TMF Processing

Best Rates for High Risk Merchant Accounts

Merchant accounts can be flagged as "high risk" for credit card processing if they are in fields of business that are considered to have an increased danger of chargebacks, fraud, and financial issues. Typically, banks and standard ISOs will not board a high risk business, so there are secondary market and offshore processing alternatives for accepting cards.

Terminated Merchant File

High Risk Credit Card ProcessingThe MATCH list, or Terminated Merchant File (TMF) is a designation applied to businesses, addresses, and principal owners (as well as their families) if they have had accounts closed due to fraud, chargebacks, or risk factors. In some cases store owners may get on the list due to a business bankruptcy or a chargeback that hit the merchant account after the business closed. If you cannot get off the MATCH list, you may have to contract with third party processors or high risk accounts in order to take cards. In extreme cases associations like AMEX, Discover, Visa, and MasterCard may rule that you cannot take any cards bearing their logo. The MATCH list was established, much like the Chex system for banking, because some unscrupulous merchants abused merchant accounts, either by fraud, factoring, or excessive chargebacks. For example, many supplement sellers use "negative option" marketing where they offer a free sample followed by high monthly charges for automatic refills. People tend to dispute these charges, and this costs banks money. Enough chargebacks, especially when fraud is involved, can result in negative account balances. Because ISOs, banks, and acquirers have to pay back the lost money if they can't squeeze it out of the busines owner, the problem will result in a listing in order to try and prevent future abuses. The danger of the TMF and MATCH list is that sometimes a business address can be associated with a bad company, so many companies in the same office complex could lose the right to process.

Common High Risk Merchants

To end up in the high risk category, your company's SIC code must match up with company types that are known to experience chargebacks and fraud. You don't have to be guilty of anything, and even if you have been running a "white hat" company for years, if you switch into a different category you can see you processing rates skyrocket if you can get them at all. Remember, some sellers attract fraud because their products may be bought with stolen credit cards, then re-sold for cash on the street. Other sellers may be subject to increased risk ratings because they take big dollar charges for intangibles or for services, and people may charge back. Further cases may be the result of "friendly fraud" where the buyer pretends that he or she did not get the product or service. This often happens when the "Mrs." asks her man about an illicit charge and he professes ignorance rather than admitting he supports aspiring acrobats.

High Risk Business Categories Include:

Travel Agents (big dollar transactions, easy to charge back afterward)

Supplement Sellers (anger at terms and conditions)

Gambling Websites (losers don't wanna pay)

Adult Services (may be bought with stolen cards)

Pharmaceuticals (often purchased with stolen cards by pill poppers)

Water Filters (high pressure sales, people find out they paid $1,200 for a $159 filter)

Electronic Cigarettes (Easily resold for cash)

Telemarketing (pressure and remorse)

Coin and Jewelry Shops (crooks buy precious metals with purloined cards)

Psychics and Horoscopes (dissatisfaction with predictions)

Infomercial Products (unhappy buyers, did not get rich in 2 days)

The list of industries and trades is actually much longer, and includes online dating services, tobacco shops, gun and ammo dealers, private detectives and/or bail bondsmen, weight loss products, mall kiosks, MLMs, nightlclubs and limo drivers, and car rental services. Used car dealers are often high risk because people somehow lose trust in the vehicle they purchased and the person who sold it to them.