The Mastercard Alert to Control High-Risk (“MATCH”) system

The Mastercard Alert to Control High-Risk (“MATCH”) system (or “MATCH List”) is the bane of every merchant’s existence. Placement on that system can have a devastating impact on a merchant’s ability to conduct business, as it determines whether or not a merchant can accept credit cards or debit cards for the goods or services it provides. In an increasingly digital age where cash and checks have become the exception rather than the norm, the ability to accept those cards is more important than ever.

Many merchants are placed on the TMF MATCH list without knowing what the MATCH list is or how they ended up on it. As such, to avoid placement it is important to understand not only what it is, but how it works. For instance, many merchants assume that it is their payment processor who placed them. Surprisingly, this is rarely the case. Placement on the MATCH list is more likely to be by that payment processor’s sponsoring bank (otherwise known as an “Acquirer”) as Mastercard Rules specifically mandate that Acquirers must use the MATCH system when determining whether to enter into an Agreement with a merchant. When an Acquirer considers signing a merchant, MATCH helps that Acquirer to assess whether the Merchant was terminated by another Acquirer due to circumstances that could affect the decision whether to work with a merchant, and if the decision is made to “acquire”, whether to implement specific action or conditions pursuant thereto.

Mastercard makes it mandatory that all Acquirers with merchant activity use MATCH, which means both that (a) Acquirers will add information about a Merchant that is terminated while or because a circumstance exists, and (b) will use the MATCH database to inquire about merchants before contracting with them. In order to use the MATCH system an acquirer must be certified, which involves being connected to the database. Failure to become certified can result in “assessments” (fines) for non-compliance. It is entirely possible that the Acquirer will attempt to pass those fines on to the merchant.

While the mandate to use the MATCH database is strict, placement on the MATCH list is much more nebulous. The Mastercard Rules state that if either the Acquirer or the Merchant acts to terminate the acquiring relationship (such as giving notice of termination) and, at the time of that act, the Acquirer has reason to believe that a condition appropriate for MATCH list placement exists then the Acquirer must add the required information to MATCH within five calendar days of the earlier of either the decision by the acquirer to terminate the relationship, or receipt by the acquirer of a notice of termination by the merchant. Acquirers must act diligently, reasonably and in good faith to comply with MATCH system requirements.  Acquirers may not use or threaten to use MATCH as a collection tool. An Acquirer that fails to enter a Merchant into MATCH is subject to a fine and may be subject to an unfavorable ruling in a compliance case filed by a subsequent Acquirer of that Merchant, meaning a claim filed by a subsequent bank that seeks to penalize the prior bank for failure to report the merchant to MATCH.

An Acquirer must check MATCH before signing an agreement with a Merchant. An Acquirer that enters a Merchant Agreement without first submitting an inquiry to MATCH about the merchant may also be subject to an unfavorable ruling in a compliance case filed by a subsequent Acquirer of that merchant. Acquirers must also conduct inquiries under the proper Merchant ID Number (i.e., the number that is actually processing for the merchant.) If the Acquirer fails to do so, Mastercard may find the Acquirer in noncompliance and may impose a fine. Failure to comply with either the requirement of adding a terminated merchant or inquiring about a merchant may also result in noncompliance fines.

Merchant Records remain on the MATCH system for five years. Each month, MATCH automatically purges any Merchant information that has been in the database for five years. Other than that, the only way off the MATCH list is to educate the Acquirer that the addition of the merchant to the MATCH list was in error. Therefore, it is important that a merchant retain legal representation when pursuing removal from the MATCH list. Retaining an attorney should result in working with the Acquirers Legal Department, who are much more responsive then the customer service representatives that a merchant will usually have to work with. Global Legal stands ready to not only educate you as to why you’ve been “Match’d” but to assist you in removal from that list.