program: Fraud Monitoring
- authority: Mastercard SPME §3.7, §8.6.6, §11.1.1
+ authority: Mastercard SPME 3.7, 8.6.6, 1.1.1
fraud_to_sales_ratio_threshold: 0.015
min_count_per_month: 100
monitoring_cadence: monthly
escalation_actions:
  - escalate_to_human_review
  - notify_acquirer
lookback_period_months: 1
remediation_review_interval_days: 30
agent_owner: fraud_ops_agent
 
- # MATCH fraud detection features are limited to principal owners only; associate owners and Service Provider name reporting are removed per SPME §11.1.1.
- # Acquirers may add and search for information on up to five principal owners per Merchant.
- # Multiple data fields are used to determine matches; MATCH supports editing and error notification to reduce delays.
- # Retroactive alert processing is supported for data up to 360 days old.
- # Acquirers control receipt and detail of inquiry match information.
- # Real-time access via MATCH Online and API, and batch operations remain available.
- # Merchant URL information may be added and searched.
- # After obtaining MATCH inquiry results, acquirers must assess whether further investigation or risk mitigation actions are warranted, per updated SPME requirements.
+ # MATCH fraud detection remains centered on principal owners, without associate owners or Service Provider name reporting, as per SPME 11.1.1.
+ # Acquirers can search up to five principal owners per Merchant to identify fraud risks.
+ # MATCH uses multiple data fields to enhance matching accuracy and supports error notifications to reduce investigation delays.
+ # Retroactive alerting is supported for data up to 360 days old.
+ # Acquirers maintain control over inquiry data receipt and detail.
+ # Real-time MATCH access continues via online and API interfaces.
+ # Merchant URL information can be added and searched for.
+ # After obtaining MATCH inquiry results, acquirers must assess the need for further investigations or risk mitigations, consistent with updated SPME requirements.
#
- # New requirements under SPME §8.6.6 specify that Mastercard will add Merchants to MATCH using reason code 24 (Illegal Transactions) when Merchants meet Coercion Program criteria.
- # Merchants subject to a subsequent claim of coercion within 12 months will be added with reason code 00 (Questionable Acquirer/Under Investigation).
- # If the claim is confirmed to meet Coercion Program criteria, the MATCH record will be updated to reason code 24.
- # If not confirmed, the MATCH record will be deleted.
- # These provisions enhance fraud monitoring by requiring tracking of coercion-related transaction risks.
+ # Per SPME 8.6.6, Mastercard adds Merchants meeting Coercion Program criteria to MATCH with reason code 24 (Illegal Transactions).
+ # Merchants with subsequent coercion claims within 12 months receive a reason code 00 (Questionable Acquirer/Under Investigation) initially; confirmation updates this to code 24 or results in record deletion if unconfirmed.
+ # These updates strengthen fraud monitoring around coercion-related risks.
+ #
+ # Note: The previous SPME provision regarding issuer partial recovery for questionable merchants was removed.
+ # The new rule (SPME 8.4.8) replaces this with a potential audit fee charged to Acquirers, up to USD 2,500 per identification of a Merchant as Questionable.
+ # This shifts responsibility for certain fraud loss recovery and auditing costs to Acquirers.

Fraud Monitoring

Halyard Pay monitors merchant fraud activity and leverages Mastercard's MATCH system for enhanced fraud risk assessment on merchants processed through our platform.

When this policy applies

This policy applies to all merchants processed by Halyard Pay where Mastercard is the applicable network, covering both card-present and card-not-present transactions.

Required actions

1. Compute the merchant's rolling fraud-to-sales ratio each calendar month.

2. If the ratio meets or exceeds 1.5% and the fraud count reaches at least 100 transactions in that month, escalate the merchant account to human review immediately.

3. Utilize Mastercard's MATCH system data focusing on principal owners only, as per the updated Mastercard SPME guidelines. Do not consider associate owners or Service Provider names in fraud assessments.

4. Maintain awareness of Mastercard's MATCH reason codes related to coercion programs: merchants may be added with reason code 24 for illegal transactions upon meeting coercion criteria, or with code 00 if a subsequent coercion claim arises within 12 months; records must be updated or removed based on confirmation of these claims.

5. After accessing MATCH data, conduct a risk assessment to determine whether further investigation or additional measures are warranted.

6. Notify the acquiring compliance officer and document the case ID with supporting transaction data.

7. Track case progress until the account returns to threshold compliance or is terminated.

## Additional compliance cost awareness

Be aware that Mastercard may charge Halyard Pay, as the acquirer, an audit fee of up to USD 2,500 for each merchant identified as a Questionable Merchant. This change reflects Mastercard's updated policy shifting fraud loss recovery responsibilities away from issuers and introducing audit fees for acquirers (see Mastercard SPME §8.4.8).

Source authority: Mastercard SPME §3.7, §8.4.8, §8.6.6, and §11.1.1.