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MATCH Myths

By David H. Press

Acquirers and processors occasionally terminate contracts with certain merchants. These merchants-and their principals-end up on the Member Alert to Control High-Risk Merchants (MATCH) list. Some people still refer to this list by its former names, the Terminated Merchant File (TMF) or the Combined Terminated Merchant File (CTMF).

Today, MATCH is a program maintained by MasterCard International and used by Visa USA (and, as of recently, by American Express), to identify merchants that acquirers have terminated for specified reasons. Since risk assessment includes both a merchant's corporate identity and the identity of the business owners, MATCH stores and reports on possible matches for up to five principals.

Many ISOs/MLSs have the wrong idea of what a MATCH designation means. Many also don't know how to properly respond to a "Possible MATCH" response to submitted merchant applications.

Common MATCH Myths

MATCH Myth: Once a merchant is placed on the MATCH, it is blacklisted and can never get another processor.

MATCH Fact: The MATCH is set up to identify merchants and principals that have been terminated for specific reasons. The card association rules do not prohibit signing up merchants or principals on the MATCH list.

However, acquirers must query the MATCH before entering into agreements with prospective merchants. If the response indicates a Possible MATCH the acquirer must verify that the merchant identified in the response is the same merchant for which the inquiry was generated and contact the listing member directly to determine why the merchant was added to the file.

Instances of common last names and addresses in large buildings can generate many Possible MATCH listings from around the world, which may or may not be for the same merchant or principal. The acquirer should make its acceptance decision based on further investigation and use the MATCH data only as an informational tool in the decision-making process.

Acquirers are required to contact listing members to determine why they added merchants to the MATCH. Usually, acquirers will want to know why the processor placed the merchant on the MATCH and whether the center suffered a loss.

The prior processor should tell the inquiring member why the merchant was terminated. Merchants will often be placed on the MATCH for violating terms of their agreements or for a few chargebacks for which the processor did not suffer a loss; processors will often admit they may have acted "too hastily" or that the merchant was really not "that bad."

MATCH Myth: Merchants must be removed from the MATCH before they can work with another processor.

MATCH Fact: Acquirers should make acceptance decisions based on further investigation and use the MATCH data only as a tool to help them make their decisions. There is no MATCH regulation stating that acquirers not process for merchants on the MATCH, once they have determined they will not be a risk.

This is done through a thorough review of all the facts available. Many ISOs don't bother to contact prior processors, as is required, to insist that the merchant be removed from the MATCH.

In several instances in the past, Integrity Bankcard Consultants requested that ISOs delete our merchant clients from the MATCH; as it turned out, the same ISOs ended up accepting them. These scenarios could have been avoided if the ISOs had made the same decisions based on information about the merchants from the prior processors.

MATCH Myth: The new acquirer/member will be responsible for all losses incurred by the prior processor if it signs up a merchant on the MATCH.

MATCH Fact: Members failing to comply with the MATCH listing requirements (specified below) may be subject to compliance, including liability for losses incurred by another member as a result of the failure to add a merchant to the MATCH. Members who subsequently provide processing services are not liable for the losses incurred by the listing member.

MATCH Listing Requirements

Acquirers must add terminated merchants to the MATCH file as soon as possible, but this can happen no later than close of business on the day following the date the acquirer notified a merchant that it intended to terminate the agreement.

Acquirers must list merchants if they are terminated for one or more of the following reasons:

  • Credit or debit card fraud conviction
  • Excessive deposits for counterfeit transactions
  • Excessive deposits for transactions unauthorized by cardholders
  • Deposits for transactions representing sales of goods or services generated by another merchant (laundering or factoring)
  • Excessive chargebacks due to a merchant's business practices or procedures
  • Visa USA or MasterCard International suspects the merchant of conducting fraudulent activity
  • Visa USA disqualified the merchant from participating in the Visa Program
  • The acquirer identified the merchant as having excessive fraudulent activity following an internal audit or investigation
  • The acquirer determines that serious violations of the merchant agreement may result in increased loss exposure to the member or membership

On the flip side, there are situations we have come across where merchants are on the MATCH who never should have been placed there. Some ISOs mistakenly place merchants on the MATCH for refusal to pay termination fees as outlined in the merchant agreement.

In other worst case scenarios, some ISOs have even used it as a tool to prevent a merchant from going to another processor.

The acquirer-member that added the merchant to the MATCH is the only party that can request deletion of the merchant's name or information. A member that incorrectly adds a merchant to the file must request correction of the file immediately upon recognition of an error.

This often happens when merchants are terminated and placed on the MATCH pursuant to the time frames outlined above, and it's later determined that the merchant's account will be re-opened and it will be allowed to continue to process transactions.

David H. Press is Principal and President of Integrity Bankcard Consultants, Inc. Phone him at 630-637-4010, e-mail dhp@integritybankcard.net or visit www.integritybankcard.net.

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