Product: MasterCard-branded debit cards

Company: MasterCard International

An outcome of Visa's and MasterCard's settlement with retailers is a change in the associations' "honor all cards policy." Now that retailers can be choosy when accepting debit cards for payment, they'll want to make sure they can more easily identify the MasterCard and Visa-branded signature -based (offline) debit cards - especially if they've chosen not to accept them. Offline, online - the cards all look the same. It's the transaction fees that matter to the merchants.

Beginning January 1, 2004, MasterCard International will require its U.S. debit card issuers to clearly label their offline debit cards with a new "debit" hologram. This new standard for offline debit cards is also part of MasterCard's settlement.

Standing at the checkout line, debit card in hand, most consumers - at one time or another - have been asked by a merchant, "Credit or debit?" The question really means "credit or debit network," not credit or debit card. To most cardholders, there is little difference in the transaction other than that they sign for their purchases or they enter a PIN.

But merchants know the difference because the fees they pay for PIN-based transactions (online) typically have been less than the fees for signature-based transactions.

The new debit hologram is required only on MasterCard's signature-based debit, stored value, EBT, prepaid and payroll cards and is not required on Maestro, MasterCard International's PIN-based debit card or debit MasterCard BusinessCard programs. The debit card issuers are required to have 80% of their cards re-issued with a new "debit" identifier by July 1, 2005, and 100% must be compliant by January 1, 2007.

MasterCard International

Global Headquarters

2000 Purchase Street

Purchase, NY 10577

914-249-2000

www.mastercard.com