Learning About the Terminated Merchant File (TMF) aka MATCH List
Chances are, you’re reading this article because you’ve just found out that you’ve been added to the Terminated Merchant File (TMF) or MATCH list. And now you’re scrambling to figure out what this “list” or “file” actually is, and how you can get yourself off of it. Am I right?
Well, don’t feel too bad, because you’re not the only merchant who’s been caught off guard. The truth is that most merchants don’t know that they are TMF’d or MATCH’d until they submit an application for a new account elsewhere and find that they are declined. At which point, the reason for the decline is revealed to them.
I hope that in this case, I’m catching you before you’ve been placed on the MATCH list, but if not, I’ll do my best to help you out anyway.
You might have already noticed that this infamous “list” goes by a couple names:
- Terminated Merchant File (TMF), and…
- MATCH (Member Alert to Control High-Risk).
Until recently, “Terminated Merchant File (TMF)” was the default term used by everyone, but lately it has been replaced by “MATCH.” So, for the sake of this article, we’re also going to refer to it as MATCH, but just remember that they both pretty much mean the same thing. I also want to clarify that I’ll be using the words “list” and “file” interchangeably as well.
Table of Contents
What is MATCH?
MATCH is a system created and managed by MasterCard. It is essentially a database that houses information about businesses (and their owners) whose credit card processing privileges have been terminated for reasons which I’ll discuss later.
It is used by acquiring banks (aka merchant processing banks) to screen potential applicants to see if that applicant has been terminated in the past. Acquiring banks also have the ability to add or remove merchants to or from the MATCH database, given they have justification.
In a nutshell, the MATCH file is like a “blacklist” that banks can cross-check when they take on new business. That way, they won’t get stuck with any bad apples.
The biggest downside to the MATCH system is that MasterCard does not verify or confirm the accuracy of the information reported to or listed in the MATCH database by the acquiring bank. Per this warning in section 11.1 of MasterCard’s Security Rules and Procedures.
MasterCard does not verify, otherwise confirm, or ask for confirmation of either the basis for or accuracy of any information that is reported to or listed in MATCH. It is possible that information has been wrongfully reported or inaccurately reported. It is also possible that facts and circumstances giving rise to a MATCH report may be subject to interpretation and dispute.
As you can see, that gives the acquirer full discretion in deciding whom to add to the list. It’s a system without any checks and balances, which is a bit dangerous if you ask me.
What Happens When You’re MATCH’d?
When a merchant is placed on the MATCH list, the business name, principal, and any business partners are all recorded on file and basically blackballed (for the most part) from opening any new merchant accounts elsewhere. Once on the MATCH, it is extremely difficult to obtain a new merchant account by any other bank.
Since merchant processing is a business with a high risk of loss to the banks, MATCH is used by the banks to see if the risk of opening an account is less than a bank’s risk tolerance.
If an acquiring bank finds that a merchant applicant is in the MATCH system, they are allowed to contact the prior bank who placed that merchant on the list and ask why that particular account was shut down. From there they can make a decision to accept the application, decline the application, or provide a conditional acceptance based on certain restrictions to prevent a similar type of scenario.
Why Do Merchants Get MATCH’d?
The reasons for being added to the MATCH database can vary. Having too many chargebacks, participating in fraudulent activity, or money laundering are all activities that can get you listed.
In the past, MasterCard made it really easy for acquiring banks to add merchant’s to the list, but in recent years, they’ve become more strict with their guidelines.
Here’s a quick table I pulled from the MasterCard website (see table 11.3). The numbers before each category are “reason codes,” so if somehow you only have a reason code, you can look for it in the table to find out what it means.
|01||Account Data Compromise|
The Merchant unknowingly or unintentionally facilitated, by any means, the unauthorized disclosure or use of account information.
|02||Common Point of Purchase (CPP)|
The Merchant knowingly caused or facilitated, by any means, the unauthorized disclosure or use of account information.
The Merchant was engaged in laundering activity. Laundering means that a Merchant presented to its Acquirer Transaction records that were not valid Transactions for sales of goods or services between that Merchant and a bona fide Cardholder.
