Am I On A High-Risk Merchant List?

High-Risk Merchant on the Mastercard MATCH List?

Have you found yourself on the Mastercard MATCH List and have been branded a high-risk merchant? The business you have worked so hard to build is now in jeopardy, and it seems like there is nothing you can do about it. Luckily, there are many ways to win the maze of merchant law and go back to business as usual. If you are on the MATCH List and are being told you are high-risk but feel like you shouldn’t be, we can help you. Keep reading to learn more about what it means to be a high-risk merchant on the Mastercard MATCH List and how to seek early removal with the experts.

What is a High-Risk Merchant?

According to NerdWallet, a high-risk merchant account is required if a business with a greater risk of fraud or chargebacks — or with certain other characteristics — wants to accept credit card payments. When a customer pays by card, the funds are first held in a merchant account before being transferred to the business’s bank account. Payment processors often offer built-in merchant accounts; however, many payment processing companies won’t work with businesses they consider “high-risk.”

Types of High-Risk Businesses

Every company gets to choose who they work for or work with. This also includes banks and payment processing companies. Some of them may be pickier than others and establish guidelines for businesses that they feel comfortable working with. Others may feel more comfortable accepting everyone.

There are many types of businesses that are considered inherently high-risk, which can see some banks and payment processors rejecting their applications. Some of these industries include:

• Adult products or services
• Bail bonds
• Tobacco & tobacco accessories
• Dating services
• Diet and weight loss programs
• Firearms and firearms accessories
• Free trials
• Cannabis and cannabis accessories
• Mail-order transactions
• Multilevel marketing
• Some non-profits
• Digital marketing services

How High-Risk Merchants Are Different

Wondering if it’s worth trying to get off of the MATCH List? Here are some of the hardships that high-risk merchant accounts have to face as opposed to low-risk merchant accounts:

• Higher fees. Since high-risk merchants are, well, risky to work with, companies will charge a higher fee for every transaction that is processed. This eats into your bottom line and could end up costing you way more than it is worth.
• Lengthy contracts. High-risk businesses are usually required to sign up with a long contract to ensure they will be able to pay the bank. If you sign this and end up getting off the MATCH List, you could be stuck paying those high fees.
• Difficult application process. Low-risk merchants can be approved for a merchant account quickly, in a day or so. High-risk merchants will take much longer and will need to provide much more documentation.
• Cash requirements. In order to feel comfortable working with you, many companies may require that you have a certain amount of cash that they can hold onto as a hedge.

How to Get a High-Risk Merchant Account

Even though you are a high-risk merchant, that doesn’t mean you have to suffer without a merchant account. As mentioned above, it just means that you will have to deal with some extra hardships, including a lengthy and difficult application process.

If you want a high-risk merchant account, here are things to have ready:

1. Shop around. There are many payment processing companies, including many that would be willing to work with you. Don’t just jump for the first one that will accept you or is willing to meet with you. Feel free to shop around and set up multiple meetings.
2. Be prepared. Bring as much documentation as possible for your meeting, including bank statements, tax returns, and proof that you have cash in the bank.

Not a High-Risk Business and On the MATCH List?

If you are not a business that falls into any of the high-risk industry categories but you have been dropped by your processing company and have been deemed “high-risk”, it could be because you have been placed on the MATCH List.

The Mastercard Alert to Control High-risk Merchants (MATCH) allows an acquiring partner to lookup whether another acquiring partner has terminated a merchant in the past and the reason for that termination, to aid in an onboarding decision. This will provide acquirers with the opportunity to develop and review enhanced or incremental risk information before entering into a merchant agreement.

The API also provides the facility for an acquiring partner to add a merchant termination event to the system. Further, the API allows an acquiring partner to identify when other acquiring partners have inquired about a given merchant.

Once a merchant has been placed on the MATCH List, they will age off after five years. This means you will have to deal with five years worth of high fees, lengthy contracts, and much more.

