Q: Does compensation from contracts entered into prior to October 1, 2011, count for purposes of the prohibition on net compensation?
A: Payments (including incentive payments and rebates) made by a payment card network or issuer on or after October 1, 2011, are included in the net compensation test, even if the payments are made pursuant to contracts entered into prior to October 1, 2011. Issuers and networks may have to renegotiate contracts if obligations under these contracts would result in the issuer receiving net compensation from the network under § 235.6(b). (Added September 14, 2011)
This Q&A was obtained from FRB’s website, in a section for Regulation II (Debit Card Interchange Fees and Routing) Frequently Asked Questions, which may be found here: