Receiving a high volume of chargebacks can have major repercussions for businesses. If a merchant’s chargeback ratio reaches a specific level, the merchant may be subject to monthly penalties and extra chargeback costs until the problem is resolved.
If the issue persists, the merchant’s account could be closed, and their company name would be put on the MATCH list. A merchant’s worst nightmare is being a part of the MATCH list, which is a list that indicates that you were problematic enough for your prior acquirer that they decided to cancel your account, which will make prospective acquirers apprehensive of working with you. This comprehensive guide will help you understand surviving the MATCH list in 2022 and beyond.
The best way to keep your company from being added to the MATCH list is to be aware of the things that can lead to your placement on it, the steps you can take to prevent being added, and the processing alternatives available to you if you do happen to be listed.
The MATCH List: What it is?
The MATCH list keeps tabs on businesses with questionable safety records. This list is used by financial institutions such as banks and payment processors to determine which retailers they should not conduct business with.
What we now know as MATCH was formerly known as the Terminated Merchant File, a list that was far more accurately called (TMF). It was developed by Mastercard to aid acquiring banks in spotting potentially risky merchants before committing to merchant partnerships with them.
Acquirers who work with Mastercard are obligated to check the list before accepting a new merchant, and they will almost always refuse to work with any business that appears on it.
Some payment processors may accept high-risk merchants, but only if they are willing to pay astronomical fees.
No official notification is sent out when a store is added to the MATCH list. If a company’s application for a new account is denied, that’s usually when they discover they’re on the list.
Reasons You May Be Listed
If you have a lot of chargebacks, you can get yourself on the MATCH list. However, it is more likely that your acquiring bank will add you to the list than that Mastercard will.
Your acquirer must put you on the MATCH list if your merchant account is closed due to an excessive number of chargebacks. There are increased security, illicit activities, insolvency, fraud, or noncompliance-related reasons why your name might be listed.
Several reason codes confront perfectly reasonable grounds for terminating a merchant’s relationship with a credit card processor, such as the merchant’s involvement in illegal activities like money laundering or collusion with other merchants to manipulate pricing or otherwise deceive customers.
There are also merchant reason codes for those that can’t handle the regular stream of chargebacks and fraudulent activities modern e-commerce businesses face.
Even the most honest and diligent merchants can fall victim to fraud and chargebacks, but there are techniques to combat and avoid them. The MATCH list is another piece of evidence of the importance of this battle for business owners.
Although Mastercard stipulates that every merchant whose account has been cancelled must be put on the MATCH list, the decision as to if or not to add any other merchant is left mainly up to the acquiring bank.
Mastercard does not undertake extensive control for these selections because it believes that all acquirers will act in accordance with the list’s rules if given the opportunity. Accordingly, a merchant who believes they were mistreated by their acquirer has no recourse to Mastercard.
How Being on the MATCH List Affects You
If your merchant account is canceled by your acquiring bank, it will send a strong warning signal to other financial institutions. You will be branded a high-risk merchant, and thus, many financial institutions will refuse to work with you (or will only do so with excessive fees).
The inability to accept credit card payments is far more of an issue than losing access to opening new merchant accounts. It will be difficult for businesses on the MATCH list to sign up for payment processing services, and they may potentially be banned by credit card companies. It’s easy to see why not being able to accept credit cards would be the kiss of death for many businesses nowadays.
Surviving the MATCH List
How You Can Remove Your Name From the MATCH Database
You can remove yourself from the list (reason code 12) by demonstrating compliance with PCI-DSS. If you were mistakenly added to the list for any other reason code, you are out of luck. Waiting for the required five years is the only way to get removed from the list.
Your acquirer is the place to go to argue your case if you think you were wrongly included on the MATCH list. If this happens, the acquirer may notify Mastercard that you were mistakenly added. The acquirer has no choice but to keep you on the list if the basis on why you were included is valid.
There is a possible exit from the MATCH list after five years if the issues that got you there are resolved. The same merchant might have additional entries on the MATCH list if more issues arise.
The best course of action for businesses on the list is to fix the issues that led to their inclusion as soon as possible to not put the accounts of other merchants at risk. The usage of chargeback alerts is a helpful temporary fix for businesses coping with excessive chargebacks since they can temporarily halt incoming chargebacks and allow the merchant to make a refund instead. Long-term strategies to stop chargebacks are also available.
If your business is listed and you need to open a different merchant account, you will likely be forced to work with a “risky” processor that charges exorbitant fees. The only thing you can do is hunt for the most favorable supplier and conditions you can and work to eliminate the causes of your chargebacks.
Tips for Staying Off the MATCH List
Obeying all regulations and guidelines and having low chargeback and fraud rates are the best ways for merchants to avoid getting included on the MATCH list.
Since chargebacks might end up costing you more than twice as much as the initial purchase value after fees and hidden charges are included, having a lower chargeback ratio is usually ideal. The industry standard for acceptable chargeback ratios is 0.9%.
It’s understandable that we feel terrible when a merchant is placed on the MATCH list for reason 04 (frequent chargebacks) when there is a plethora of ways to avoid this. To recover income and deter chargeback fraud, Merchants should investigate where the chargebacks come from and work to enhance customer satisfaction and company activities that may cause chargebacks and strategies to prevent them.
Merchants can avoid being placed on the MATCH list, even if they are engaged in high-risk sectors or employ business models with a high propensity for chargebacks, by employing effective chargeback management. If it sounds unattainable, you should talk to a chargeback management business about what your choices are.
