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EU Regulations

Regulatory Overview

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Rules and Regulations are the guardrails of any business activity. Below you can find some information on our business model and how we comply with some of these.

 

Our business model:

Our core network links card issuers and merchant acquirers around the globe to facilitate the switching of transactions, allowing account holders to use a Mastercard product at millions of acceptance locations worldwide.

 

Our core network facilitates an efficient and secure means for receiving payments and a convenient, quick and secure payment method for consumers to access their funds. Our range of payment capabilities extend beyond our core network into real-time account-based payments.

Typical Transaction. Our core network supports what is often referred to as a “four-party” payments network.

1. Authorization (Transaction Request)

 

This happens in a matter of seconds directly in the store.

Account Holder → Merchant

You tap your card or phone on the terminal.

Merchant → Acquirer

The terminal sends the data to the acquiring bank (the bank that services the store).

Acquirer → Core Network

The acquirer sends a request to the issuing bank via the network (Mastercard).

Issuer

The issuing bank checks if there are sufficient funds and responds with “Approved.”

2. Security and Services

 

Internal layers of the scheme work in parallel with authorization:

Payment System Security

The system instantly checks the transaction for fraud.

Cyber & Intelligence

AI algorithms are used to confirm that the card is being used by its owner.

3. Clearing (Data Exchange)

 

This usually happens at the end of the day.

Core Network

Mastercard collects all approved transactions for the day and calculates who owes whom how much.

Switching (Clearing):

Banks exchange financial messages. At this stage, the money has not yet been transferred, but the amounts are already “blocked” in the accounts.

4. Settlement

 

The final stage, which can take 1 to 3 days.

Issuer → Core Network → Acquirer

The issuing bank transfers the actual funds to the acquiring bank.

Value-Added Services

At this stage, bonuses (Loyalty and Rewards) may be accrued or analytics may be performed.

Acquirer → Merchant

The bank credits the money to the store's account (minus the commission).

 

In a typical transaction, an account holder purchases goods or services from a merchant using one of our payment products. After the transaction is authorized by the issuer, the issuer pays the acquirer an amount equal to the value of the transaction, minus the interchange fee and then posts the transaction to the account holder’s account. The acquirer pays the amount of the purchase, net of a discount to the merchant.

Key rules and procedures

Our rules and compliance programs promote reliable, simple

and safe commerce for all stakeholders.

Please refer to Chapter 1 of Mastercard Rules, which is dedicated to participation in the Mastercard scheme. Termination criteria are specified in Rule 1.13 of Mastercard Rules.

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Systemically Important Payment System

In May 2020 Mastercard was officially designated as a Systemically Important Payment System (SIPS). We take pride in the value and trust that Mastercard brings to economies around the world.

 

We achieve high standards by having appropriate controls in place to manage operational and financial risks. SIPS designation solidifies this and represents a formal recognition of our operational and financial soundness.

Code of Conduct and Separation Addendum‎

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Principles for Financial Market Infrastructures: Disclosure Framework‎

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MCE Disclosure of Transactions Data‎

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European Interchange

Find out what interchange is and the value it delivers.

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