this Chapter 15a, the following terms have themeanings set forth below.1. “Debit” or “Debit MasterCard Card” or “Debit Card” shall mean any AccessDevice, Program, or Card issued in the Region, by a Regional Member, thatwhen presented for payment in the United States, accesses, debits, holds,or settles funds from a consumer’s demand deposit or asset account.“Debit” or “Debit MasterCard Card” shall include consumer signature debitPrograms, stored value Programs, prepaid Cards, payroll Cards, electronicbenefit transfer Cards, and deferred debit Cards that access, debit, hold, orsettle funds from the user’s demand deposit or asset account less thanfourteen days after the date of purchase. “Debit” shall not include anypoint-of-sale device that accesses, debits, hold, or settles funds from theuser’s demand deposit or asset account fourteen or more days after thedate of the purchase.2. “Other Card” shall mean any Access Device, Program, or Card that is notdefined as “debit” or “Debit MasterCard Card”.2.7 Liability for Assigned ICAs and BINsRule 2.7 of Chapter 2, “Licensing and Licensed Activities,” is modified toinclude the following:Transaction/BIN Identification. Members must use specific and unique bankidentification numbers (BINs) for Debit MasterCard Cards.United States Region Debit-related Rules2.20 Risk of Loss15a-2©1969–2010 MasterCard29 October 2010 • MasterCard Rules2.20 Risk of LossIn addition to the Rules in Chapter 2, “Licensing and Licensed Activities,” thefollowing applies:The Risk of Loss Rule applies with respect to affiliate debit Licensees in thesame manner as it applies to Members.4.2 General Rules for Use of the Marks4.2.6 Particular Use of a Mark4.2.6.6 Use on CardsRule 4.2.6.6 of Chapter 4, “Trademarks and Service Marks,” is modified toinclude the following:Clear and Conspicuous Debit Identifier. Members must display1. the Debit MasterCard Hologram instead of the MasterCard GlobalHologram on the front of all Debit MasterCard Cards issued in the UnitedStates, in the position required for the MasterCard Global Hologram, or2. the “Debit” word mark on the Card front if the Debit MasterCard Hologramis on the Card back. Debit MasterCard Cards must conform to theStandards set forth in the Security Rules and Procedures manual and theCard Design Standards System.5.1 The Merchant Agreement5.1.2 Required TermsRule 5.1.2 of Chapter 5, “Merchants and Sales Transactions,” is modified toinclude the following:In addition to the Standards set forth in Chapter 5, Merchant Agreements mustprovide the Merchant with the option, and the applicable Merchant discountrate for each option, to elect to accept Debit MasterCard Cards only, OtherCards only, or both Debit MasterCard Cards and Other Cards. With respect toany contract existing on or before 1 January 2004, under which a Merchantaccepts Cards, a Merchant may choose to stop accepting Debit MasterCardCards or Other Cards by providing no less than 30 days advance written noticeto its Acquirer.United States Region Debit-related Rules5.8 Card Acceptance Requirements©1969–2010 MasterCardMasterCard Rules • 29 October 2010 15a-35.8 Card Acceptance Requirements5.8.1 Honor All CardsRule 5.8.1 of Chapter 5, “Merchants and Sales Transactions,” is replaced withthe following:Honor All Debit MasterCard Cards. Merchants that choose to accept DebitMasterCard Cards must honor all valid Debit MasterCard Cards withoutdiscrimination when properly presented for payment. The Merchant mustmaintain a policy that does not discriminate among customers seeking to makepurchases with a Debit MasterCard Card.Honor All Other MasterCard Cards. Merchants that choose to accept Other Cardsmust honor all Other Cards without discrimination when properly presentedfor payment. The Merchant must maintain a policy that does not discriminateamong customers seeking to make purchases with another Card.5.8.2 Merchant AcceptanceMerchants that accept Cards may choose to accept Debit MasterCard Cardsonly, Other Cards only, or both Debit MasterCard Cards and Other Cards.Acquirers must advise the Corporation when a Merchant in the Region choosesnot to accept either Debit MasterCard Cards or Other Cards.Merchants that request signage for the purpose of indicating their acceptanceof Debit MasterCard Cards must display such signage for a minimum of threemonths. The signage may be requested atwww.mastercardweacceptdebit.com.Acquirers must provide a complete list of the BINs that apply to DebitMasterCard Cards to Merchants upon any form of reasonable request.