Halyard Pay · Policy Updates Powered by Carver Agents

Mastercard SPME §9.4.3 · Jun 2022 → May 2023

Pharmaceutical and Tobacco Product Merchants

substantive

The updated rules require Acquirers to register merchants selling pharmaceuticals or tobacco products non-face-to-face with Mastercard, using specific MCC and TCC codes for transaction identification. Acquirers must verify and annually confirm legal compliance of these merchants, maintain documentation, and provide it to Mastercard upon request, adding more detailed obligations than before.

Sources Mastercard SPME · Jun 2022 · page 97 PDF Mastercard SPME · May 2023 · page 106 PDF KYB Acquirer current
Also in §9.x this release breaking §9.2.1 Merchant Registration Fees and Noncompliance Assessments breaking §9.4.1 Non-face-to-face Adult Content and Services Merchants substantive §9.3 General Monitoring Requirements substantive §9.4.2 Non–face-to-face Gambling Merchants substantive §9.4.6 High-Risk Cyberlocker Merchants substantive §9.4.7 Recreational Cannabis Merchants (Canada Region Only)
Why these edits? The updated section 9.4.3 expands Acquirer KYB duties by requiring Acquirers to register non-face-to-face pharmaceutical and tobacco product merchants with Mastercard, verify their legal compliance at registration, maintain related documentation, and annually confirm compliance. This represents a substantive increase in the verification, documentation, and reporting obligations of Acquirers towards merchant compliance validation.
Mastercard SPME §9.4.3
This section was substantively restructured between versions (14% text overlap). Compare the texts directly below.
Before · Jun 2022 · page 97

Security Rules and Procedures—Merchant Edition • 22 February 2022

months, confirm continued compliance with applicable law concerning the business of the registered Merchant or Submerchant. The Acquirer must furnish Mastercard with a copy of such documentation promptly upon request.

After · May 2023 · page 106

Security Rules and Procedures—Merchant Edition • 7 February 2023

Before acquiring Transactions as described below, an Acquirer first must register the Merchant with Mastercard as described in section 9.2:

  • Non–face-to-face sale of pharmaceuticals (MCC 5122 and MCC 5912)
  • Non–face-to-face sale of tobacco products (MCC 5993) An Acquirer must identify all non-face-to-face pharmaceutical Transactions using MCC 5122 (Drugs, Drug Proprietors, and Druggists Sundries) and TCC T for wholesale purchases or MCC 5912 (Drug Stores, Pharmacies) and TCC T for retail purchases. An Acquirer must identify all non-face-to-face tobacco product Transactions using MCC 5993 (Cigar Stores and Stands) and TCC T. For clarity, the term acquiring, as used in this section, is “acquiring Activity” as such term is used in Rule 2.3 of the Mastercard Rules manual. At the time of registration of a Merchant or Sponsored Merchant in accordance with this section, the Acquirer of such Merchant or Sponsored Merchant must have verified that the Merchant’s or Sponsored Merchant's activity complies fully with all laws applicable to Mastercard, the Merchant or Sponsored Merchant, the Issuer, the Acquirer, and any prospective customer of the Merchant or Sponsored Merchant. Such verification may include, but is not limited to, a written opinion from independent, reputable, and qualified legal counsel or accreditation by a recognized third party. By registering a Merchant or Sponsored Merchant as required by this section, the Acquirer represents and warrants that the Acquirer has verified compliance with applicable law as described above. The Acquirer must maintain such verification for so long as it acquires Transactions from the Merchant or Sponsored Merchant that is subject to the aforedescribed registration requirement and must, no less frequently than every 12 months, confirm continued compliance with applicable law concerning the business of the registered Merchant or Sponsored Merchant. The Acquirer must furnish Mastercard with a copy of such documentation promptly upon request.
Halyard Pay · 2 files
program: Acquirer KYB


- authority: Mastercard SPME §2.1


+ authority: Mastercard SPME §2.1, §9.4.3


required_documents:


  - incorporation


  - beneficial_ownership


  - aml_screen


  - license_verification


+   - legal_compliance_verification  # Verification that merchant complies with applicable law


min_review_cycle_days: 365


suspension_trigger: document_collection_failure


record_retention_years: 7


aml_watchlist_sources:


  - ofac_sdn


  - eu_consolidated


agent_owner: kyb_agent


+ merchant_registration_and_verification:


+   non_face_to_face_pharmaceutical_and_tobacco_merchants:


+     require_mastercard_registration: true


+     required_mccs:


+       - 5122  # Drugs, Drug Proprietors, and Druggists Sundries


+       - 5912  # Drug Stores, Pharmacies


+       - 5993  # Cigar Stores and Stands


+     require_legal_compliance_verification: true


+     verification_may_include:


+       - legal_opinion


+       - third_party_accreditation


+     confirmation_frequency_days: 365


+     document_furnishing_upon_request: true


+ 


+ # Added explicit requirements to register certain non-face-to-face pharmaceutical and tobacco merchants with Mastercard, verify their legal compliance at registration,


+ # maintain evidence of such verification for at least one year, and provide documentation promptly upon Mastercard request, in alignment with SPME §9.4.3 updates.

