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NETbilling · 03-06-2013, 01:06 PM

This was announced Sept 2012...

Effective September 15th 2012, MasterCard is lowering their annual high-risk registration fee from $1,000 to $500. This means merchants who acquire a high-risk merchant account will pay an annual fee of $1,000 instead of $1,500 for Visa and MasterCard. When current merchants with a high-risk merchant account come up for renewal this new reduction will take effect.

MasterCard is also requiring all adult high-risk sub-merchants processing with a third party processor to be registered with MasterCard by September 15th. All high risk sub-merchants will have to pay an annual renewal fee of $500 for MasterCard. Starting this year the cost of registration fees for high risk merchants will be the same regardless of whether they have a direct high risk account or a high risk account under an aggregator or third party processor ($500 for Visa and $500 for MasterCard). In the past, MasterCard did not have any registration fees for sub-merchants the way they do for direct merchants.

Both Visa and MasterCard have rules regarding how much volume the sub-merchants should be processing on an annual basis. Visa has never enforced their rules regarding how much volume a sub-merchant can process under the IPSP model and since the program with MasterCard is new, we don’t know how strongly MasterCard will enforce their rules regarding volume. Both associations require the banks to provide how much the merchants will be processing for their card type on a monthly or annual basis as well as monthly or quarterly reporting throughout the year so they can monitor how much the sub-merchants are actually processing. MasterCard’s rules state that sub-merchants processing under a Payment Facilitator should be processing less than $100,000 in MasterCard volume on an annual basis and Visa’s rules state that sub-merchants processing under the IPSP model should be processing less than $100,000 in Visa volume on an annual basis.

MasterCard has said there was some flexibility for sub-merchants that were over the $100,000 annual threshold but merchants that far exceeded the threshold should have a direct merchant account. Both associations set up the aggregator models for the purpose of processing for small merchants that are either unable to get their own merchant account or prefer to have the aggregator handle the billing for them. Both associations’ expectations of merchants that process over $8,500 per month with each card brand or $100,000 annually with each card brand is that they should have their own merchant account.

Additionally, MasterCard is changing the current ECP thresholds related to the identification of both CMMs and ECMs. The Excessive Chargeback Program (ECP) is intended to encourage each merchant to closely monitor its chargeback performance and to determine promptly when a merchant has exceeded, or is likely to exceed, monthly chargeback thresholds.

The two types of ECP identification are Chargeback-Monitored Merchants (CMMs) and Excessive Chargeback Merchants (ECMs).

Effective August 15, 2012, MasterCard will revise the definitions for CMMs and ECMs as described below. All merchant data reported to the ECP after the effective date will be subject to the new criteria.

Chargeback-Monitored Merchant (CMM):
MasterCard is revising the definition of a CMM by changing the thresholds for CMM identification from a CTR in excess of 50 basis points and at least 50 chargebacks in a calendar month to a CTR in excess of 100 basis points and at least 100 chargebacks in a calendar month.

Excessive Chargeback Merchant (ECM):
MasterCard is revising the definition of an ECM by changing the thresholds for ECM identification from a minimum CTR of 100 basis points and at least 50 chargebacks in each of two consecutive calendar months to a minimum CTR of 150 basis points and at least 100 chargebacks in each of two consecutive calendar months.

03-06-2013, 01:06 PM
NETbilling Confirmed User Industry Role: Join Date: Jan 2002 Location: Huntington Beach, CA Posts: 8,580	This was announced Sept 2012... Effective September 15th 2012, MasterCard is lowering their annual high-risk registration fee from $1,000 to $500. This means merchants who acquire a high-risk merchant account will pay an annual fee of $1,000 instead of $1,500 for Visa and MasterCard. When current merchants with a high-risk merchant account come up for renewal this new reduction will take effect. MasterCard is also requiring all adult high-risk sub-merchants processing with a third party processor to be registered with MasterCard by September 15th. All high risk sub-merchants will have to pay an annual renewal fee of $500 for MasterCard. Starting this year the cost of registration fees for high risk merchants will be the same regardless of whether they have a direct high risk account or a high risk account under an aggregator or third party processor ($500 for Visa and $500 for MasterCard). In the past, MasterCard did not have any registration fees for sub-merchants the way they do for direct merchants. Both Visa and MasterCard have rules regarding how much volume the sub-merchants should be processing on an annual basis. Visa has never enforced their rules regarding how much volume a sub-merchant can process under the IPSP model and since the program with MasterCard is new, we don’t know how strongly MasterCard will enforce their rules regarding volume. Both associations require the banks to provide how much the merchants will be processing for their card type on a monthly or annual basis as well as monthly or quarterly reporting throughout the year so they can monitor how much the sub-merchants are actually processing. MasterCard’s rules state that sub-merchants processing under a Payment Facilitator should be processing less than $100,000 in MasterCard volume on an annual basis and Visa’s rules state that sub-merchants processing under the IPSP model should be processing less than $100,000 in Visa volume on an annual basis. MasterCard has said there was some flexibility for sub-merchants that were over the $100,000 annual threshold but merchants that far exceeded the threshold should have a direct merchant account. Both associations set up the aggregator models for the purpose of processing for small merchants that are either unable to get their own merchant account or prefer to have the aggregator handle the billing for them. Both associations’ expectations of merchants that process over $8,500 per month with each card brand or $100,000 annually with each card brand is that they should have their own merchant account. Additionally, MasterCard is changing the current ECP thresholds related to the identification of both CMMs and ECMs. The Excessive Chargeback Program (ECP) is intended to encourage each merchant to closely monitor its chargeback performance and to determine promptly when a merchant has exceeded, or is likely to exceed, monthly chargeback thresholds. The two types of ECP identification are Chargeback-Monitored Merchants (CMMs) and Excessive Chargeback Merchants (ECMs). Effective August 15, 2012, MasterCard will revise the definitions for CMMs and ECMs as described below. All merchant data reported to the ECP after the effective date will be subject to the new criteria. Chargeback-Monitored Merchant (CMM): MasterCard is revising the definition of a CMM by changing the thresholds for CMM identification from a CTR in excess of 50 basis points and at least 50 chargebacks in a calendar month to a CTR in excess of 100 basis points and at least 100 chargebacks in a calendar month. Excessive Chargeback Merchant (ECM): MasterCard is revising the definition of an ECM by changing the thresholds for ECM identification from a minimum CTR of 100 basis points and at least 50 chargebacks in each of two consecutive calendar months to a minimum CTR of 150 basis points and at least 100 chargebacks in each of two consecutive calendar months. __________________ Mitch Farber CEO - NETbilling, Inc. Email / Phone: 888-357-8166 / 661-252-2456 Transaction processing & 24/7 call center services with exceptional rates and flexibility, since 1998!