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CHAPTER 9: What to Do When Your Business Is Placed on the MATCH / TMF File
Well, if you do find yourself placed on MATCH, you should first prepare yourself for a long and arduous climb out of the hole, for there are no shortcuts that can be taken. What that means in practice is that you should be completely honest about your situation with the prospective processors you talk to, implement all of the changes they request, supply all of the paperwork they ask for and arm yourself with patience, lots of patience. If you do that, eventually you will manage to clean up the things that got you into this mess and start accepting credit cards again, initially through an offshore solution. And the best thing that will come out of it will be that, following the ordeal, you will be much better prepared to manage your merchant account, so that, with some luck, you won’t get yourself into the same trouble again.
How Does MATCH Work?
MATCH stands for Member Alert to Control High Risk Merchants. It is national database of merchants and their principal owners which have been terminated for cause. The file is maintained by the credit card associations and is based on information reported by their acquiring banks. The MATCH system is often referred to as the Terminated Merchant File (TMF). MATCH was developed to help acquirers identify a potentially high-risk merchant before entering into a merchant agreement and, should they choose to acquire that merchant’s transactions, whether to implement specific conditions with respect to acquiring.
When an acquirer initiates a search into the MATCH database, the system looks for possible matches between the information provided in the inquiry and the following:
- Information reported and stored during the past five years.
- Other inquiries during the past 120 days.
The acquirer who does the search can also contact the listing acquirer directly to determine whether the merchant which is being reviewed is the same one that was previously reported to MATCH, terminated, or inquired about within the past 120 days.
How to Survive MATCH
So if your merchant account has been terminated, ask your processor whether or not you have been placed on the MATCH list and if so, for what specific reason. Then start looking for service providers that specialize in high-risk and offshore payment processing and start contacting them. Keep in mind that the mainstream merchant account providers will not be able to serve you, so don’t waste your time on them. Tell the ones you do contact that you were placed on MATCH and provide the documentation they will ask for — keeping silent about the MATCH thing will do you no good at all and could be harmful, as the processor will inevitably find out at some later point and be unhappy that you kept such an important detail from them. At this point, a prospective processor should only need the reason for the MATCH placement and your six latest processing statements, to determine whether or not your business is worth their while. And yes, if your volume is low — which typically means less than $100,000 a month — you will be out of luck.
Assuming you’ve passed that first hurdle successfully, you will now be asked to fill out the application forms and supply much more paperwork. Do it all and provide any other information the processor may ask for. You may, and probably will, be asked to make certain changes in your business practices, in order to remedy the issue that caused your MATCH placement — needless to say, you should comply. At this point the underwriting process would have started and the waiting game has begun.
The underwriting process will take much longer to run its course than the one you went through when you applied for your regular merchant account and understandably so — processors need to be much more cautious with applicants who have had their accounts shut down by other service providers. You may feel that the process is taking much longer than necessary, but you will still need to be patient and wait it out — there is no alternative. From time to time you may be asked to supply a piece of paperwork or answer a question or two — do it promptly and let the processor continue its work.
Finally, if you did all that, your merchant account would be approved and set up and you can resume taking credit cards. Now, while it’s perfectly fine to feel relieved, this is no time to relax. Your account will be monitored more closely than ever before and so you will need to make sure that you are constantly in full compliance with the terms of your agreement. It is very likely that your new processor will be continually looking into at least a sample of your transactions, making sure everything is as it should be. It is also likely that you will be asked to provide invoices and other supporting transaction documentation, so make sure you have it well organized.
The Takeaway
A MATCH placement is a very big thing — a truth not nearly as universally acknowledged as it should be. Most merchants who find themselves on the list are very slow to grasp the full gravity of the situation and typically believe that the worst thing that could happen would be that they’d be forced to accept a higher discount rate — possibly much higher — but that otherwise business would continue as usual. Well, it doesn’t work like that and in reality the vast majority of the blacklisted merchants are never able to recover. However, you don’t have to be one of them and, if you follow my suggestions, you won’t be.
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