Page 36 - GS171201

Education

MATCH list update: Any of these occurrences can rapidly thrust merchants
that were previously considered good and manageable-
Are your merchants risk revenue producers into reclassification as excessively
high-risk, untouchable merchants suitable only for account
termination and possible MATCH listing. This causes
sitting ducks? unnecessary loss and is preventable or correctible.

Why is a MATCH listing still a serious problem?

After more than 23 years as a payments attorney, I can say
that several things have changed very little. A terminated
merchant listed on the MATCH system is enough to create
great concern at even the largest merchant acquirers.
Many acquirers perceive terminated merchants listed on
MATCH as untouchable high-risk accounts that will taint
their merchant portfolios, lead to potential economic loss
and brand damage. It is highly unlikely merchants listed
on MATCH will be able to obtain new merchant accounts,
so all associated residuals will be lost.
Once your merchants are terminated and listed on
MATCH, options for writing a new merchant account
range from scarce, to ridiculously expensive, to outright
scam options that avoid fully settling merchant sales funds
By Anthony Ogden to avoid paying agent residuals. It may still be possible for
BankCardLaw.com a merchant to get an account while MATCH listed. But U.S.
acquirers will be extremely few, and foreign or offshore
hanksgiving has come and gone. Turkeys are acquirers must be vetted with extreme caution.
much safer now. However, with peak Christmas
shopping in full swing, are your merchants Are perceptions about MATCH-listed
T sitting ducks? ISOs and merchant level sales- merchants accurate?
people (MLSs) compete intensely to onboard and retain The answer is both yes and no. Many (but not all)
merchants in their acquiring portfolios. Unfortunately,
the best sales efforts of ISOs and MLSs sometimes result merchants listed on MATCH present the associated and
significant risks of loss. Terminated merchants who acted
in merchants being declined or terminated due to a listing
on the MATCH (Mastercard Alert to Control High-Risk in a fraudulent, unlawful or criminal manner must be
listed on MATCH, brought to justice and taken out of
Merchants) system, which was previously known as the
Terminated Merchant File. commission. Moreover, terminated merchants in clear
violation of card brand rules should likewise be placed on
MATCH. The integrity of the electronic payments system
If merchants are declined or terminated and listed on depends on it.
MATCH erroneously, an important source of acquiring
revenue is needlessly lost. Are your merchants vulnerable? However, the last 23 years have proven to me that there
Probably more than you realize. Is there anything you can
do to prevent or reverse the loss of merchants to MATCH are a significant number of merchants who were placed
on MATCH in error. Erroneous MATCH listings occur
listing? Yes, but it depends on the circumstances.
when well-intentioned acquirers attempt to maintain
Reasons for MATCH listing increase compliance in an electronic payments market with
confusing and constantly changing card brand rules and
Merchant acquiring viewed in a present-day context tells governmental regulatory regimes (examples such as the
the story. When regulatory winds of change blow within now-defunct Operation Choke Point and a few Federal
the payments ecosystem, acquirers and card brands Trade Commission cases should come to mind).
swiftly re-evaluate their merchant risk. When deceptive
or criminal enterprises abuse a merchant category and Surprisingly, in many instances, there are terminated
generate negative news headlines, the entire merchant and MATCH-listed merchants who have not violated
category is viewed with suspicion. When merchants any laws, regulations or card brand rules despite initial
operate in an area for which regulation becomes unclear, appearances. This occurs far more often than one might
unsettled or confusing, acquirers and card brands re- think. When it does, everyone needlessly loses valuable
examine their merchant risk. When acquirer mergers, merchant revenue and residuals.
acquisitions and merchant portfolio sales occur, acquirers
re-examine their merchant risk.

36