Mastercard MA, +1.31% has adopted a new policy aimed at reducing a major source of stress for transgender and non-binary consumers.
The company is introducing the “True Name” card, which will allow card holders to choose for their preferred name to appear on their credit and debit cards even if it does not match their legal name.
The company is in the process of developing “a sensitive and private process free of personal questions” in coordination with issuers to allow consumers to choose what name they want to appear on the card, the company said.
Ultimately, individual debit- and credit-card issuers will be the ones to implement Mastercard’s policy. However, credit-card experts expected widespread adoption of this policy — not only by banks, but also Mastercard’s competitors such as Visa V, +1.35% American Express AXP, -0.40% and Discover DFS, +0.00%
“This new initiative is a good thing emotionally and psychologically,” said Ted Rossman, industry analyst at CreditCards.com. “This feels like a good common-sense initiative that others can and should get on board with.”
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While well-meaning, the new policy could still have some unintended consequences for consumers who opt to list a name on the credit or debit card that differs from what’s on their state-issued ID.
“Airline loyalty accounts typically require you to use your legal name that is on your driver’s license or passport,” said Matt Schulz, chief industry analyst at CompareCards TREE, -0.13% “If you want to collect rewards points with your credit card and have them match with an airline loyalty account, you will have to have your legal name with that credit card.”
Similarly, consumers could encounter issues on the off-chance a merchant asks to verify their credit or debit card against an ID, even though card issuers don’t require this.
Credit scores won’t be affected, however. They are connected to a person’s Social Security number and not their name, Rossman said.
Still, the move stands to eliminate a major pain point for transgender and gender-nonconforming consumers.
Also see: A European airline has added non-binary gender options when booking flights
Only 11% of transgender Americans reported that all of their IDs had the name and gender they preferred, while only 44% had updated their name on a driver’s license or state-issued ID, according to a 2015 study from the National Center for Transgender Equality.
Meanwhile, nearly one-third of people who had shown an ID with a name or gender that didn’t match their gender presentation were verbally harassed, denied benefits or service, asked to leave or even assaulted.
Mastercard is not the first financial institution to update its policies to accommodate transgender and non-binary consumers. In 2017, HSBC HSBC, +0.80% began allowing account holders to choose from among 10 new gender-neutral titles, in addition to the convention titles such as Mr.., Mrs. and Ms.
Shares of Mastercard are up 12.36% over the last three months. Comparatively, the Dow Jones Industrial Average DJIA, +0.28% and S&P 500 SPX, +0.58% are up 0.92% and 2.20% respectively during that time.