What is the MATCH / TMF File?
What is the MATCH / TMF File?
When consumers do not honor the terms of their credit agreements, the creditor may report the default to a credit reporting agency. If the consumer applies for additional credit, the new creditor obtains a credit report and learns about the consumer’s previous history. The merchant processing banks (also known as “acquiring” banks) do not have a similar credit-reporting agency available that can report information about the way that a business handles its merchant processing responsibilities. The card associations, instead, use a file known as “MATCH.” The MATCH File is a database file, previously and most commonly known as the Terminated Merchant File “TMF.” This file is used by MasterCard and Visa processing banks, known as “acquiring banks,” to identify specific merchants and principals who have already been terminated. Once a merchant is on this list it is highly unlikely that future merchant account applications will be approved. The “TMF”, or MATCH list, is essentially a BLACKLIST from which it is almost impossible to be removed.
How exactly is the MATCH file used when I apply for a Merchant Account?
Your new merchant acquiring bank must query the MATCH file to determine whether your company, or its principals, has been terminated. If your new acquirer receives a response indicating a “possible match” against a merchant or individual listed on the file, the acquirer must double check and make certain the listed merchant or individual is truly the same as the one for which the inquiry was generated. If so, the acquirer must contact the listing bank to determine why the business or individual was added to the file.
If a previous acquirer listed your business or your name, that does not mean you are prohibited from obtaining merchant processing privileges in the future. The new acquirer is to base its approval decision on complete investigation and to use the MATCH file as an informational tool in the decision making process. Some acquirers will issue an approval conditioned upon having the listing removed by the prior processor while others will review the circumstances surrounding the listing and make an informed decision.
What if my Merchant Account is terminated?
It is very important to read your merchant processing agreement and understand the circumstances under which your processing privileges may be terminated; in some instances immediately. When your acquirer notifies you of intent to terminate your account, the acquirer is required to list your business and principal names on the terminated “MATCH” file. There are eight instances in which that listing is required on the same day as the notification:
* The merchant has been convicted of credit card fraud
* The merchant deposited sales that were not authorized by cardholders; most typically in a card not present environment with reoccurring charges.
* The merchant deposited transaction that were for sales generated by another business (known as laundering.) Oftentimes, this seems like an innocent practice of one business owner helping another; it is a violation of Visa and MasterCard rules.
* The acquirer has received an excessive number of cardholder chargebacks due to the merchant’s practices. This is by far the most common reason for termination.
* As a result of an audit or investigation, the acquirer identifies the merchant as having excessive fraudulent activity.
* The acquirer concludes that serious violations of the merchant agreement could result in increased loss exposure to itself or the credit card community.
* The merchant deposited an excessive number of counterfeit sales.
* The acquirer learns from Visa USA or MasterCard International that the merchant has been identified as having excessive fraudulent activity.
The acquirer listing will include the business name as well as the name and identification of the business principals. If the termination was for reasons other than the eight listed above, the acquirer has until the next day to add the merchant and principal to the listing.
Is there a way to get out of the MATCH list?
If you believe your business or name has been erroneously added to the MATCH file, you must work with the acquirer that added the listing to the file. Only that acquirer is authorized to request a change or deletion of the information. If your counsel is unfamiliar with the credit card industry or Visa and MasterCard associations, you may want to consider consulting with a firm specializing in this issue.
If the listing acquirer recognizes that the listing was in error, that acquirer must request the file correction immediately upon recognition of the error. Obvious examples would include the wrong business and principal names but could also include termination for reasons that would not warrant a public listing (e.g.. inactivity, etc.) An error does not include an unresolved dispute over the definition of “excessive chargebacks” and other violations.
To request a change or deletion, the listing bank submits its request to MasterCard International, in Purchase New York. The designated individual at MasterCard will review the merchant’s explanation and listing bank’s justification for change or removal from the listing. MasterCard International reserves the right to deny the request. The listing bank must sincerely explain its reason for the deletion.
The process with which one gets on the MATCH list does not sound fair, is it?
The acquiring bank that adds or removes a merchant or individual from the MATCH file must take care to do so in a responsible manner. A knee jerk addition of a merchant or individual to the listing can result in unwarranted business difficulty to the listed business and owner. (It can be similar to a creditor reporting wrong information about your credit history) Likewise, failure to list a “problem merchant” means the acquirer is not living up to the responsibilities to forewarn its fellow Visa and MasterCard members.
The decision to list, not to list and whether to remove is to be taken very seriously by the acquirer. In fact, a Visa member who fails to comply with listing requirements could be held liable for the losses incurred by another acquiring bank for failure to list. On the other hand, Visa requires the acquirer to indemnify Visa for all claims resulting from its erroneous addition to, or deletion from or failure to remove from the MATCH listing when required.
Do you have any advice for me to avoid getting on the MATCH list?
It is an understatement to conclude that the listing of your business or name in MATCH file is a very serious matter. The card associations hold the acquiring bank accountable for the processing activity flowing through your merchant processing account. Once chargeback levels increase and/or suspicious activity occurs, it is critical for business owners to resolve the matter at once. With delays and at some point, the acquiring bank runs out of options and is required to terminate and list the merchant and individual.
We have always found that correcting the cause of consumer disputes, chargebacks and suspicious activity is a less expensive and more permanent choice. Every merchant, once facing the difficulty of being “listed”, wishes he had been as forceful in correcting the practices as he was in resisting the credit card rules. Termination and listing can cost you your business.
Here are some additional guidelines:
* Do not go over your officially authorized maximum ticket without permission from your Merchant Processor. Likewise, do not exceed your authorized monthly maximum sales without advaced permission from your Merchant Processor (acquirer).
* Provide your customers with timely and accurate debit information. Be sure that it is easy for them to reach you with any of their questions, concerns or complaints.
* Make sure you have a Customer Support phone number appearing on your customers’ monthly statements. If they don’t recognize your debit they should call you FIRST before they mistakenly deny the charge. This can head off unnecessary chargebacks to your account and help keep your account out of trouble.
* Stay in touch with your customers using any means available. Send E-mail, make phone calls, send newsletters. The more they know you the better they will feel about you and your business. Provide GREAT customers service. Give them service equal to or better than the service that YOU would like to receive yourself.
* Be friendly and courteous in all regards. Always put the customer first. Show them how they may save money or save time. Make good suggestions as though you were a member of their family.
* Don’t be short-sighted. Consider your business a long-term enterprise. Make your long term goals more important than quick short term profits that will benefit you more than your customer.
* Lastly, if you’re seriously looking for a really fine and low cost Merchant Account Vendor be sure to visit Echo-inc.Com, we are one of their authorized affiliates. Echo-inc.Com is a major Internet provider of truly low cost merchant credit card accounts, perhaps the best and lowest cost provider in a category overflowing with competitors.
Comply with the rules so that your business can continue to grow and prosper!
James Barrinkeris a High Risk Merchant Services expert and writes for Credit Card Processing Services and Payment Processing web sites.
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