Acquirer KYB (Know Your Business) Obligations

Acquirers processing transactions on the Mastercard network are required to perform

Know Your Business (KYB) due diligence on merchants before onboarding and on a

recurring basis thereafter. Halyard Pay, as an acquirer, must collect and verify a

minimum set of documents for each merchant to establish business legitimacy, confirm

beneficial ownership, and satisfy anti-money laundering screening requirements.

When this policy applies

This policy applies to all new merchant onboarding and to all periodic re-verification

reviews. Merchants that fail to supply required documentation within the stipulated

period must be suspended from processing until compliance is restored.

Required actions

  1. Collect all required KYB documents at onboarding prior to approval.

  2. Conduct AML screening against applicable watchlists before approval.

  3. Verify business licenses for regulated merchant categories.

  4. Schedule a full re-verification review at least once every 365 days.

  5. Document Register all non-face-to-face pharmaceutical (MCC 5122 or 5912) and tobacco (MCC 5993) product merchants with Mastercard prior to acquiring transactions as per Mastercard SPME §9.4.3.

6. Verify and document legal compliance of such merchants at registration, potentially including legal opinions or third-party accreditations.

7. Maintain these compliance verifications and confirm continuing compliance at least annually.

8. Retain all verification outcomes and retain records for audit purposes. documentation and provide it promptly to Mastercard upon request.

Source authority: Mastercard SPME §2.1.§2.1, §9.4.3.

policies/kyb_acquirer/policy.md — after applying change

Acquirer KYB (Know Your Business) Obligations

Acquirers processing transactions on the Mastercard network are required to perform

Know Your Business (KYB) due diligence on merchants before onboarding and on a

recurring basis thereafter. Halyard Pay, as an acquirer, must collect and verify a

minimum set of documents for each merchant to establish business legitimacy, confirm

beneficial ownership, and satisfy anti-money laundering screening requirements.

When this policy applies

This policy applies to all new merchant onboarding and to all periodic re-verification

reviews. Merchants that fail to supply required documentation within the stipulated

period must be suspended from processing until compliance is restored.

Required actions

  1. Collect all required KYB documents at onboarding prior to approval.

  2. Conduct AML screening against applicable watchlists before approval.

  3. Verify business licenses for regulated merchant categories.

  4. Schedule a full re-verification review at least once every 365 days.

  5. Document Register all non-face-to-face pharmaceutical (MCC 5122 or 5912) and tobacco (MCC 5993) product merchants with Mastercard prior to acquiring transactions as per Mastercard SPME §9.4.3.

6. Verify and document legal compliance of such merchants at registration, potentially including legal opinions or third-party accreditations.

7. Maintain these compliance verifications and confirm continuing compliance at least annually.

8. Retain all verification outcomes and retain records for audit purposes. documentation and provide it promptly to Mastercard upon request.

Source authority: Mastercard SPME §2.1.§2.1, §9.4.3.

Source authority: Mastercard SPME §9.4.3.

--- a/policies/kyb_acquirer/rules.yaml
+++ b/policies/kyb_acquirer/rules.yaml
@@ -1,10 +1,11 @@
 program: Acquirer KYB
-authority: Mastercard SPME §2.1
+authority: Mastercard SPME §2.1, §9.4.3
 required_documents:
   - incorporation
   - beneficial_ownership
   - aml_screen
   - license_verification
+  - legal_compliance_verification  # Verification that merchant complies with applicable law
 min_review_cycle_days: 365
 suspension_trigger: document_collection_failure
 record_retention_years: 7
@@ -12,3 +13,19 @@
   - ofac_sdn
   - eu_consolidated
 agent_owner: kyb_agent
+merchant_registration_and_verification:
+  non_face_to_face_pharmaceutical_and_tobacco_merchants:
+    require_mastercard_registration: true
+    required_mccs:
+      - 5122  # Drugs, Drug Proprietors, and Druggists Sundries
+      - 5912  # Drug Stores, Pharmacies
+      - 5993  # Cigar Stores and Stands
+    require_legal_compliance_verification: true
+    verification_may_include:
+      - legal_opinion
+      - third_party_accreditation
+    confirmation_frequency_days: 365
+    document_furnishing_upon_request: true
+
+# Added explicit requirements to register certain non-face-to-face pharmaceutical and tobacco merchants with Mastercard, verify their legal compliance at registration,
+# maintain evidence of such verification for at least one year, and provide documentation promptly upon Mastercard request, in alignment with SPME §9.4.3 updates.

--- a/policies/kyb_acquirer/policy.md
+++ b/policies/kyb_acquirer/policy.md
@@ -18,6 +18,9 @@
 2. Conduct AML screening against applicable watchlists before approval.
 3. Verify business licenses for regulated merchant categories.
 4. Schedule a full re-verification review at least once every 365 days.
-5. Document all verification outcomes and retain records for audit purposes.
+5. Register all non-face-to-face pharmaceutical (MCC 5122 or 5912) and tobacco (MCC 5993) product merchants with Mastercard prior to acquiring transactions as per Mastercard SPME §9.4.3.
+6. Verify and document legal compliance of such merchants at registration, potentially including legal opinions or third-party accreditations.
+7. Maintain these compliance verifications and confirm continuing compliance at least annually.
+8. Retain all verification documentation and provide it promptly to Mastercard upon request.
 
-Source authority: Mastercard SPME §2.1.
+Source authority: Mastercard SPME §2.1, §9.4.3.