Accepting Mastercard as a merchant

Interchange goes to the issuing bank and is capped in regulated markets. Scheme fees go to Mastercard, are not capped, and have grown as a proportion of total acceptance cost over the past decade. Acquirer markup is your provider’s margin and the only genuinely negotiable component. Under blended pricing all three are invisible, which is convenient for exactly one party in the relationship.

Mastercard stopped issuing Maestro in Europe from 1 July 2023, with existing cards running to expiry and 2027 as the outside date. Volume has been shifting to Debit Mastercard continuously since. If your rate card prices the two differently, your effective cost has been changing for three years without a contract amendment and without notification. Checking that is a straightforward comparison and very few merchants have run it.

The surcharging ban and the interchange cap are drawn along the same line. Article 62(4) of PSD2 stops you charging for the use of any payment instrument whose interchange is regulated under the Interchange Fee Regulation, and for the transfers and direct debits covered by Regulation 260/2012. Consumer Mastercard and Visa cards issued in the EEA sit squarely inside that.

Outside it sit the same instruments the cap misses: commercial cards, and three party schemes such as American Express and Diners Club. Article 62(4) does not reach them. Article 62(5) then allows each member state to prohibit or limit surcharging further, and several have, so this is a national answer to be checked per market rather than a European one to be assumed.

The right the same article gives you is worth more than the one it removes. Article 62(3) stops your provider preventing you from steering a customer towards a given instrument, or offering a reduction for using it. Presentation order, default selection and a discount are yours to set, and they move payment mix faster and more quietly than a surcharge does.

Strong customer authentication is not only a compliance step. It decides who pays for fraud. Article 74(2) of PSD2 puts it plainly: where the payee or the payment service provider of the payee fails to accept strong customer authentication, it shall refund the financial damage caused to the payer’s payment service provider.

Exemptions are where that becomes expensive. The European Banking Authority has confirmed that the cardholder’s own bank stays liable to the cardholder for an unauthorised transaction, but that where the acquiring side invokes an exemption and the transaction goes through unauthenticated, the acquiring side carries the loss towards the issuing side.

That is the calculation sitting behind every exemption. Transaction risk analysis and low value exemptions lift conversion by removing a step, and they move the fraud loss onto the party that removed it. Whether the trade is worth making is a number rather than a preference, and it comes out of your own authentication and fraud data.

What you pay is set in your acquiring contract, not by the scheme. Start by establishing whether you are overpaying your PSP, or move straight to cutting your PSP costs, where interchange, scheme fees and markup are separated before anything is negotiated.

Relevant markets: global