The Federal Trade Commission (FTC) has recently issued an order to Mastercard, one of the world's largest payment processing companies, to change some of their business practices. The FTC believes that Mastercard is not complying with the 2010 Dodd-Frank Act, which states that vendors should have a choice of at least two unaffiliated payment networks. Mastercard has responded by saying that they believe their practices have been lawful, and that they will update their processes to comply with the FTC's demands.
The company also argues that tokenization, a process of replacing sensitive cardholder financial information with alternative, less sensitive IDs, provides an increased level of protection to both consumers and merchants. The Wall Street Journal reported that the FTC has been investigating Mastercard and Visa for years and recently widened the probe to include routing challenges from security tokens. Both companies have been promoting the technology because they believe it helps protect against fraud.
This issue is important for 15-year-olds to understand as it affects their online safety. Tokenization is a technology that helps protect their sensitive financial information when making online purchases, and it is important that companies like Mastercard and Visa follow laws like the Dodd-Frank Act to ensure that customers have the best protection possible. It is also important that companies comply with the FTC's demands to ensure that customers have a choice of at least two unaffiliated payment networks.