MasterCard Some of Brazil’s largest payment processing companies are demanding they pay half the cost of their losses resulting from a failure Panco MasterBloomberg I mentioned Friday (May 22).
Banco Master Finish Financial woe It issued cards that used Mastercard’s network, and Will’s collapse left Mastercard on the hook for reimbursing merchant buyers who processed about 5 billion reais (about $997 million) in cardholder payments, according to the report.
Mastercard paid about half that amount and suggests that before passing more money to those acquirers, it would use money collected from card customers to reimburse itself, the report said, citing unnamed sources who said they had seen a draft of a potential contract.
Mastercard did not immediately respond to PYMNTS’ request for comment.
According to a Bloomberg report, the Brazilian Central Bank has adopted new rules that make payment networks responsible for ensuring that all transactions are paid to the receiving user.
However, Mastercard told business buyers that it should not abide by those rules in Will’s case because FinTech collapsed in January, and card companies had until May to adapt to the new rules, according to the report.
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One of the Brazilian companies that received Mastercard’s draft for a potential contract, CieloHe told Bloomberg that business buyers are not responsible for payments.
“Acquirers cannot and will not be able to choose which issuers are part of the payment plan, nor are they responsible for the collateral associated with the transactions,” Cielo said, according to the report.
It was reported in November that the Brazilian Central Bank halted operations of Banco Master and renamed it a Liquidator To deal with creditor claims and sell assets. On the same day, the police arrested the controlling shareholder of the bank.
Banco Master has suffered for several months from liquidity pressures after growing rapidly by selling high-yield debt through investment platforms.
It was reported in January that Mastercard said it had suspended Will Bank cards from its network because the company had not adhered to them Settlement tables Under its own payment arrangements.
Brazil’s central bank ordered the liquidation of Will Financeira in January, as it took measures to deal with illiquid institutions linked to Banco Master.
