IBA Compliance Connection

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We issue Mastercard debit cards and want to know if we can set the purchase limit to zero on some cards, effectively making them ATM cards. We have some customers who only have savings accounts, and if we issue debit cards for these accounts, the customers may use them for purchases and exceed the monthly six-transaction limit.

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We recommend reviewing the terms of your agreement with Mastercard to determine if this is allowable. The publicly available Mastercard Transaction Processing Rules indicate that transaction limits must be set at or above Mastercard’s default limits, which may be found in the Stand-In Processing—Accumulative Global Parameters (Form 041f). Consequently, you may be prohibited from decreasing certain customers’ transaction limits to zero, which likely would fall below Mastercard’s default limits.

As a side note, due to the recent Interim Final Rule removing Regulation D’s limitation on certain savings account transfers, your bank may choose not to impose a monthly limit on the number of savings account transfers your customers make.

For resources related to our guidance, please see:

  • Mastercard Transaction Processing Rules, Section 2.2.2 — Stand-In Processing Service (December 19, 2020) (“For all of its Mastercard Card Programs, an Issuer must use the Stand-In Processing Service. Stand-In Parameters for Mastercard (including Debit Mastercard) Card Programs must be set at or above the Corporation’s default limits. . . . An Issuer at its option, may use daily Stand-In Processing Service Transaction limits (‘accumulative limits’) for a Card Program that are higher than the applicable default limits set by the Corporation. Refer to the Stand-In Processing—Accumulative Global Parameters (Form 041f) for the minimum (default) daily accumulative Transaction processing limit applicable to a particular Card Program.”)
  • Regulation D: Reserve Requirements of Depository Institutions Interim Final Rule, 85 Fed. Reg. 23445, 23445 (April 28, 2020) (“The Board of Governors of the Federal Reserve System (‘Board’) is amending its Regulation D (Reserve Requirements of Depository Institutions) to delete the numeric limits on certain kinds of transfers and withdrawals that may be made each month from ‘savings deposits.’ The amendments are intended to allow depository institution customers more convenient access to their funds and to simplify account administration for depository institutions. There are no mandatory changes to deposit reporting associated with the amendments.”)
  • Savings Deposits Frequently Asked Questions (May 13, 2020) (“4. Does the interim final rule require depository institutions to suspend enforcement of the six convenient transfer limit on accounts classified as ‘savings deposits’? No. The interim final rule permits depository institutions to suspend enforcement of the six-transfer limit, but it does not require depository institutions to do so.”)