MATCH List Reason Codes

1. Account Data Compromise: An occurrence that results, directly or indirectly, in the unauthorized access to or disclosure of Account data.
2. Common Point of Purchase (CPP): Account data is stolen at the Merchant and then used for fraudulent purchases at other Merchant locations.
3. Laundering: The Merchant was engaged in laundering activity. Laundering means that a Merchant presented to its Acquirer Transaction records that were not valid Transactions for sales of goods or services between that Merchant and a bona fide Cardholder.
4. Excessive Chargebacks: With respect to a Merchant reported by a Mastercard Acquirer, the number of Mastercard chargebacks in any single month exceeded 1% of the number of Mastercard sales Transactions in that month, and those chargebacks totaled USD 5,000 or more.
   1. With respect to a merchant reported by an American Express acquirer (ICA numbers 102 through 125), the merchant exceeded the chargeback thresholds of American Express, as determined by American Express.
5. Excessive Fraud: The Merchant effected fraudulent Transactions of any type (counterfeit or otherwise) meeting or exceeding the following minimum reporting Standard: the Merchant’s fraud-to-sales dollar volume ratio was 8% or greater in a calendar month, and the Merchant effected 10 or more fraudulent Transactions totaling USD 5,000 or more in that calendar month.
6. Fraud Conviction: There was a criminal fraud conviction of a principal owner or partner of the Merchant.
7. Mastercard Questionable Merchant Audit Program: The Merchant was determined to be a Questionable Merchant as per the criteria set forth in the Mastercard Questionable Merchant Audit Program (refer to section 8.4 of this manual).
8. Bankruptcy/Liquidation/Insolvency: The Merchant was unable or is likely to become unable to discharge its financial obligations.
9. Violation of Standards: With respect to a Merchant reported by a Mastercard Acquirer, the Merchant was in violation of one or more Standards that describe procedures to be employed by the Merchant in Transactions in which Cards are used, including, by way of example and not Cardholders, minimum/maximum Transaction amount restrictions, and prohibited Transactions set forth in Chapter 5 of the Mastercard Rules manual.
   1. With respect to a merchant reported by an American Express acquirer (ICA numbers 102 through 125), the merchant was in violation of one or more American Express bylaws, rules, operating regulations, and policies that set forth procedures to be employed by the merchant in transactions in which American Express cards are used.
10. Merchant Collusion: The Merchant participated in fraudulent collusive activity.
11. PCI Data Security Standard Noncompliance: The Merchant failed to comply with Payment Card Industry (PCI) Data Security Standard requirements.
12. Illegal Transactions: The Merchant was engaged in illegal Transactions.
13. Identity Theft: The Acquirer has reason to believe that the identity of the listed Merchant or its principal owner(s) was unlawfully assumed for the purpose of unlawfully entering into a Merchant Agreement.

Get Off MATCH List and Avoid Becoming a High-Risk Merchant

If you don’t want to be a high-risk merchant on the MATCH List anymore, you don’t have to wait the five-year waiting period to age off.

Legal Help for Early Removal with TFM Law

The Law Offices of Theodore Monroe focuses on litigation and counseling in the areas of payments, credit card processing, e-commerce, direct response marketing, and Federal Trade Commission enforcement.

Last year, the firm removed 100% of the people who came to us from the MATCH list.

Theodore F. Monroe, Founder of TFM Law, has successfully:

• Represented merchants recovering funds from processors
• Structured processing relationships to comply with Card Brand requirements
• Drafted and negotiated contracts involving payment facilitators and ISOs
• Represented continuity merchants in compliance and litigation issues
• Fought for numerous companies in suits brought by the Federal Trade Commission and obtained excellent results for firms in the digital products, loan modification, government grant, and nutraceuticals industries

Before opening his firm, Mr. Monroe practiced law with Crosby, Heafey, Roach & May (now Reed Smith LLP) and Lewis, D’Amato, Brisbois & Bisgaard (now Lewis, Brisbois, Bisgaard & Smith), where he defended numerous accounting and law firms in professional liability actions, and insurance carriers in bad faith actions.

Before becoming a lawyer, Mr. Monroe worked as a forensic accountant at Coopers & Lybrand, which provided him with a unique background in forensic accounting and financial analysis among litigators in Los Angeles. Mr. Monroe studied at Duke University Law School, achieved a BS with Honors in Accounting from the University of Kentucky, and is a member of the California State Bar and the Kentucky State Bar.

For more information, visit us at HowToGetOffMatch.com!