When a merchant is placed on the MATCH list, it indicates that they pose an above-average threat to acquirers. Essentially, the MATCH list functions as a warning system for financial institutions against false merchant account information.
Merchants who end up on the MATCH list face greater challenges when attempting to open a new account. In fact, they may be unable to secure payment processing at all. This seems like a harsh premise, but the list serves an important function in the payments space.
To weigh the benefits of the MATCH list, it’s important that we understand the reasons why a merchant might end up there, and how they can be removed.
Defining the Terms
MATCH is an acronym for “Member Alert to Control High Risk Merchants.” This file is an electronic list of businesses that have had one or more merchant accounts terminated by their acquiring bank.
The ability to add merchants to the MATCH List is a useful process for banks to have at hand. It alerts financial institutions about merchants that have cancelled accounts on their record, and who are consequently designated as “high-risk” merchants.
MasterCard initially developed the MATCH list to keep track of risky merchants. An earlier iteration of the MATCH list was called the Terminated Merchant File (TMF). While not exactly the same, the two terms are often used interchangeably due to the similar core concepts.
The MATCH list is considered industry standard. It has given acquiring banks the ability to screen applicants and prevent merchants from hiding any cancelled accounts. This way, banks can more effectively gauge the level of risk a merchant poses before offering their services.
Why do Merchants Get Added to the List?
A number of conditions govern when and how a merchant may be placed on the MATCH list. Most are added by the acquiring bank that works with the merchant. However, Mastercard can also play a role in the process.
Since the MATCH List’s conception, Mastercard has become stricter with their policies and closed the gap for acceptable mistakes. Today, merchants can only be MATCHed for specific reasons, which are categorized based on specific reason codes. These may include anything from insufficient security measures, to the merchant engaging in illegal activities. Some common reasons include:
- Account data compromise
- The merchant engaged in money laundering
- The merchant fits the criteria for the Mastercard Questionable Merchant Audit Program
- PCI-DSS noncompliance
Overall, though, the most common reason why a merchant would be MATCHed is for excessive chargebacks. Those businesses that exceed acceptable chargeback thresholds (as established by the card network) will have to deal with the consequence of being added to the MATCH list.
Mastercard’s Security Rules and Procedures states that if the acquirer terminates a merchant based off one of these reasons, the bank must then add the merchant to the MATCH list within five days of termination.
Banks ought to be aware of merchants placed on the MATCH list. That said, it’s also important to remember that some reasons may be beyond a merchant’s control, such as their identity being stolen and used for a fraudulent account.
Can Merchants be Removed from the List?
The MATCH list provides comprehensive data from the previous five years, and is a powerful tool in the hands of financial institutions. A terminated merchant may be unable to secure services from any other acquirer. This begs the question: how can merchants be un-MATCHed?
It’s not unheard of for merchants to be added to the MATCH List by mistake. If this happens, the acquirer can contact Mastercard on the merchant’s behalf and report the original claim was made in error. Also, if they were initially added to the MATCH list under reason code 12 (PCI-DSS Noncompliance), they can be removed from the list by simply becoming PCI-DSS compliant.
The only other way to be removed from the list is to wait out the five-year MATCH List term period. After five years, the merchant’s data is erased from the MATCH List (assuming no further penalties accrue).
We should also note that the merchant is not barred from ever obtaining a merchant account. The acquirer has the opportunity to weigh the risks and decide whether or not to proceed with granting an account. It’s usually a difficult process for merchants, and they typically have to apply to several acquirers before being accepted. They might face other challenges too, such as a higher processing fee, a long-term contract, penalties for early termination, and a mandatory reserve account.
While those conditions make it possible, it’s still a stressful situation for merchants. Banks and financial institutions should be open to providing assistance, especially in cases where an error was made.
The Final Verdict
Getting added to the MATCH list can cause significant disruption to a merchant’s business and reputation. One of the only surefire ways for merchants to ensure they don’t end up on the list is to keep chargeback issuances low, so as to avoid breaching the network’s chargeback thresholds.
While a great tool for financial institutions, the MATCH list isn’t without faults. The bottom line is that merchants and banks need to work together and do their part to prevent fraud from happening in the first place.