Mastercard Payment Facilitator Rules
Mastercard sets its own rules for payment facilitators and the acquirers behind them. Here is what its manual requires, and what it means for your business.
A payment facilitator signs up merchants under its own deal with an acquirer. Mastercard has its own rules for that setup. Most of them bind the acquirer above it. Are you a merchant thinking of the PayFac route? Then it helps to know what Mastercard asks for on its side.
What a Mastercard payment facilitator is
A payment facilitator brings merchants on board under an acquirer.
Mastercard calls the merchants a PayFac brings on Sponsored Merchants.
How Mastercard treats sponsored merchants
A Sponsored Merchant takes cards under a PayFac.
Say Mastercard opens a case that touches a Sponsored Merchant. Its manual says the acquirer must then get the same information from its PayFac.
Mastercard's risk programs: BRAM, MMP, and the Excessive Chargeback Program
Mastercard runs a set of programs that watch merchants and their acquirers. Its manual covers three of them.
The Business Risk Assessment and Mitigation Program is called BRAM. It looks into merchants that may be making illegal or brand-damaging sales. It enforces Mastercard Rules sections 3.7 and 5.12.7. These cover the integrity of the brand and illegal or brand-damaging sales. Cases may start from Mastercard's own probes or from outside tips.
If BRAM finds a violation, Mastercard opens a case and notifies the acquirer. An acquirer in violation of the BRAM rules may be assessed USD 200,000 with respect to each merchant.
The Merchant Monitoring Program, called MMP, is the second program. Mastercard's rules say an acquirer joining the Merchant Monitoring Program must confirm the service provider is approved by Mastercard.
The Excessive Chargeback Program is the third. Mastercard built it so each acquirer keeps close watch on its chargebacks, one merchant at a time.
The Specialty Merchant Registration Program
Mastercard makes its customers register some types of merchant. They use the Specialty Merchant Registration tool. It sits in My Company Performance on Mastercard Connect. The acquirer must register a merchant or Sponsored Merchant with Mastercard first. Only then may it take non-face-to-face adult content and services sales from that merchant.
The same rule applies to other listed categories. Mastercard must approve the registration first. Only then may an acquirer take government-owned lottery or skill games sales for the merchant. For non-face-to-face gambling, lottery, and skill games, the customer must fill out the Acquirer Intake Form and send it in.
Mastercard urges acquirers to watch the sales of merchants and Sponsored Merchants in this program.
What registration requires
Mastercard asks for a lot of detail to register. Its manual says it includes:
- The name, doing business as name, and address of the entity.
- The names, addresses, and tax ID numbers of the main owners.
- A full account of the goods or services the entity will sell to cardholders.
- A description of how payments are processed, what cardholders are told, and other practices.
- Any past business ties of the entity's principal owners.
- Each website URL from which covered transactions may arise.
Fees Mastercard assesses for registration
Mastercard's manual sets a yearly USD 500 fee to register each merchant and Sponsored Merchant in these categories. It collects that fee from the acquirer through the Mastercard Consolidated Billing System.
The fee belongs to the acquirer in Mastercard's system. Ask your PayFac how it treats this fee before you sign.
Fraud and security monitoring duties
Mastercard's rules also make acquirers watch for fraud. Its rules require an acquirer to study each BIN attack. The acquirer must find how it worked and fix the weak spot. Its manual also requires acquirers to watch for fraud. That includes fake tries to link to a 3DS server or payment gateway as a merchant or PayFac.
These duties sit with the acquirer.
What this means for a merchant considering the PayFac route
Mastercard's Excessive Chargeback Program has each acquirer watch chargebacks at the merchant level.
If you sell in a covered category, expect questions on owners, what you sell and your website URLs. Mastercard's registration list drives those questions. Answer them in full and tell the truth.
Do you sell by phone? Then read our page on billing authorization.
See why banks watch payment processors to learn more.