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Backgrounder: MasterCard Maestro

MasterCard Canada is actively expanding its Maestro debit product in Canada and is delivering compelling benefits to consumers and merchants.

Status of Maestro in Canada

Since late 2008, MasterCard has been working with acquirers to facilitate Maestro acceptance for merchants who choose to accept it
There are many Canadian merchants already accepting Maestro and seeing the benefits of a less expensive, technologically superior debit system
Both BMO and CUETS have Canadian cardholders with Maestro active on their cards and MasterCard continues to discuss Maestro with other issuers

About Maestro

Maestro is PIN-based debit payment
It is a well-established, proven debit solution being used by more than 650 million cardholders in more than 100 countries
The Maestro payment process is no different from Canadians’ use of debit to-date: PIN-based authorization, and direct withdrawal from the cardholder’s account
Maestro capability sits on the cardholder’s bank card where their current debit payment and ATM system access capacity also exists (not on their credit card or a separate card)

Benefits for Consumers

With Maestro, Canadian consumers can shop with debit in more than 100 countries
The Maestro system has greater scale and reliability so consumers can shop with confidence

Benefits for Merchants

Merchants control the decision to add Maestro debit capability to their terminals. MasterCard does not endorse cardholder-directed routing of debit transactions as it puts merchants at a disadvantage
Maestro has a flat fee, and no interchange (a percentage fee based on the price of the item)
Maestro is less expensive for merchants than all debit offerings in Canada
MasterCard has maintained its economical pricing of Maestro even when others were raising their prices
Maestro offers merchants the ability to process the Maestro payments of more than 650 million global cardholders as well as those of Canadians with Maestro

MasterCard operates a global debit system that delivers significantly greater scale than Canada’s incumbent debit network. The Maestro debit network has had virtually zero downtime in more than seven years. The system co-processes at three distinct sites for flawless execution and can scale up to 32 times its average peak capacity.

Routing of Debit Transactions

MasterCard’s Maestro debit product is based on operational routing, which offers a number of important advantages to the merchant while keeping the consumer experience seamless.

Merchants can choose whether to add Maestro capability to their terminals
Maestro is less expensive than any other debit network in Canada
No costly equipment upgrades are required to provide the merchant with operational routing
If the consumer’s card is not enabled for Maestro debit transactions, the transaction defaults to whatever other debit network both the card and terminal can process. This happens automatically and without extra steps or disruption to the processing of the payment
The consumer experience is unchanged – the PIN and authorization process is the same and the money deducts from their account

Other debit providers are pursing brand-based routing, in which the cardholder directs the routing of the transaction even though the cardholder does not bear the cost of his or her routing choice. It means increased cost for merchants and inefficiency at the point-of-sale:

Brand-based routing takes the debit-transaction-routing decision out of the hands of the commercial parties paying for the transaction (the merchant and the card issuer) and puts it into the hands of the party not paying for the transaction (the cardholder)
Extensive and costly equipment upgrades are required for brand-based routing even if a merchant uses only one network for debit
Confusion and frustration will occur when a cardholder requests a debit network to which a merchant is not connected
Brand-based routing will requires staff training as it introduces a new set of procedures

About MasterCard Worldwide
MasterCard Worldwide advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes approximately 21 billion transactions each year, and provides industry-leading analysis and consulting services to financial institution customers and merchants. Through its family of brands, including MasterCard®, Maestro® and Cirrus®, MasterCard serves consumers and businesses in more than 210 countries and territories. For more information go to www.mastercard.com.

For more information, please contact:
Julie Wilson
MasterCard Canada
416-365-5594 / julie_wilson@mastercard.com





			Backgrounder: MasterCard Maestro MasterCard Canada is actively expanding its Maestro debit product in Canada and is delivering compelling benefits to consumers and merchants. Status of Maestro in Canada Since late 2008, MasterCard has been working with acquirers to facilitate Maestro acceptance for merchants who choose to accept it There are many Canadian merchants already accepting Maestro and seeing the benefits of a less expensive, technologically superior debit system Both BMO and CUETS have Canadian cardholders with Maestro active on their cards and MasterCard continues to discuss Maestro with other issuers About Maestro Maestro is PIN-based debit payment It is a well-established, proven debit solution being used by more than 650 million cardholders in more than 100 countries The Maestro payment process is no different from Canadians’ use of debit to-date: PIN-based authorization, and direct withdrawal from the cardholder’s account Maestro capability sits on the cardholder’s bank card where their current debit payment and ATM system access capacity also exists (not on their credit card or a separate card) Benefits for Consumers With Maestro, Canadian consumers can shop with debit in more than 100 countries The Maestro system has greater scale and reliability so consumers can shop with confidence Benefits for Merchants Merchants control the decision to add Maestro debit capability to their terminals. MasterCard does not endorse cardholder-directed routing of debit transactions as it puts merchants at a disadvantage Maestro has a flat fee, and no interchange (a percentage fee based on the price of the item) Maestro is less expensive for merchants than all debit offerings in Canada MasterCard has maintained its economical pricing of Maestro even when others were raising their prices Maestro offers merchants the ability to process the Maestro payments of more than 650 million global cardholders as well as those of Canadians with Maestro MasterCard operates a global debit system that delivers significantly greater scale than Canada’s incumbent debit network. The Maestro debit network has had virtually zero downtime in more than seven years. The system co-processes at three distinct sites for flawless execution and can scale up to 32 times its average peak capacity. Routing of Debit Transactions MasterCard’s Maestro debit product is based on operational routing, which offers a number of important advantages to the merchant while keeping the consumer experience seamless. Merchants can choose whether to add Maestro capability to their terminals Maestro is less expensive than any other debit network in Canada No costly equipment upgrades are required to provide the merchant with operational routing If the consumer’s card is not enabled for Maestro debit transactions, the transaction defaults to whatever other debit network both the card and terminal can process. This happens automatically and without extra steps or disruption to the processing of the payment The consumer experience is unchanged – the PIN and authorization process is the same and the money deducts from their account Other debit providers are pursing brand-based routing, in which the cardholder directs the routing of the transaction even though the cardholder does not bear the cost of his or her routing choice. It means increased cost for merchants and inefficiency at the point-of-sale: Brand-based routing takes the debit-transaction-routing decision out of the hands of the commercial parties paying for the transaction (the merchant and the card issuer) and puts it into the hands of the party not paying for the transaction (the cardholder) Extensive and costly equipment upgrades are required for brand-based routing even if a merchant uses only one network for debit Confusion and frustration will occur when a cardholder requests a debit network to which a merchant is not connected Brand-based routing will requires staff training as it introduces a new set of procedures About MasterCard Worldwide MasterCard Worldwide advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes approximately 21 billion transactions each year, and provides industry-leading analysis and consulting services to financial institution customers and merchants. Through its family of brands, including MasterCard®, Maestro® and Cirrus®, MasterCard serves consumers and businesses in more than 210 countries and territories. For more information go to www.mastercard.com. For more information, please contact: Julie Wilson MasterCard Canada 416-365-5594 / julie_wilson@mastercard.com
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		© MasterCard Canada 2009