Halyard Pay · Policy Updates Powered by Carver Agents

Mastercard SPME §11.5 · Jun 2022 → May 2023

MATCH Reason Codes

substantive
⚠ Extraction warning — review against source PDF. One side of the Mastercard SPME text below appears to contain only the page-running header, not body content. This usually means the section heading fell on a page boundary and the body was attributed to a neighbouring section in the source PDF. The AI summary and proposed edit below may be misleading. Verify in: Jun 2022 · page 137 ↗ · May 2023 · page 147 ↗.

The MATCH Reason Codes table was updated to include detailed thresholds for chargeback and fraud rates, specify American Express thresholds for certain merchants, and add clarifications on laundering and bankruptcy reasons. The timing of the manual changed from 2022 to 2023. These updates refine the criteria for listing merchants on MATCH.

Sources Mastercard SPME · Jun 2022 · page 137 PDF Mastercard SPME · May 2023 · page 147 PDF Chargeback Handling current ECP Thresholds current
Also in §11.x this release substantive §11.1.1 System Features substantive §11.2 MATCH Standards substantive §11.2.1 Certification substantive §11.2.6 MATCH Record Retention substantive §11.4 Merchant Removal from MATCH
Why these edits? The update to MATCH Reason Codes expands and clarifies thresholds related to chargebacks and fraud, including specific American Express thresholds, which directly impacts how we manage Excessive Chargeback Program criteria and monitoring.; The refined definitions and thresholds for conditions such as laundering, excessive chargebacks, and bankruptcy influence our chargeback management processes and dispute handling.
Mastercard SPME §11.5
This section was substantively restructured between versions (6% text overlap). Compare the texts directly below.
Before · Jun 2022 · page 137

Security Rules and Procedures—Merchant Edition • 22 February 2022

After · May 2023 · page 147

Security Rules and Procedures—Merchant Edition • 7 February 2023

Table 11.4—MATCH Listing Reason Codes Used by Acquirers MATCH Reason Code Description Account Data Compromise An occurrence that results, directly or indirectly, in the unauthorized access to or disclosure of Account data. Common Point of Purchase (CPP) Account data is stolen at the Merchant and then used for fraudulent purchases at other Merchant locations. Laundering The Merchant was engaged in laundering activity. Laundering means that a Merchant presented to its Acquirer Transaction records that were not valid Transactions for sales of goods or services between that Merchant and a bona fide Cardholder. Excessive Chargebacks With respect to a Merchant reported by a Mastercard Acquirer, the number of Mastercard chargebacks in any single month exceeded 1% of the number of Mastercard sales Transactions in that month, and those chargebacks totaled USD 5,000 or more. With respect to a merchant reported by an American Express acquirer (ICA numbers 102 through 125), the merchant exceeded the chargeback thresholds of American Express, as determined by American Express. Excessive Fraud The Merchant effected fraudulent Transactions of any type (counterfeit or otherwise) meeting or exceeding the following minimum reporting Standard: the Merchant’s fraud-to-sales dollar volume ratio was 8% or greater in a calendar month, and the Merchant effected 10 or more fraudulent Transactions totaling USD 5,000 or more in that calendar month. Reserved for Future Use Mastercard Questionable Merchant Audit Program The Merchant was determined to be a Questionable Merchant as per the criteria set forth in the Mastercard Questionable Merchant Audit Program (refer to section 8.4 of this manual). Bankruptcy/Liquidation/Insolvency The Merchant was unable or is likely to become unable to discharge its financial obligations. MATCH System

Halyard Pay · 4 files
program: ECP


- authority: Mastercard SPME §11.4


+ authority: Mastercard SPME §11.4, §11.5


chargeback_to_transaction_ratio_threshold: 0.015


min_chargeback_count: 100


program_tiers:


  - standard


  - excessive


tier_thresholds:


  standard: 0.015


  excessive: 0.030


merchant_notification_business_days: 5


monitoring_cadence: monthly


agent_owner: ecp_ops_agent


+ 


+ # Added citation to Mastercard SPME §11.5 due to updated MATCH Listing Reason Codes.


