Musing on Mastercard’s Rule 5.12.7 and what “brand-damaging transactions” even mean.
Following up on the video game payment processor drama that spawned these previous musings and ramblings. As always, this is a legal flavored existential crisis, not legal advice. If you like following along with my madness, consider subscribing so that you can descend into the void alongside me!
Mastercard insists it allows all lawful purchases. But… the documents say otherwise. The company’s own operating rules give it the power to remove lawful content when it decides the content is “brand damaging.”
5.12.7 Illegal or Brand-damaging Transactions
A Merchant must not submit to its Acquirer, and a Customer must not submit to the Interchange System, any Transaction that is illegal, or in the sole discretion of the Corporation, may damage the goodwill of the Corporation or reflect negatively on the Marks.
The Corporation considers any of the following activities to be in violation of this Rule:
The sale or offer of sale of a product or service other than in full compliance with law then applicable to the Acquirer, Issuer, Merchant, Cardholder, Cards, or the Corporation.
The sale of a product or service, including an image, which is patently offensive and lacks serious artistic value (such as, by way of example and not limitation, images of nonconsensual sexual behavior, sexual exploitation of a minor, nonconsensual mutilation of a person or body part, and bestiality), or any other material that the Corporation deems unacceptable to sell in connection with a Mark.
Rule 5.12.7 bans transactions for products or services that are illegal, or, in Mastercard’s sole discretion, may “damage the goodwill of the corporation or reflect negatively on the marks.” If that sounds vague enough to cover anything from pornography to political cartoons, it is. The list that follows is a patchwork of the obvious and the elastic: depictions of nonconsensual acts, sexual exploitation of minors, bestiality, and anything else Mastercard “deems unacceptable.” The last clause is the kind of catch-all that legal drafters love; it saves the trouble of saying out loud that they can change their mind whenever they like.
And when Mastercard decides you’ve crossed it, the price of defiance is printed right there in the manual. If they notify your acquiring bank and the bank doesn’t “promptly cause the noncompliant practice to cease,” the Corporation may impose:
$200,000 per merchant, or
$2,500 per day, retroactive to the first day of the “noncompliant practice,” unless the acquirer can prove it began less than 80 days before notice.
These assessments are per merchant, affiliate, or entity involved. They land directly on the acquiring bank, which then hands the risk down to the payment processors, who hand it to the platforms. By the time it gets to a company like Valve, the numbers are no longer theoretical, but invoices waiting for a trigger.
Let’s linger on that for a moment. A single game on Steam that violates this rule, sold continuously since 2020, would generate a retroactive daily penalty of roughly $4.5 million. For one title. In that light, Valve would be fortunate to walk away with only a $200,000 bill.
Now you understand why no one at the table argues. Acquirers and processors have every incentive to remove anything that might invite Mastercard’s attention, whether it’s illegal or not. For the platform, losing processing would be a financial blackout; even a temporary hold can starve revenue streams in days.
The content below was originally paywalled.
Valve’s account confirms this chain in motion. Mastercard didn’t knock on their door; it whispered to the intermediaries. Those intermediaries cited Rule 5.12.7 and “risk to the Mastercard brand”, and that was the end of discussion. Valve’s policy of distributing all legal content was rejected in that backroom conversation. The choice was straightforward: rewrite your rules, or lose the ability to process payments. Steam’s Rule 15 was born in that moment, not out of moral conviction but out of necessity.
What you shouldn’t publish on Steam:
[ . . . ]
Content that may violate the rules and standards set forth by Steam’s payment processors and related card networks and banks, or internet network providers. In particular, certain kinds of adult only content.
The games disappeared. Developers were given no notice, no charge sheet, no hearing. The disappearance itself became the policy. The same structure was at work when Itch.io lost payment processing from Stripe over adult content. Stripe’s explanation was compliance with card network rules; different platform, same hand on the lever.
Mastercard’s official response, that it has “not evaluated any game or required restrictions,” is technically true if you squint and tilt your head. They don’t need to. When you control the rules that control the processors that control the platforms, you do not need to watch the execution to know the sentence was carried out.
Nothing in Rule 5.12.7 limits this discretion to sexual content. The phrase “brand damaging” is a movable wall. Today it is anime avatars; tomorrow it could be violence, political dissent, or whatever else attracts the wrong kind of attention in a quarterly board meeting. Itch.io has restored some free NSFW games but keeps paid titles in limbo while negotiating with processors. Steam’s 2018 promise to allow all legal content is now subordinated to Rule 5.12.7’s brand risk test.
The process is consistent: write a rule with discretionary authority; hand it to intermediaries; let platforms enforce it to avoid financial shutdown; watch lawful content vanish without public record. There is no appeal, no oversight, and no obligation to admit it happened. It is a clean system for making problems disappear, and the most efficient part is that it never needs to admit they were problems in the first place.
This Grimoire of Many Musings is for entertainment, education, and the occasional act of legal autopsy. It is analysis, not legal advice; if you want that, hire counsel. It reflects no one’s views in real life except the voices rattling around Inverlyst’s head. No past, present, or future employer has signed off on any of this.
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