©1969–2010 MasterCardMasterCard Rules • 29 October 2010 15b-i15b United States Region PIN-based DebitTransaction RulesThis chapter contains Rules that apply only to PIN-based Debit MasterCardTransactions occurring in the United States Region.Organization of this Chapter ………………………………………………………………… 15b-1Definitions …………………………………………………………………………………………. 15b-13.9 Transaction Requirements ………………………………………………………………. 15b-23.9.6 PIN-based Debit Transactions ………………………………………………… 15b-24.2 General Rules for Use of the Marks ………………………………………………… 15b-24.2.6 Particular Use of a Mark ………………………………………………………… 15b-24.2.6.6 Use on Cards ………………………………………………………………… 15b-2United States Region PIN-based Debit Transaction RulesOrganization of this Chapter©1969–2010 MasterCardMasterCard Rules • 29 October 2010 15b-1Organization of this ChapterRules in this Chapter 15b are variances and additions to the “global” Rules thatapply in the U.S. Region. These Rules relate to Debit MasterCard Cards wherea PIN is used as the Cardholder verification method.DefinitionsSolely for the purposes of this Chapter 15b, the following terms have themeanings set forth below.1. “Debit” or “Debit MasterCard Card” shall mean any Access Device or Cardthat, when presented for payment in the United States, accesses, debits,holds, or settles funds from a demand deposit or asset account and wherePIN is used as the Cardholder verification method.2. “Service Marks” shall mean (i) from an issuing perspective, the MasterCardWord Mark and/or the MasterCard Brand Marks as those terms are definedin the Definitions chapter of this manual, and (ii) from an acquiringperspective, the MasterCard Word Mark and/or the MasterCard BrandMarks as those terms are defined in the Definitions chapter of this manualand the MAESTRO trademarks, trade names, service marks, logotypes, andtrade designations made available for use pursuant to License by theCorporation.3. “Maestro Service Marks” shall mean the MAESTRO trademarks, tradenames, service marks, logotypes, and trade designations made available foruse pursuant to license by the Corporation.4. “Cirrus Service Marks” shall mean the CIRRUS trademarks, trade names,service marks, logotypes, and trade designations made available for usepursuant to license by the Corporation.United States Region PIN-based Debit Transaction Rules3.9 Transaction Requirements15b-2©1969–2010 MasterCard29 October 2010 • MasterCard Rules3.9 Transaction Requirements3.9.6 PIN-based Debit TransactionsMembers may choose to issue Debit MasterCard Cards where a PIN is used asthe Cardholder verification method and/or acquire Transactions effected withsuch Cards as defined in this Chapter 15b. If Members so choose, the rulescontained in the Maestro Global Rules will apply to such Transactions except1. for the requirements contained in sections 1.2 Membership, 1.3.1 LicenseApplication Process (as those requirements relate to issuing Activity), 1.7Termination from the Organization, 4.3 Display on Cards, and 6.1.1 b.1.Eligible Cards, of that rulebook, and2. that when the term “Member” appears in the text of the Maestro GlobalRules, the definition of that term contained in the Definitions chapter ofthis manual applies, and3. that when the term “Service Marks” appears in the text of the MaestroGlobal Rules, the definition of that term contained in part 2 of theDefinitions section in this Chapter 15b applies.4.2 General Rules for Use of the Marks4.2.6 Particular Use of a Mark4.2.6.6 Use on CardsRule 4.2.6.6 of Chapter 4, “Trademarks and Service Marks,” is modified toinclude the following:1. The Maestro and/or Cirrus Service Marks must not appear on DebitMasterCard Cards issued on or after 1 June 2006. Effective 1 June 2007, theMaestro and/or Cirrus Service Marks must not appear on Debit MasterCardCards.2. Issuers that display regional debit brands on their Debit MasterCard Cardsmust place the MasterCard Brand Mark on the back (in equal size andprominence with those regional debit brands) as well as on the front of theCard. Refer to the Card Design Standards System for additionalinformation.