Understanding the MATCH List and Stripe’s Chargeback Thresholds

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Understanding the MATCH List and Stripe’s Chargeback Thresholds

What Every Merchant Should Know

In the fast-paced world of online transactions, maintaining a healthy business involves not just providing excellent services or products but also understanding the intricacies of payment processing systems. One aspect that often goes unnoticed until it's too late is the significance of chargebacks and their potential impact on your standing with payment processors, like Stripe.

The Chargeback Threshold

Did you know that payment processors, including Stripe, have strict regulations when it comes to chargebacks? A chargeback occurs when a customer disputes a charge from your business and asks their card issuer to reverse it. While chargebacks can protect consumers from fraudulent transactions, an excessive number can signal problems with a merchant's business practices or customer service.

The Critical 1% Threshold

Mastercard sets specific numerical benchmarks that trigger the inclusion of accounts on the MATCH list, particularly under two reason codes related to chargeback and fraud activities. These conditions apply even to businesses that operate legally and within the rules but still experience high levels of certain activities. The details for these reason codes are outlined below:

Code #4 – Excessive Chargebacks: This code is applied when a merchant, as reported by a Mastercard Acquirer, incurs Mastercard chargebacks exceeding 1% of their Mastercard sales transactions in any given month, with a total exceeding USD 5,000.

Code #5 – Excessive Fraud: This applies to merchants who have conducted fraudulent transactions (counterfeit or otherwise) that reach or surpass a set threshold: a fraud-to-sales dollar volume ratio of 8% or greater in one calendar month, along with at least 10 fraudulent transactions, cumulatively amounting to USD 5,000 or more during that month.

These criteria are central to understanding how seemingly standard business operations can inadvertently lead to significant issues with payment processing services.

Understanding the Timeline for MATCH List Inclusion

It's also vital for merchants to understand the specifics of how and when a business might be added to the MATCH list following certain criteria. Should your business meet any of the criteria for inclusion on the MATCH list, your payment processor, like Stripe, is obligated to register your business’s details on the list. This registration process is required to take place either within a day of the termination of your partnership with the processor or within one day after your account becomes eligible for MATCH list inclusion post-termination. This timeline underscores the importance of maintaining compliant practices and keeping chargeback rates low to avoid sudden and severe impacts on your ability to process payments.

What is the MATCH List?

The MATCH list, also known as the Member Alert to Control High-Risk Merchants list, is a database maintained by MasterCard. It's used by payment processors to screen potential clients. Once a merchant is added to this list, it becomes challenging to obtain payment processing services, as it signals to processors that the merchant poses a high risk.

How Does This Affect You?

Being placed on the MATCH list can severely impact your business operations, affecting your ability to accept credit card payments and, ultimately, your revenue. It is crucial to monitor your chargeback rates closely and take proactive steps to keep them below the 1% threshold.

Tips to Stay Below the Threshold:

1. Clear Communication: Make sure your product descriptions and return policies are clear and visible.

2. Prompt Customer Service: Address disputes and customer issues quickly and efficiently.

3. Transaction Details: Provide detailed transaction records to customers and ensure your business name is recognizable on statements.

4. Fraud Prevention: Implement security measures to detect and prevent fraudulent transactions.

SeamlessChex Specializes in High-Risk Processing

SeamlessChex understands the challenges that businesses face, especially those listed on the MATCH list, and offers specialized merchant services designed to help. Even if your business has been placed on the MATCH list, there's still hope for restoring your payment processing capabilities. With SeamlessChex Merchant Services, we specialize in high-risk processing, providing tailored solutions that can help you obtain a merchant account despite past hurdles. Our team of experts is well-versed in navigating the complexities associated with high-risk accounts and works diligently to find the best path forward for your business. By leveraging our services, you can regain the ability to process payments securely and efficiently, ensuring your business remains operational and competitive. Learn more about how we can assist by visiting SeamlessChex High-Risk Processing.

Understanding the implications of chargebacks and the importance of maintaining a low chargeback rate is essential for all merchants. By staying informed and taking preventative measures, you can avoid the repercussions of being added to the MATCH list and ensure a smooth, uninterrupted operation for your online business. Check out our other Blog about High-Risk Merchant Processing here.

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