As businesses continue to go digital and customers expect the convenience of shopping and paying online, it would be a catastrophic mistake if your business didn’t offer these options. Practically any modern business needs to accept popular credit card brands, such as Mastercard, to keep customers happy and complete as many sales as possible. However, before they can do this, business owners need to acquire a merchant account through an independent sales organization (ISO) or directly from an acquiring bank.
Merchants need payment processors to accept credit cards or debit cards. They’ll need to work well together with an acquirer or an ISO, so their automatic clearing house (ACH) will approve customer purchases. While going to a local bank to set up a merchant account may be the best thing for your business, it’s important to consider the advantage of customer service that an ISO brings to the table. They can communicate directly with customers and your acquiring bank for you, which is great for those new to these processes. You’ll want to do the main thing after partnering with a credit card processor to avoid the TMF (also known as the MATCH list).
What does TMF entail?
The Terminated Merchant File (TMF), otherwise called the Merchant Alert to Control High-Risk list, is a list created and managed by Mastercard that shows merchants whose accounts have been terminated in the past five years. The TMF list is used to protect banks by advising against sponsoring a merchant likely to cause losses. Being placed on the MATCH list by itself won’t necessarily put an end to any merchant accounts you’re currently using. Still, it will prevent you from creating any new merchant accounts or entering into agreements with payment processors until the issue is resolved. You can do some things to avoid the list and what to do if you do find yourself on the MATCH file.
Keep your business above board.
This is probably the easiest tip to follow, but you must refrain from fraudulent transactions or other illegal activities. Excessive fraud and other legal convictions are excellent reason codes for the termination of a merchant account. While you’ll likely refrain from intentional illegal activity in the first place, it’s also a great idea to make sure all of your paperwork is in order and that you’re following all rules and regulations.
For example, if you’re a softgel manufacturer, you’ll want to make sure all of your custom formulations are labeled properly by FDA guidelines. The supplement market is booming, and it would be a shame to miss out on selling high-quality dietary supplements because of a basic slip-up leading to issues with your financial institution.
Reduce chargeback rates.
Excessive chargebacks are the most common reason for a business to be labeled as a high-risk merchant. Put simply; a chargeback occurs when a customer successfully disputes a credit card charge on their account. The acquiring bank will be responsible for repaying the money, and for this reason, most will require merchants to keep a rolling reserve account to cover these chargebacks. While the occasional dispute is unavoidable, high rates of chargebacks can spell disaster for a merchant and their bank.
To keep these incidents to a minimum, it’s important to ensure your online shop is secure to prevent fraud, offer exceptional customer service to avoid frustration, and keep clear records of all transactions. It’s also a good idea to investigate chargebacks that do occur to ensure they’re happening for valid reasons and not due to errors.
Fight to get off the list.
If you find yourself on the MATCH list, you’ll have a couple of options to get removed unless you’ve been convicted of fraudulent activity. In that case, you’ll likely have to wait out your time on the list, which essentially means ruin for your business. Assuming your activities have all been legal, you may be able to work out an agreement with the acquiring bank to prove that you’ve addressed the issues they had.
Otherwise, legal assistance is your best course of action, especially if you believe that you’ve been placed on the MATCH list unfairly. Electronic payments litigation experts can help you prepare the right documents to appeal your placement on the list and protect your rights as a business owner.
