Europe Region

Pricing
Bulletin No.,14 13 September 2016

Revised Account Data Compromise Program

Service Fees
Topic(s): Fraud/Risk, Pricing/Fees

Issuers

Processors

May Apply To:

Acquirers

Summary:

Effective 1 January 2017, issuers who opt-into the Mastercard Account

Data Compromise (ADC) Program and who receive the benefits of
MasterCard recovery in addition to ADC investigations, will be charged
an annual opt-in fee for 2017, as described in this bulletin.

Action Indicator:

Financial impact

Customer must register to have access to product or service

Attention warranted

Effective Date:

1 January 2017

Overview
Since 2007, MasterCard has administered a program that enables an issuer to partially
recover costs incurred for fraud losses, and costs for reissuing and enhanced monitoring of
at-risk MasterCard accounts, associated with a conclusive ADC Event. Issuer reimbursement
is provided in the form of Fraud Recovery (FR) and Operational Reimbursement (OR), and
is collected from the responsible customer(s) accountable for the Event. The OR and
FR calculations are determined by card technology type and the amount of counterfeit
fraud reported in the System to Avoid Fraud Effectively (SAFE) over a particular period,
respectively. These rates were enhanced in 2014 and 2015, and are outlined in the Account
Data Compromise User Guide available via MasterCard Connect.

2016 Mastercard. Proprietary. All rights reserved.

Production ReviewDue

Following the conclusion of an ADC investigation, MasterCard assessed a case

management fee to the responsible customer. In addition, MasterCard imposed
an administrative fee to the issuing bank for processing the financial liability
related to an ADC Event. This equated to 3 percent for OR and 5 percent for
FR, with a cap of USD 75,000 on each.
Effective 1 January 2016, MasterCard made a number of changes to the ADC
Program, most notably, that eligibility for reimbursement from MasterCard
related to an ADC event became optional for issuers. Additionally, MasterCard
eliminated the case management fee that was imposed on acquiring banks
as well as the administrative fees imposed on issuing banks. Issuers in the
Asia/Pacific region received the benefits of the ADC Program without paying a
fee in 2016. During that time, MasterCard collected feedback and conducted
analysis to determine the most appropriate Annual Service Fee to most
accurately reflect the value of the service for customers. For details related to
these changes and other ADC Program changes, refer to the article Revised
Standards for the MasterCard Account Data Compromise Program in Global
Security Bulletin No. 9, 15 September 2015.

Annual Service Fee

Given the established value of the MasterCard ADC recovery program to
issuing banks which include ADC Alerts containing compromised or potentially
compromised cards, as well as ADC related recovery in the form of enhanced
OR and FR rates, MasterCard will apply an Annual Service Fee to all issuers who
choose to participate in the ADC Program in 2017.
MasterCard will assess issuers that choose to opt-into the MasterCard ADC
reimbursement program and become eligible for OR and FR reimbursement, as
well as the value and benefit of MasterCard ADC investigations, the determined
service fee, described as follows.
Issuers that do not opt-into the ADC reimbursement program will not be eligible
for any financial reimbursement related to a 2017 ADC investigation and will
not be charged an Annual Service Fee, but will still continue to receive ADC
Alerts. Issuers that choose to opt-out of the ADC Program will not be charged
any Annual Service Fee.
The Annual Service fees will be based on the number of MasterCard issued
accounts reported to Quarterly MasterCard Report (QMR) in fourth quarter of
2016. The opt-in fee will be assessed at the Parent ICA level corresponding to
the same method for issuer reimbursements. A non-response will be deemed
as an opt-out.

Account Range Based on the QMR

Annual Opt-In Rate

0400,000

EUR 500

400,001700,000

EUR 1,000

Revised Account Data Compromise Program Service Fees

Europe Region Pricing Bulletin No. 14, 13 September 2016
2016 Mastercard. Proprietary. All rights reserved.

Production ReviewDue

Account Range Based on the QMR

Annual Opt-In Rate

700,0013 million

EUR 4,000

3 million10 million

EUR 6,000

10 million20 million

EUR 15,000

More than 20 million

EUR 20,000

The following MasterCard Consolidated Billing System (MCBS) billing event will
apply. The first billing will occur March 2017.
Billing Event Number

Billing Event Name

Service ID

2KS6002

Annual Service Fee assessed to Issuer

for the Account Data Compromise
Recovery Program

KS

Cessation of ADC Reimbursements

As a reminder, effective 31 December 2016, MasterCard will cease providing
ADC reimbursement for OR and FR associated with magnetic stripe-only cards.
This change is intended to encourage EMV migration, as magnetic stripe-only
cards are less secure than EMV chip cards. This change is consistent with the
U.S. region EMV liability shift that became effective October 2015.

Questions?
Customers with questions about MasterCards Account Data Compromise
Program should refer to the Account Data Compromise User Guide and chapter
10 of the Security Rules and Procedures manual.
Customers with additional questions about the information in this article should
contact:
Account Data Compromise team
Email:

adc.opt.in@mastercard.com

Revised Account Data Compromise Program Service Fees

Europe Region Pricing Bulletin No. 14, 13 September 2016
2016 Mastercard. Proprietary. All rights reserved.

Production ReviewDue

Standards

From time to time, the author of an article appearing in this Bulletin may attempt to describe, explain, clarify or otherwise
elucidate upon a Rule or other Standard or revision thereof. No such description, explanation, clarification or other
elucidation shall be deemed to be a Rule or other Standard nor be deemed to accurately describe, explain, clarify or
otherwise elucidate upon a Rule or other Standard. In the event the Corporation, in its sole judgement, determines at any
time there to be a conflict or discrepancy between a Rule or other Standard and any description, explanation, clarification or
other elucidation thereof appearing in this Bulletin, the text of the Rule or other Standard shall be afforded precedence
and the conflicting or discrepant description, explanation, clarification or other elucidation shall be deemed of no effect as
if never published herein.

Trademarks

Trademark notices and registration symbols used in this bulletin reflect the registration status of Mastercard trademarks
in the United States. Please consult with the Global Customer Service team or the Mastercard Law Department for the
registration status of particular product, program, or service names outside the United States. All third-party product and
service names are trademarks of their respective owners.

Routing

Each Customer is responsible for ensuring that it remains in compliance with Mastercard Standards at all times. Thus, it is
the responsibility of each Customer to determine who within its organization is afforded access to Mastercard information.

Revisions

In the event of a conflict between this document and a subsequently published edition, the subsequently published edition
shall have precedence.

Proprietary Rights

The information contained in this document is proprietary and confidential to Mastercard International Incorporated, one
or more of its affiliated entities (collectively Mastercard), or both. This material may not be duplicated, published, or
disclosed, in whole or in part, without the prior written permission of Mastercard.

Disclaimer

Mastercard makes no representations or warranties of any kind, express or implied, with respect to the contents of this
document. Without limitation, Mastercard specifically disclaims all representations and warranties with respect to this
document and any intellectual property rights subsisting therein or any part thereof, including but not limited to any and all
implied warranties of title, non-infringement, or suitability for any purpose (whether or not Mastercard has been advised,
has reason to know, or is otherwise in fact aware of any information) or achievement of any particular result. Without
limitation, Mastercard specifically disclaims all representations and warranties that any practice or implementation of this
document will not infringe any third party patents, copyrights, trade secrets or other rights.

Revised Account Data Compromise Program Service Fees

Europe Region Pricing Bulletin No. 14, 13 September 2016
2016 Mastercard. Proprietary. All rights reserved.

Production ReviewDue