Mastercard Launches Its First Transgender Card. How Will It Affect Business Owners?

Reports came out a few months ago that Mastercard would be soon coming out with its a transgender and nonbinary payment card.

Update

According to The New York Times, it will start next month. BMO Harris Bank will launch the first of several Mastercard True Name cards. BMO Harris Bank will offer debit and ATM cards with the ability of cardholders to use their chosen name on their card even before updating their legal information.

How Will It Work?

Before we get into the details, please be advised that the goal of this article is to describe cardholder changes to merchants. This article is not a political or social commentary and should not be viewed as such.

According to The New York Times, cardholders will have to apply for these cards with their current legal name, for banking purposes, but they will be using their chosen name on the physical card.

From The Cardholder Side

BMO Harris Bank has made it clear that the application process will use the legal name. However, the application process is only the first step. There are several outstanding questions:

Will the card statement billing name be the legal or chosen version?

Will the attached checking account be and corresponding statements use the legal or chosen name?

If a purchase is made online, will the cardholder have to choose to use either their legal or chosen name at checkout, or will both work?

From The Merchant Side

There are several issues that BMO Harris Bank, Mastercard, and the corresponding credit card processors need to address for merchants to ensure a smooth rollout:

Will transactions approve for both the legal and chosen name?

Will there be billing surcharges if the legal or chosen name is used?

If either name can be used at checkout, but surcharges may apply, how can a merchant account influence the purchasing decision to pick the lower rate?

What happens with card authorization forms, recurring billing agreements, and other contracts that are supposed to match billing information?

Even though the first card is a debit card, what happens when these changes extend to credit cards? Will new chargeback loopholes emerge?

What We Don’t Want to See

Our concern is that merchants already have enough complications when it comes to accepting credit cards. We don’t want to see merchants lose payments because the issuing bank, card network, or credit card processors lack a full implementation plan. When we represent merchants, we always seek to limit the obstacles to accepting payment. Hopefully, this change will have minimal issues, and electronic commerce will continue uninterrupted.

Don’t Take On The Credit Card Processors By Yourself

Since 2009, IdealCost.com has helped hundreds of companies nationwide reduce their merchant account fees through identifying and fixing hidden profit, overcharges, fake fees, and billing errors. Clients have saved $300-$20,000 per month on their credit card processing fees without going through the hassle of changing their processing vendor, bank, or equipment. Switching credit card processors should be a last resort, only reserved for funding delays, poor customer service, or technical difficulties. Before you consider switching credit card processors, see if you qualify for our small business services monthly savings program. Upload your most recent merchant statement for a free analysis. You’ll receive an estimate within 24 business hours.

If you are opening a new credit card processing account or switching credit card processors, feel free to contact us for a free consultation. IdealCost.com can help secure the best terms and fees based on your specific needs.