©1969–2010 MasterCardMasterCard Rules • 29 October 2010 A-iA Geographic ListingA.1 Asia/Pacific Region ………………………………………………………………………….. A-1A.2 Canada Region ………………………………………………………………………………… A-1A.3 Europe Region ………………………………………………………………………………… A-2A.3.1 Single European Payments Area (SEPA) …………………………………….. A-3A.4 Latin America and the Caribbean Region …………………………………………… A-3A.5 South Asia/Middle East/Africa Region ……………………………………………….. A-4A.6 United States Region ………………………………………………………………………… A-5Geographic ListingA.1 Asia/Pacific Region©1969–2010 MasterCardMasterCard Rules • 29 October 2010 A-1A.1 Asia/Pacific RegionThe Asia/Pacific Region includes the following countries or territories.American Samoa AustraliaBrunei Darussalam CambodiaChina Christmas IslandCocos (Keeling) Islands Cook IslandsEast Timor FijiFrench Polynesia GuamHeard and McDonald Islands Hong KongIndonesia JapanJohnston Island KiribatiKorea, Republic of Lao People’s Democratic RepublicMacau MalaysiaMarshall Islands MicronesiaMidway Islands MongoliaNauru New CaledoniaNew Zealand NiueNorfolk Island Northern Mariana IslandsPalau Papua New GuineaPhilippines PitcairnSamoa SingaporeSolomon Islands TaiwanThailand TokelauTonga TuvaluU.S. Minor Outlying Islands VanuatuViet Nam Wake IslandWallis and FutunaA.2 Canada RegionThe Canada Region is composed of Canada.Geographic ListingA.3 Europe RegionA-2©1969–2010 MasterCard29 October 2010 • MasterCard RulesA.3 Europe RegionThe Europe Region includes the following countries or territories.Albania AndorraAntarctica ArmeniaAustria AzerbaijanBelarus BelgiumBosnia and Herzegovina BulgariaChannel Islands CroatiaCyprus Czech RepublicDenmark EstoniaFalkland Islands (Malvinas) Faroe IslandsFinland FranceGeorgia Germany, Republic ofGibraltar GreeceGreenland HungaryIceland IrelandIsle of Man IsraelItaly KazakhstanKosovo KyrgyzstanLatvia LiechtensteinLithuania LuxembourgMacedonia MaltaMoldova, Republic of MonacoMontenegro, Republic of NetherlandsNorway PolandPortugal RomaniaRussian Federation San MarinoSerbia, Republic of SlovakiaSlovenia SpainSt. Helena Svalbard and Jan MayenSweden SwitzerlandTajikistan TurkeyTurkmenistan UkraineUnited Kingdom UzbekistanVatican CityChanges in allegiance or national affiliation of a part of any of the countrieslisted in this appendix shall not affect the geographic coverage of thedefinition.Geographic ListingA.4 Latin America and the Caribbean Region©1969–2010 MasterCardMasterCard Rules • 29 October 2010 A-3A.3.1 Single European Payments Area (SEPA)The Single European Payments Area includes the following countries orterritories.Andorra Greece NetherlandsAustria Hungary NorwayBelgium Iceland PolandBulgaria Ireland PortugalChannel Islands Isle of Man RomaniaCyprus Italy San MarinoCzech Republic Latvia SlovakiaDenmark Liechtenstein SloveniaEstonia Lithuania SpainFinland Luxembourg SwedenFrance Malta SwitzerlandGermany Monaco United KingdomGibraltar Vatican CityA.4 Latin America and the Caribbean RegionThe Latin America and the Caribbean Region includes the following countriesor territories.Anguilla Antigua and BarbudaArgentina ArubaBahamas BarbadosBelize BermudaBolivia BrazilCayman Islands ChileColombia Costa RicaDominica Dominican RepublicEcuador El SalvadorGrenada GuatemalaGuyana HaitiHonduras JamaicaMexico MontserratNetherlands Antilles NicaraguaGeographic ListingA.5 South Asia/Middle East/Africa RegionA-4©1969–2010 MasterCard29 October 2010 • MasterCard RulesPanama ParaguayPeru Puerto RicoSt. Kitts-Nevis St. LuciaSt. Vincent and the Grenadines SurinameTrinidad and Tobago Turks and Caicos IslandsUruguay VenezuelaVirgin Islands, British Virgin Islands, U.S.A.5 South Asia/Middle East/Africa RegionThe South Asia/Middle East/Africa Region includes the following countries orterritories.Afghanistan AlgeriaAngola BahrainBangladesh BeninBhutan BotswanaBouvet Island British Indian Ocean TerritoryBurkina Faso BurundiCameroon Cape VerdeCentral African Republic ChadComoros CongoCôte D’Ivoire Democratic Republic of the CongoDjibouti EgyptEquatorial Guinea EritreaEthiopia French Southern TerritoriesGabon GambiaGhana GuineaGuinea-Bissau IndiaIraq JordanKenya KuwaitLebanon LesothoLiberia Libyan Arab JamahiriyaMadagascar MalawiMaldives MaliMauritania MauritiusMorocco MozambiqueNamibia NepalNiger NigeriaOman PakistanGeographic ListingA.6 United States Region©1969–2010 MasterCardMasterCard Rules • 29 October 2010 A-5Palestine QatarReunion RwandaSao Tome and Principe Saudi ArabiaSenegal SeychellesSierra Leone SomaliaSouth Africa Sri LankaSwaziland Syrian Arab RepublicTanzania, United Republic of TogoTunisia UgandaUnited Arab Emirates Western SaharaYemen ZambiaZimbabweA.6 United States RegionThe United States Region is composed of the United States.
Filed under: MasterCard, Visa Tagged: mastercard, merchant account, visa, Visa Agents
