Mastercard lets transgender users choose names on their cards (if banks agree)

For transgender people, credit and debit cards that typically carry legal names they haven’t changed can “serve as a source of sensitivity, misrepresenting their true identity when shopping and going about daily life,” said Jim Issoksen, a spokesman for the Purchase, N.Y.-based company.

Mastercard’s initiative comes amid a growing push for transgender rights, with the Democratic-controlled House passing legislation earlier this year forbidding discrimination in industries including housing and credit on the basis of sexual orientation and gender identity.

How banks will react to the product and whether competitors will offer similar features remains to be seen. Lenders are heavily regulated by federal and state governments in the U.S., and names are among the data points required to open an account, verify identities, and track cash flow under laws designed to prevent money laundering and terrorism.

While some lenders allow variation between the name used to open an account and what appears on the card itself — nicknames are commonly allowed, for instance — banks usually require a government-issued photo identification, with a legal name, to make cash advances on a card.

American Express, the New York-based lender that operates its own payment network, said its customers already have the option of choosing the name they want to appear on their cards. Neither Visa nor large U.S. credit card lenders immediately responded to messages seeking comment.

Mastercard’s new product “is a bold move, and one whose time has likely come, but it’s not without risk,” said Matt Schulz, chief industry analyst at CompareCards.com, a division of Lending Tree.

“If the person’s legal name doesn’t match the name on their credit card, it could potentially cause some confusion if a merchant asks the customer for their ID,” he explained. “That doesn’t happen nearly as often as it once did, but it does happen.”

Different names might also cause problems collecting credit card rewards, popular features — especially with millennials — that offer discounts at airlines, hotels, and car-rental agencies based on card usage.

Airline rewards programs often ask users to register with their legal names so that it matches their passports and driver’s licenses, Schulz noted.

“That means that if you want to collect rewards points with your credit card and have them match with an airline loyalty account, you will likely have to have your legal name with that credit card,” he said. “It’s not entirely the same thing, but I’ve actually run in to this issue as someone who goes by my middle name rather than my first.”

Despite the potential glitches, Schulz said, “I suspect this idea is here to stay.”

Biometric programs such as fingerprints and facial recognition offer high-tech verification safeguards that render ID checks less necessary, he noted, and “if this works well for MasterCard,” rivals will probably follow suit. “Credit cards are very much a copycat business.”

Mastercard processed 90.3 billion payments worldwide last year, worth about $5.9 trillion. The company’s announcement coincided with a new street sign on Christopher Street in New York City showing support for gay rights — part of a partnership between Mastercard and the New York City Commission on Human Rights.