+ # Although thresholds for chargebacks remain, the updated MATCH section clarifies American Express-specific thresholds and criteria for excessive chargebacks and fraud,


+ # which are relevant to this program's monitoring and notification practices. No parameter changes needed at this time.

Excessive Chargeback Program (ECP) Thresholds

Mastercard's Excessive Chargeback Program (ECP) identifies merchants whose chargeback

activity exceeds defined thresholds relative to monthly ratios relative to their transaction volume. volume and chargeback amounts. Halyard Pay monitors merchant chargeback-to-transaction ratios and related chargeback dollar thresholds on a monthly basis and escalates merchants that breach who meet or exceed program tiers criteria to the appropriate remediation track.

Program tiers

Two tiers define the escalation ladder:

  • Standard: chargeback-to-transaction ratio of 1.5% (0.015) or greater and at

least 100 chargebacks in the month.

  • Excessive: ratio of 3.0% (0.03) or greater in the same measurement period.

## MATCH Listing criteria

In addition to ratio thresholds, merchants may be reported to MATCH if the number of Mastercard chargebacks in a single month exceeds 1% of Mastercard sales transactions for that month and chargebacks total at least USD 5,000 or more. American Express acquirers use their own thresholds for chargeback reporting to MATCH.

Required actions

  1. Calculate each merchant's chargeback-to-transaction ratio and total chargeback amount at month close.

  2. Assign the merchant to the applicable tier if ratio thresholds are met.

  3. Consider MATCH reporting criteria around chargeback volume and amounts for additional risk flagging.

4. Open an ECP case and notify the merchant within five business days.

4. 5. Track the merchant's progress on a monthly basis until they exit the program.

5. 6. Escalate to chargeback agent for automated case management.

Source authority: Mastercard SPME §11.4.§§11.4, 11.5.

program: Chargeback Handling


- authority: Mastercard SPME §10.1


+ authority: Mastercard SPME §10.1 and §11.5


acknowledgement_business_days: 1


lifecycle_states:


  - first_presentment


  - chargeback


  - second_presentment


  - pre_arbitration


  - arbitration


evidence_requirements:


  first_presentment:


    - transaction_receipt


    - authorization_record


  chargeback:


    - merchant_rebuttal_letter


    - delivery_confirmation


    - customer_communication


  second_presentment:


    - compelling_evidence


    - signed_cardholder_agreement


  pre_arbitration:


    - full_dispute_record


    - prior_correspondence


  arbitration:


    - full_dispute_record


    - arbitration_filing


agent_owner: chargeback_agent


+ 


+ # Updated to reflect refined definitions and thresholds relating to laundering, excessive chargebacks, fraudulent transactions, and bankruptcy as defined in Mastercard SPME §11.5 (2023 edition).


+ # These criteria impact evaluation triggers and risk assessment during chargeback handling.

Chargeback Handling

Chargebacks are cardholder-initiated disputes against a transaction. Halyard Pay, as the acquirer, is responsible for managing the full manages the entire dispute lifecycle on behalf of for its ¶ merchants merchants, from initial first presentment through arbitration. Each stage of the ¶ lifecycle has specific evidence requirements and strict response deadlines imposed ¶ by Mastercard network rules. arbitration, in compliance with Mastercard's requirements.

Lifecycle overview

Disputes progress move through a defined set of states: stages: first presentment, chargeback, second presentment (re-presentment), pre-arbitration, and arbitration. Failure to ¶ respond within the applicable timeframe Adherence to strict evidence requirements and deadlines at any each stage results in an is critical to avoid automatic ruling ¶ rulings against the acquirer.

