MasterCard Rules (PDF)

Licensing and Licensed Activities
2.14 Failure of a Principal or Association Customer to Discharge a Settlement Obligation
2.14 Failure of a Principal or Association Customer to
Discharge a Settlement Obligation
Subject to the limitation set forth in this Rule, if a Principal or Association
Customer fails to discharge any Settlement Obligation arising from or in
connection with any Processed Transaction, the Corporation will satisfy such
obligation(s) to the extent such obligation(s) is not otherwise satisfied. To
the extent the Corporation satisfies a Customer’s Settlement Obligation, such
satisfaction constitutes an automatic transfer, sale, and absolute assignment to
the Corporation, and not an assignment for security purposes, of all right, title,
and interest in the receivable. Such satisfaction of the Customer’s Settlement
Obligation also entitles the Corporation to all records and documents related to
the receivable, including the name and address of each Cardholder or other
person obligated to satisfy any part of the receivable. The Customer must
promptly deliver all such records and documents to the Corporation or to the
Corporation’s designee. Any proceeds received by or on behalf of the Customer
from any receivable must be held in trust by the Customer and paid to the
Corporation as soon as practicable.
The Corporation may take any action the Corporation deems necessary or
appropriate to protect its interest in the receivable and to protect the integrity of
the affairs of the Corporation, such as, by way of example and not limitation, by:
1. Refusing or rejecting Transaction authorization requests relating to use of
the Customer’s Cards.
2. Establishing a settlement account for monies due to and from the Customer.
3. Without prior notice to the Customer, holding any monies due, directly
or indirectly and for any purpose, to the Customer from the Corporation
and any Settlement Obligation(s) due to the Customer and apply those
monies to the amounts the Customer owes to the Corporation and to other
Customers arising from Participation.
4. Listing some or all of a Customer’s Card account numbers on the Electronic
Warning Bulletin file, the international Warning Notice(s), or both, or in
other or similar publications.
5. Effecting chargebacks on behalf of the Customer.
6. Overseeing the disposition of unused Card stock and any other media
bearing security-sensitive information, including Card account information.
©1969–2012 MasterCard. Proprietary. All rights reserved.
MasterCard Rules • 12 December 2012 2-11