Merchant Compliance

Since January 2010 Visa and MasterCard have begun rigorously enforcing current and new rules and regulations for processing compliancy related to e-commerce marketing. Being compliant with Visa, MasterCard and Government rules and regulations is the first step to a long, safe processing relationship.

Industry Compliancy

There are 2 levels of compliancy that merchants need to be aware of and conform to:

1. PCI DSS Compliancy deals with the processing and storage of credit card data. See our Resources section for links to companies that that can help you with PCI compliancy (we do not assist in PCI DSS compliancy).
2. Processing Compliancy deals with adhering to Visa, MasterCard and FTC rules. These rules range from the type of product you market, to the way the information is marketed to the consumer.

Why do Processors set the criteria for Merchants to be compliant?
Processors accept risk on behalf of the Merchants they sponsor. A processing account is the same as an unsecured line of credit. While a merchant is responsible for all transactions, fees and fines related to their processing account, if for some reason they cannot cover any monies owed, their Processor is next in line to cover any costs.

Assessing Compliancy

Merchants who want a long and safe processing relationship must become, and stay, compliant with criteria set by their Processor. Processors protect themselves from Merchants who are not, or will not, become compliant using a number of different methods.

• Terminated Merchant File (TMF) - The first thing that generally occurs is the closure, or denying, of their processing account. In some cases the merchant may be added to the Terminated Merchant File (TMF), or Match file, if the merchant has egregiously broken their merchant agreement.
• Merchant Fines - Recent fines issued by various Processors have shown that not knowing about specific compliancy standards does not reduce or waive the fines being assessed.
• Denied of Future Merchant Accounts - For most merchants losing or being denied a processing account is the most severe consequence of not being compliant.

Most merchants who are not compliant are either unaware of various rules and regulations, or they do not understand how certain rules apply to them. As with all rules and regulations for payment processing, the responsibility lies with the Merchant to make sure that they are compliant.