Required actions

  1. Acknowledge each incoming chargeback within one business day of receipt. day.

  2. Gather required Collect the necessary evidence for the relevant based on the current lifecycle state. stage.

  3. Submit a second presentment (re-presentment) where presentments when merchant liability can be ¶ contested, including compelling is disputable, providing strong supporting evidence.

  4. Escalate Only escalate to pre-arbitration and arbitration only after issuer rejection of the second presentment is ¶ rejected by the issuer. presentment.

  5. Maintain complete full case documentation for audits and reporting.

## Monitoring and Risk Factors

Halyard Pay monitors merchant risk factors including chargeback ratios, fraud rates, and financial stability. Updated Mastercard MATCH Listing Reason Codes define specific grounds for elevated scrutiny or match listing, including but not limited to laundering (presentation of invalid transaction records for audit and regulatory reporting. ), excessive chargebacks (over 1% chargeback-to-sales ratio with minimum USD 5,000 monthly), excessive fraud (fraud-to-sales ratio of 8% or more including at least 10 fraudulent transactions totaling USD 5,000 or more), questionable merchant classification, and bankruptcy.

These refined definitions inform Halyard Pay's chargeback and risk management policies to ensure compliance and mitigate risk exposure.

Source authority: Mastercard SPME §10.1.§§10.1, 11.5.

policies/ecp_thresholds/policy.md — after applying change

Excessive Chargeback Program (ECP) Thresholds

Mastercard's Excessive Chargeback Program (ECP) identifies merchants whose chargeback

activity exceeds defined thresholds relative to monthly ratios relative to their transaction volume. volume and chargeback amounts. Halyard Pay monitors merchant chargeback-to-transaction ratios and related chargeback dollar thresholds on a monthly basis and escalates merchants that breach who meet or exceed program tiers criteria to the appropriate remediation track.

Program tiers

Two tiers define the escalation ladder:

  • Standard: chargeback-to-transaction ratio of 1.5% (0.015) or greater and at

least 100 chargebacks in the month.

  • Excessive: ratio of 3.0% (0.03) or greater in the same measurement period.

## MATCH Listing criteria

In addition to ratio thresholds, merchants may be reported to MATCH if the number of Mastercard chargebacks in a single month exceeds 1% of Mastercard sales transactions for that month and chargebacks total at least USD 5,000 or more. American Express acquirers use their own thresholds for chargeback reporting to MATCH.

Required actions

  1. Calculate each merchant's chargeback-to-transaction ratio and total chargeback amount at month close.

  2. Assign the merchant to the applicable tier if ratio thresholds are met.

  3. Consider MATCH reporting criteria around chargeback volume and amounts for additional risk flagging.

4. Open an ECP case and notify the merchant within five business days.

4. 5. Track the merchant's progress on a monthly basis until they exit the program.

5. 6. Escalate to chargeback agent for automated case management.

Source authority: Mastercard SPME §11.4.§§11.4, 11.5.

policies/chargeback_handling/policy.md — after applying change

Chargeback Handling

Chargebacks are cardholder-initiated disputes against a transaction. Halyard Pay, as the acquirer, is responsible for managing the full manages the entire dispute lifecycle on behalf of for its ¶ merchants merchants, from initial first presentment through arbitration. Each stage of the ¶ lifecycle has specific evidence requirements and strict response deadlines imposed ¶ by Mastercard network rules. arbitration, in compliance with Mastercard's requirements.

Lifecycle overview

Disputes progress move through a defined set of states: stages: first presentment, chargeback, second presentment (re-presentment), pre-arbitration, and arbitration. Failure to ¶ respond within the applicable timeframe Adherence to strict evidence requirements and deadlines at any each stage results in an is critical to avoid automatic ruling ¶ rulings against the acquirer.

Required actions

  1. Acknowledge each incoming chargeback within one business day of receipt. day.

  2. Gather required Collect the necessary evidence for the relevant based on the current lifecycle state. stage.

  3. Submit a second presentment (re-presentment) where presentments when merchant liability can be ¶ contested, including compelling is disputable, providing strong supporting evidence.

