LOS ANGELES — MobiusPay has issued an advisory regarding recent updates to VISA's high-brand risk (HBR) acquiring programs, set to take effect October 17, 2020.
"By increasing the scope of their HBR definitions, VISA is requiring companies to adjust their payment processing to comply with these updated regulations," a MobiusPay representative explained. "Also, VISA is adding several categories they have identified as warranting additional oversight. Plus, clarification has been added to specify that the HBR requirements apply specifically to merchants operating in the card-absent environment."
"Many acquirers of HBR should be using this advance notice to adjust the processes they use so that they can comply with the updated requirements," noted the rep. "Those that have not registered their HBR merchants before April 17, 2021, could be subject to noncompliance assessments."
VISA rules require that acquirers only enter HBR transactions into the payment system after applying for and receiving written VISA approval of HBR Acquirer Registration.
The remainder of the MobiusPay advisory follows:
Those applying for HBR acquirer status must meet the criteria outlined by VISA. They must be investment grade. Also, they need to have at least $100 million in equity capital. VISA can waive these first two requirements in exchange for “assurance and evidence of the imposition of risk controls satisfactory to VISA.” These controls and requirements can include the pledging of collateral, among other things.
Also, acquirer applicants must comply with the VISA rules and all policies and requirements. The VISA Global Acquirer Risk Standards must be adhered to and have an appropriate amount of due diligence conducted to ensure this.
Acquirer applicants must also be in good standing in VISA risk management programs. They must also fully mediate and complete an on-site operation review if required to do so.
Several merchant types that were not previously classified as HBR will not be classified that way. These companies' card-absent merchants must be registered with VISA, effective October 17, 2020.
The following merchant category codes (MCCs), will be classified as HBR: 5962, 5966, 5967, 7273, 7995, 5993, 5122 and 5912.
MCC code 7273, which will be seeing changes, is Dating Services. This includes mainstream dating services that may not have been considered HBR previously. Dating and escort-related services fit under this category. Monthly subscriptions to dating websites and online classified ads that include escort services fall under this category.
MCC code 5966 applies to Outbound Telemarketing Merchants. Those involved with the sale of products or services using outbound telemarketing, such as unsolicited tech support desks or credit card protection, fall under this category.
Other notable additions include travel-related arrangement services, inbound teleservices merchants, cigar stores and stands, druggists sundries, drugs and drug proprietaries; also drugstores and pharmacies.
All of these utilizing card-absent transactions will be classified as HBR. The MCC codes listed above will have this classification.
MCC Codes With Changes For Certain Card-Absent Activity
There are some MCC’s that will be seeing changes but not to the entire MCC code. Instead, one or more particular activities within the general classification will see changes. This includes MCC 4816, MCC 5816 and MCC 6051. If your business has any of these classification codes, contact the team at Mobius for more information and if you have questions. Knowing which activities require registration is essential to keep your business running smoothly. These changes again apply to any card-absent transactions.
Merchant Registration And Details
In addition to knowing the changes that are being made and whether you will need to register your HBR merchant via the Program Request Management tool (PRM) at VISA online, you will want to pay attention to what these changes mean. PRM is a web-based workflow system designed for self-service. There is a module for HBR merchant registrations within it. You can get the full details on HRM processes in the PRM High-Risk Merchant Registration Users Guide — External. This tool will be available to clients in October 2020 and will include the new HBR categories. Be ready for the upcoming changes by speaking with the professionals at Mobius. Keep in mind that during registration, key information about merchants is gathered. This is provided to VISA for review. A merchant's URLs, business address, dates of site inspection, approved monthly sales volume, and principal identity and identities are included in this information.
Limited Existing Merchant Exceptions Announced
Acquirers that are processing for merchants contracted before October 17, 2020 in MCC categories 4816, 5816, 6051 and 7273 might not currently hold High-Brand Acquirer Registration. In these instances, VISA will grant an exception to the acquirer registration requirement, although acquirers must register these merchants with Visa and apply for the exemption. This can be done using the PRM tool. Note that exemption requests will require proof of the merchant contract date to be provided. Any new merchants that are contracted within these categories after October 17, 2020, will require High-Brand Risk Acquirer Registration.
What Should I Know About The Fee Schedule?
Some merchants will be paying additional registration fees beyond what they would be paying before these changes go into effect. Registration fees are $500 per merchant annually. Billed at the time of registration, this is an initial registration fee. Each year, annual renewal billing will occur in September, beginning in 2022. Merchants registered in the previous year will have renewal billing applied. Annual fees are processed through integrated billing. Acquirers must enter any changes to the preliminary renewal bill using the HRM application located at Visa Online. Acquirers must submit terminations by September 1 of each year to avoid the renewal fee.
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