MasterCard’s Code of Honor

September 13, 2013

MasterCard’s Position on Anti-Competitive Accusations

MasterCard is a multinational corporation that consists of thousands of separate institutions. The organization gives consumers access to a large variety of payment options. However, MasterCard does not issue credit cards or sign merchants up to accept credit cards bearing its logo. Instead, merchants contract through a MasterCard association member bank to gain credit card processing capabilities for customer convenience. By working with a MasterCard member bank, merchants receive fraud protection, dispute assistance and more customers. Today’s credit card payment industry is founded on the Honor All Cards rule, which guarantees universal approval from all merchants that accept MasterCard.

The Honor All Cards Rule

According to MasterCard, the Honor All Cards rule is advantageous for MasterCard members and merchants. The regulation permits cardholders to select their preferred payment option without worrying that a merchant will refuse the form of payment. Merchants also benefit from the rule since it increases their revenue by expanding a consumer’s payment options. Furthermore, they gain payment assurance from MasterCard for purchased products and merchant services.



Attorney Lloyd Constantine filed an antitrust class action lawsuit against MasterCard and Visa on behalf of a group of merchants. It was filed in October of 1996. The lawsuit challenges the Honor All Cards regulation. Specifically, the merchants do not want to complete credit card processing for MasterCard or Visa trademarked offline or signature based debit cards. In addition, the suit claims that the organizations have illegally connected debit card acceptance to credit card approval. The lawsuit also states that the Honor All Cards rule is anti-competitive because it requires merchants to accept credit cards with the MasterCard logo. However, in considering the history of financing and payment methods, the rule has inspired innovation and variety.

MasterCard Worldwide Logo

MasterCard’s Position

MasterCard’s legal team intends to prove that the lawsuit is without merit. In fact, it is more likely to harm consumers since they will no longer have the ability to pay for goods and merchant services with the payment method that works best for them.

Antitrust laws are in effect to benefit consumers by giving them more choices. Furthermore, most payment systems have comparable regulations in place. If the lawsuit is successful, then it will decrease payment choices for all consumers.

Judge Barbara Jones found that MasterCard and Visa are fierce competitors, which proves that the companies have worked to create an environment that benefits consumers instead of conspiring together to create a monopoly. Due to payment selection and revenue factors, MasterCard believes that the Honor All Cards decree will remain in effect.

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Categories: Industry News, Merchant Services

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