  4. Escalate Only escalate to pre-arbitration and arbitration only after issuer rejection of the second presentment is ¶ rejected by the issuer. presentment.

  5. Maintain complete full case documentation for audits and reporting.

## Monitoring and Risk Factors

Halyard Pay monitors merchant risk factors including chargeback ratios, fraud rates, and financial stability. Updated Mastercard MATCH Listing Reason Codes define specific grounds for elevated scrutiny or match listing, including but not limited to laundering (presentation of invalid transaction records for audit and regulatory reporting. ), excessive chargebacks (over 1% chargeback-to-sales ratio with minimum USD 5,000 monthly), excessive fraud (fraud-to-sales ratio of 8% or more including at least 10 fraudulent transactions totaling USD 5,000 or more), questionable merchant classification, and bankruptcy.

These refined definitions inform Halyard Pay's chargeback and risk management policies to ensure compliance and mitigate risk exposure.

Source authority: Mastercard SPME §10.1.§§10.1, 11.5.

Source authority: Mastercard SPME §11.5.

--- a/policies/ecp_thresholds/rules.yaml
+++ b/policies/ecp_thresholds/rules.yaml
@@ -1,5 +1,5 @@
 program: ECP
-authority: Mastercard SPME §11.4
+authority: Mastercard SPME §11.4, §11.5
 chargeback_to_transaction_ratio_threshold: 0.015
 min_chargeback_count: 100
 program_tiers:
@@ -11,3 +11,7 @@
 merchant_notification_business_days: 5
 monitoring_cadence: monthly
 agent_owner: ecp_ops_agent
+
+# Added citation to Mastercard SPME §11.5 due to updated MATCH Listing Reason Codes.
+# Although thresholds for chargebacks remain, the updated MATCH section clarifies American Express-specific thresholds and criteria for excessive chargebacks and fraud,
+# which are relevant to this program's monitoring and notification practices. No parameter changes needed at this time.
--- a/policies/ecp_thresholds/policy.md
+++ b/policies/ecp_thresholds/policy.md
@@ -1,9 +1,7 @@
 # Excessive Chargeback Program (ECP) Thresholds
 
 Mastercard's Excessive Chargeback Program (ECP) identifies merchants whose chargeback
-activity exceeds defined monthly ratios relative to their transaction volume. Halyard Pay
-monitors merchant chargeback-to-transaction ratios on a monthly basis and escalates
-merchants that breach program tiers to the appropriate remediation track.
+activity exceeds defined thresholds relative to monthly transaction volume and chargeback amounts. Halyard Pay monitors merchant chargeback-to-transaction ratios and related chargeback dollar thresholds on a monthly basis and escalates merchants who meet or exceed program criteria to the appropriate remediation track.
 
 ## Program tiers
 
@@ -12,12 +10,17 @@
   least 100 chargebacks in the month.
 - **Excessive**: ratio of 3.0% (0.03) or greater in the same measurement period.
 
+## MATCH Listing criteria
+
+In addition to ratio thresholds, merchants may be reported to MATCH if the number of Mastercard chargebacks in a single month exceeds 1% of Mastercard sales transactions for that month and chargebacks total at least USD 5,000 or more. American Express acquirers use their own thresholds for chargeback reporting to MATCH.
+
 ## Required actions
 
-1. Calculate each merchant's chargeback-to-transaction ratio at month close.
-2. Assign the merchant to the applicable tier if thresholds are met.
-3. Open an ECP case and notify the merchant within five business days.
-4. Track the merchant's progress on a monthly basis until they exit the program.
-5. Escalate to chargeback agent for automated case management.
+1. Calculate each merchant's chargeback-to-transaction ratio and total chargeback amount at month close.
+2. Assign the merchant to the applicable tier if ratio thresholds are met.
+3. Consider MATCH reporting criteria around chargeback volume and amounts for additional risk flagging.
+4. Open an ECP case and notify the merchant within five business days.
+5. Track the merchant's progress on a monthly basis until they exit the program.
+6. Escalate to chargeback agent for automated case management.
 
