MasterCard credit cards are issued to customers not by MasterCard, but by an issuing bank. These credit cards will have varying terms/rewards, as every bank is different. The below guide is a handy reference to see how cards are typically classified. Note that issuing banks have a lot of “leeway” in how they classify a card. So, some cards may have similar benefit structures, yet will fall into different categories. What’s important to keep in mind is that you have NO control over this aspect of card acceptance. You can’t tell what type of card you’re accepting just by looking at it, and most customers won’t even know their card type if you ask them. This process is designed to be “invisible” and in the background.
These are the more “basic” MasterCard credit cards. They still include a bunch of perks like identity theft services and price protection from some retailers. These are cards that are often times co-branded from a specific retailer, or that will be issued by smaller local banks or credit unions. Interchange rates for these cards are the lowest, typically ranging between 1.58% and 1.89%.
Enhanced cards are similar to the Core cards, but typically include an extra set of rewards, typically exclusive to groceries and fuel purchases. MasterCard cardholders can access the Fuel Rewards network, to get perks at many retailers and gas stations without having to enroll in separate discount cards. Enhanced cards have similar interchange structures as the World Cards, and are typically in the 1.73% – 2.04% range.
World cards are the most common “rewards” card type in the MasterCard family. Most people know these cards from the flashy commercials and promises of “XYZ” rewards. Cards will often have a cash-back component, and are typically targeted at higher-net-worth spenders. Sometimes, cards in this category may have an annual fee. Benefits are stronger, including concierge services, travel services, and enhanced price protection. Rates are higher, in the 1.77% – 2.05% range.
World Elite is the cat’s meow of the MasterCard brand. It heavily focuses on high-spend customers, and benefits are geared strongly towards travel. Cardholders will get access to vacation/cruise programs, rental car deals, chauffeur services, and other fancy extras. Airline discounts are also included, so travelers like these cards. Most customers will pay a decently-sized annual fee for the extra perks. Interchange rates are high, in the 2.20% – 2.50% range.
What about Debit and Prepaid?
Debit / Prepaid Cards
Most Debit and Prepaid cards work differently than credit cards, as they’re regulated by the federal government. As such – there are far less categories/classifications of debit cards. Instead, debit and prepaid cards are treated either as “regulated” by the government, or they’re not. So typically, as the merchant, you’ll have a better idea of what rate you’ll pay when a customer hands you a debit cards. See the two main categories, below.
Regulated debit and prepaid cards are just that – they’re regulated by the federal government, to be “capped” at a specific interchange rate. When the Durbin amendment passed through Congress in 2011, it forced all banks with assets over $10 billion to cap interchange fees at 0.05% and $0.22/transaction for all debit/prepaid cards , in all circumstances, no matter what. This means debit/prepaid cards from big banks will always have low interchange rates.
This card type refers to any debit card that is issued by a bank that doesn’t have at least $10 billion in assets. So, think smaller. Local banks, credit unions, and other smaller financial institutions that issue credit cards will fall into this category. Non-regulated debit cards are still cheap compared to their credit counterparts, since there’s little risk of dispute/fraud for the issuing bank. Interchange rates are typically 1.05% + $0.15/transaction up to 1.60% + $0.15/transaction.
Same idea as an exempt debit card – this card type refers to any prepaid card that is issued by a bank that doesn’t have at least $10 billion in assets. Interchange rates are similar to their debit counterparts – typically 1.05% + $0.15/transaction up to 1.76% + $0.20/transaction.