Credit card processing companies use a terminated merchant file (TMF) to check out potential merchants before giving them a merchant account. It is called the MATCH list for Mastercard and American Express. The terminated merchant files are blacklists shared among processors.
Merchants with high-risk accounts or many chargebacks are on the list and can’t use different credit card processors to open a merchant services account. You can also be put on a file of terminated merchants for the following reasons: Money laundering, conspiracy, and fraud by merchants.
The Usefulness of Terminated Merchant File
Mastercard made this list and kept it up to date. It is now called the MATCH List, which stands for “Member Alert to Control High-Risk Merchants.” Same idea, but a different name.
This list is meant to help banks figure out which merchants are high-risk before they agree to give them acquiring services. Before taking on a new merchant, processor, and acquirer in the Mastercard network, check the list. The merchant’s application will usually be turned down if they are on the list.
If you are on the TMF match list, finding processors willing to work with you may be hard. Some payment processors are willing to work with high-risk merchants. But these companies usually make up for the risk by charging more and having stricter rules.
Sometimes you probably won’t even know you’re being added to the TMF before it happens. Most merchants find out they are on the list when their payments suddenly stop going through or when they try to open a new account and get turned down.
Does Being On The MATCH List Impact Anything?
If your merchant account is closed by your acquiring bank, it will send a strong warning signal to other lenders and credit bureaus. Soon, you’ll be labeled a high-risk merchant, and fewer and fewer companies will want to do business with you (or will only do so with exorbitant fees).
Depending on the acquiring bank’s risk assessment and the specifics of why you were placed on the Terminated Merchant list, you may be given another chance.
Due to fines or access, processing credit card payments might be especially difficult if your business is included on the Terminated Merchant list. As you may imagine, not being able to accept credit cards is a major setback for any business.
Does Being A Match List Merchant Spell Doom For You?
While being placed on the MATCH list is certainly not ideal, it is hardly the end of the world. There is a wide variety of potential causes for inclusion on the list. You may be able to get off the MATCH list early depending on the circumstances surrounding your placement on the list, but in most cases, you will need to wait five years and reach retirement age before being removed.
If, for example, the acquiring bank made a mistake that landed your name on the list, you should be able to remove it immediately. If frequent chargebacks are to blame, you may have to remain on the blacklist, but a high-risk processor may grant you a merchant account anyway. But you’re out of luck if you were blacklisted because of a bankruptcy or criminal record.
Search For A High-Risk Expert
When a company is having trouble getting a merchant account, it might become a high-risk payment processor. However, even for high-risk processors, MATCH-listed merchants might be challenging to the position.
There are costs and benefits to working with a high-risk expert. You can keep accepting credit card payments without any interruptions. Services provided by high-risk specialists are on par with those provided by low-risk processors. You can offer goods and services typically not accepted by low-risk processors.
Match Retailers Should Consider Strictly Cash Transactions
Cash transactions are free of transaction fees and cannot be blocked by any governing body, although they present security risks and mitigating strategies. This, of course, is only a viable option for businesses whose customers can physically visit their stores. Make sure you know your clientele well before switching to cash or a cash discount program. Cash is less common than ever these days.
When you follow standard operating procedures, you reduce the likelihood of being included in the MATCH list. As a business owner, your focus should be on the things you can control, such as following the rules and regulations and protecting your customers’ personal information against fraud and theft.
It would help if you did everything in your power to minimize chargebacks. Many people consider a chargeback rate of 1% the absolute maximum acceptable, yet, each chargeback could cost you more than twice the original amount. A lower chargeback rate is typically preferred when considering all fees and other charges related to the transaction.
People are disheartened whenever a business is added to the MATCH list due to high chargebacks. Profits can be recouped, and chargeback fraud can be avoided if merchants familiarize themselves with the factors that lead to chargebacks, improve customer service, and adopt other strategies.