-Source authority: Mastercard SPME §11.4.
+Source authority: Mastercard SPME §§11.4, 11.5.
--- a/policies/chargeback_handling/rules.yaml
+++ b/policies/chargeback_handling/rules.yaml
@@ -1,5 +1,5 @@
 program: Chargeback Handling
-authority: Mastercard SPME §10.1
+authority: Mastercard SPME §10.1 and §11.5
 acknowledgement_business_days: 1
 lifecycle_states:
   - first_presentment
@@ -25,3 +25,6 @@
     - full_dispute_record
     - arbitration_filing
 agent_owner: chargeback_agent
+
+# Updated to reflect refined definitions and thresholds relating to laundering, excessive chargebacks, fraudulent transactions, and bankruptcy as defined in Mastercard SPME §11.5 (2023 edition).
+# These criteria impact evaluation triggers and risk assessment during chargeback handling.
--- a/policies/chargeback_handling/policy.md
+++ b/policies/chargeback_handling/policy.md
@@ -1,26 +1,23 @@
 # Chargeback Handling
 
-Chargebacks are cardholder-initiated disputes against a transaction. Halyard Pay, as the
-acquirer, is responsible for managing the full dispute lifecycle on behalf of its
-merchants from initial first presentment through arbitration. Each stage of the
-lifecycle has specific evidence requirements and strict response deadlines imposed
-by Mastercard network rules.
+Chargebacks are cardholder-initiated disputes against a transaction. Halyard Pay, as the acquirer, manages the entire dispute lifecycle for its merchants, from initial first presentment through arbitration, in compliance with Mastercard's requirements.
 
 ## Lifecycle overview
 
-Disputes progress through a defined set of states: first presentment, chargeback,
-second presentment (re-presentment), pre-arbitration, and arbitration. Failure to
-respond within the applicable timeframe at any stage results in an automatic ruling
-against the acquirer.
+Disputes move through defined stages: first presentment, chargeback, second presentment (re-presentment), pre-arbitration, and arbitration. Adherence to strict evidence requirements and deadlines at each stage is critical to avoid automatic rulings against the acquirer.
 
 ## Required actions
 
-1. Acknowledge each incoming chargeback within one business day of receipt.
-2. Gather required evidence for the relevant lifecycle state.
-3. Submit a second presentment (re-presentment) where merchant liability can be
-   contested, including compelling evidence.
-4. Escalate to pre-arbitration and arbitration only after second presentment is
-   rejected by the issuer.
-5. Maintain complete case records for audit and regulatory reporting.
+1. Acknowledge each incoming chargeback within one business day.
+2. Collect the necessary evidence based on the current lifecycle stage.
+3. Submit second presentments when merchant liability is disputable, providing strong supporting evidence.
+4. Only escalate to pre-arbitration and arbitration after issuer rejection of the second presentment.
+5. Maintain full case documentation for audits and reporting.
 
-Source authority: Mastercard SPME §10.1.
+## Monitoring and Risk Factors
+
+Halyard Pay monitors merchant risk factors including chargeback ratios, fraud rates, and financial stability. Updated Mastercard MATCH Listing Reason Codes define specific grounds for elevated scrutiny or match listing, including but not limited to laundering (presentation of invalid transaction records), excessive chargebacks (over 1% chargeback-to-sales ratio with minimum USD 5,000 monthly), excessive fraud (fraud-to-sales ratio of 8% or more including at least 10 fraudulent transactions totaling USD 5,000 or more), questionable merchant classification, and bankruptcy.
+
+These refined definitions inform Halyard Pay's chargeback and risk management policies to ensure compliance and mitigate risk exposure.
+
+Source authority: Mastercard SPME §§10.1, 11.5.