MasterCard revises rate change requirements
On February 12, 2015, MasterCard® announced their intent to modify the interchange rates associated with their debit card program within the education market. In their original announcement, MasterCard indicated that there would be a mandatory convenience fee cap of no more than $4.95, per transaction, or no more than of 1% of the total transaction amount.
Following this announcement, many MasterCard association members offering convenience fee programs provided substantial feedback that significant coding efforts would be required to effectively implement the proposed changes. In response, MasterCard has altered the mandate to an “encouraged” change.
When the new rates were initially announced, NBS undertook a thorough examination of our systems to determine the impact the outlined changes would have on operations. Following that evaluation, it was determined that significant technical work would be required to implement these changes, which would delay the release of other new features currently in production. Additionally, our examination revealed that less than 5% of all card transactions that flow through NBS systems utilize MasterCard debit. Given these factors, NBS, like many of the other MasterCard association members, has chosen not to alter the existing convenience fee rates associated with MasterCard debit transactions at the present time.
We understand the importance of providing students with the widest variety of payment options possible. NBS is committed to ensuring that all payment options available to our clients are fully-compliant with all applicable regulatory and merchant requirements. We will remain in close contact with MasterCard and provide updates as necessary.
President, Nelnet Business Solutions