High Risk Merchant Handbook

What an Account Termination Means

A terminated merchant account changes what happens next. Here is what termination means, what the Terminated Merchant File and MATCH Pro are, and what to do before you apply again.

Termination can shape what happens the next time you apply. This guide walks through what termination means, why acquirers end these agreements, and what you can do next.

What a merchant account termination means

Termination means the company that signed you has ended your merchant agreement. You can no longer take card payments through that account. Your ability to process cards stops.

Closing your own account is different. Stripe's agreement says a user may end it at any time by closing the account in the Stripe Dashboard. Termination is the acquirer's choice, and it may come with a listing you cannot ignore.

Why acquirers end merchant agreements

Acquirers end deals for many reasons. Your history also matters when you apply again. Visa's standards say a merchant's history of terminations, excessive chargebacks, fraud or illegal activity can affect the underwriting decision. That history follows you to the next application.

Disputes can be a reason. Visa's rules allow an acquirer to end the deal if a merchant gets far more disputes than the system average. If your chargebacks climb far above normal, the acquirer can act.

The agreement itself also gives the card network a say. Visa's rules say the merchant agreement must state that Visa can limit or end the acquirer's deal with the merchant. So Visa has the right to limit or end your deal.

Written notice and your agreement's own terms

Do you get told in writing? Visa's standards say the merchant must be notified in writing if the acquirer terminates the merchant agreement. Read that notice.

Your agreement's own terms also matter. Stripe's agreement says Stripe may terminate the agreement or close the user's Stripe account at any time. It also says Stripe can end the deal at once if the user breaks it in a big way. That holds when the user does not fix the break after notice. Check what your own agreement says about notice and cure periods.

Terminated for cause: the Terminated Merchant File

Being terminated for cause is the serious kind. Visa's standards say a merchant terminated for cause is listed on the Terminated Merchant File. That file is a database other acquirers check.

Visa's guide says the Visa Merchant Screening Service is a database product that acquirers and their designated agents use to list terminated merchants. If that service is not available, Visa's guide says a similar file must be used.

This affects your next application. Visa's rules require an acquirer to query a common terminated merchant database before entering into a merchant agreement with a prospective merchant. Visa's standards say acquirers must check the Terminated Merchant File before finalizing a contract with a prospective merchant.

The file is a screening tool, not a verdict. Visa's rules say Terminated Merchant File data must be used only as an informational tool in the decision-making process. Still, a new acquirer must check the file before it signs you.

MATCH Pro: Mastercard's list

Mastercard runs its own list, called MATCH Pro. Mastercard's rules say a customer must take part in MATCH Pro. The only outs are if Mastercard excuses it or the law bars it.

Acquirers must tell you about it. Mastercard's manual says customers must tell merchants they check MATCH Pro before signing them.

The system searches for matches. Mastercard's manual says MATCH Pro searches for exact possible matches and phonetic possible matches. It finds an exact match when the data sent matches the stored data. Every letter or number must line up.

How long your data stays and who handles corrections

Mastercard sets a time limit on personal data in its list. Mastercard's rules say MATCH personal details must be deleted or destroyed within five years at most. The same limit applies to MATCH Pro. Mastercard's rules say MATCH Pro personal details must be deleted or destroyed within five years at most.

If your listing is wrong, one party handles it. Mastercard's rules say the acquirer handles requests to fix or delete personal details in its MATCH Pro listings. Mastercard's manual has a section on acquirer requests to leave MATCH Pro. It also covers when to add a merchant to the list.

Mastercard also has the last word on whether rules were broken. Mastercard's manual says Mastercard makes a final determination on whether any violations occurred once all required information has been received.

Records outlast the deal. Mastercard's rules say the acquirer must keep all records from its review of a merchant. This holds even after the deal ends or runs out.

What survives after termination: fees and amounts owed

Under Stripe's terms, ending the deal does not end your debts. Stripe's agreement says ending the agreement does not relieve the user of paying amounts owed to Stripe from before termination. It also says the user's obligation to pay fees survives termination.

Your right to use the service stops, though. Stripe's agreement says the user loses all rights to the services and Stripe's tools the moment the deal ends.

Steps to take before you apply somewhere new

Before you apply for a new account, get your own file in order.

First, read your termination notice and your old agreement. Know which reason the acquirer gave.

Second, gather your records. Keep your dispute counts, sales records and any letters. They help you answer the next acquirer's questions.

Third, fix what caused the termination where you can. If disputes drove it, work on the reason customers dispute your sales. Phone sellers can start with billing authorization rules.

Fourth, expect questions about the termination. The new acquirer will check the lists described above, so answer honestly.

Last, know that banks watch processors too. That is why banks watch payment processors and their merchants. A clean, honest application is the best thing you can bring.

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