Merchant Account Pricing

The terminated merchant file is essentially a blacklist of merchants whose merchant account privileges have been blocked for one reason or another. If the name of the merchant or the business appears on the terminated merchant file (TMF) is can be very difficult to have the name removed, even if the listing is in error.

When a merchant applies for a new merchant account, acquiring banks are required to check with the MATCH or TMF file to see if the name of the business or the owner appears on the list for having an account closed in the past. If there is a possible match returned to a query about the status of the business, it is incumbent upon the acquiring bank to check with the listing bank to determine the circumstances of the termination.

If your name appears on the listing, that doesn’t mean you are prevented from receiving a new merchant account, just that the acquiring bank is going to probably conduct a much more thorough investigation into your business than they would have otherwise. Especially if you have been accused of fraudulent activity on a previous account, you may find it impossible to obtain a new account.

Some of the common reasons for being placed on the terminated merchant file include excessive chargebacks—probably the most common reason; a conviction for credit card fraud has been obtained against the merchant; the merchant has deposited proceeds from sales that were not authorized by the customer—usually repeatedly and in a card not present environment; the merchant is found guilty of depositing sales from another business in his merchant account, or the acquiring bank concludes that the risk of exposure from the merchant would be too great.

If the merchant believes that his name or the name of his business is on the TMF in error, he must contact the listing bank and attempt to work out the difficulties with the listing bank. The merchant can submit documentation, and theoretically the listing bank also must submit justification for the action. A designated person at MasterCard International makes the final decision as to whether the merchant will be removed from the list.

Technically, the Terminated Merchant File no longer exists, but it has been replaced by the Member Alert to Control High-risk Merchants (MATCH) file. Banks justify their use of the MATCH file by citing high risk of loss and low profit margins on providing merchant accounts for businesses and feel they are justified in refusing to serve merchants if there is a risk that the actions of the merchant will create additional bank cost or liability.

Even being listed on the MATCH list is not a definitive reason why your business might be rejected by a acquiring bank. If they are competing for your business, they may be willing to overlook some things, particularly if they are corrected. Alternatively, you may choose to use an offshore merchant account where the rules would be different. Still, it’s better to do all in your power to prevent the name of your business from appearing on the list in the first place.