With respect to a Merchant reported by a MasterCard Acquirer, the Merchant’s chargebacks in any single month exceeded 1% of its MasterCard sales Transactions in that month, and those chargebacks totaled USD 5,000 or more. With respect to a merchant reported by an American Express acquirer (ICA numbers 102 through 125), the merchant exceeded the chargeback thresholds of American Express, as determined by American Express.
The Merchant effected fraudulent Transactions of any type (counterfeit or otherwise) meeting or exceeding the following minimum reporting Standard: the Merchant’s fraud-to-sales dollar volume ratio was 8% or greater in a calendar month, and the Merchant effected 10 or more fraudulent Transactions totaling USD 5,000 or more in that calendar month.
There was a criminal fraud conviction of a principal owner or partner of the Merchant.
The Merchant was unable or is likely to become unable to discharge its financial obligations.
|10||Violation of Standards|
With respect to a Merchant reported by a MasterCard Acquirer, the Merchant was in violation of one or more Standards that describe procedures to be employed by the Merchant in Transactions in which Cards are used, including, by way of example and not limitation, the Standards for honoring all Cards, displaying the Marks, charges to Cardholders, minimum/maximum Transaction amount restrictions, and prohibited Transactions set forth in Chapter 5 of the MasterCard Rules manual. With respect to a merchant reported by an American Express acquirer (ICA numbers 102 through 125), the merchant was in violation of one or more American Express bylaws, rules, operating regulations, and policies that set forth procedures to be employed by the merchant in transactions in which American Express cards are used.
The Merchant participated in fraudulent collusive activity.
|12||PCI Data Security Standard Noncompliance|
The Merchant failed to comply with Payment Card Industry (PCI) Data Security Standard requirements.
The Merchant was engaged in illegal Transactions.
The Acquirer has determined that the identity of the listed Merchant or its principal owner(s) was unlawfully assumed for the purpose of unlawfully entering into a Merchant Agreement.
How Long Are You On the List?
According to this MasterCard PDF (see section 11.2.6), you’ll remain in the system for 5-years.
How Do You Get Off the List?
Lets say somehow you’ve ended up terminated and on the list. So now what? Well, the only way to get off MATCH is through the same bank that put you on it in the first place. Once you discover you are listed, the first step is to call your former provider.
You’re most likely going to have to jump through hoops, sitting patiently through many phone transfers, until you get to the right person, or get forwarded to the processing bank themselves. But, once you find the correct contact, you can then find out the explanation and reason code for why you are on the file, and ask what you need to do to get off.
Depending on why you’re on the file, getting off can be easy or impossible. It is nearly impossible to get off the file for being identified of fraudulent activity. Banks obviously hate fraud.
Often a termination resulting from too many chargebacks can be corrected with time. Banks will wait until all chargebacks have been rectified and there are no further chargebacks from the merchant’s former customers, before removing a merchant off the list.
If you believe you were erroneously added to the file, you must work with the bank that added your listing in order to get your business name removed or file details changed. Once investigated, if the acquirer agrees that you were listed in error, they must immediately request a correction.
If you’ve tried all the phone calls and spoken to every representative, your last option may be to seek legal counsel and head into a possible arbitration.
Can You Still Get a Merchant Account?
Believe it or not, there are some processing banks that will approve your account even if you’re in the MATCH system. Obviously, the reason has to be within reason (pun intended).
I know personally that Durango Merchant Services is willing to accept some TMF/MATCH merchants, so you might want to give them a try, but there are some guidelines that Durango requires you follow. Here’s what I was told by a rep from Durango:
The merchant will be required to show that the they do not owe any funds to the prior processor, ideally they have recent and clean processing history since the MATCH event, and they have a good explanation for what happened and what they have done to fix the problem that caused the TMF listing.
The Bottom Line
Avoid getting placed on the list at all cost! Being an honest and scrupulous merchant is the only way to be a functioning merchant. Once on the list, do whatever your previous bank says in order to get taken off. Remember, being MATCH’d not only stops your current credit card processing operations, but prevents you from doing any future operations under any other business names. It can quite possibly be the end of the road for your processing career, so be sure to take it seriously.