program: Acquirer KYB
- authority: Mastercard SPME 2.1, 11.2.3, 11.2.6, 11.7.1, 2.4.1
+ authority: Mastercard SPME 2.1, 9.4.4, 11.2.3, 11.2.6, 11.7.1, 2.4.1
required_documents:
  - incorporation
  - beneficial_ownership
  - aml_screen
  - license_verification
+   - legal_opinion_government_owned_lottery
+   - third_party_certification_lottery_controls
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
# Acquirers must perform a MATCH inquiry prior to entering into any Merchant Agreement or enabling a Merchant to accept transactions, as detailed in Mastercard SPME §11.2.3. This inquiry must be conducted using the correct Member ID/ICA Number associated with the Merchant to ensure proper compliance reporting.
# Failure to adhere to these requirements may result in noncompliance assessments.
# The Acquirer is also required to retain all MATCH records related to any Merchant, Sponsored Merchant, or ATM owner for a minimum of two years post-agreement termination, as per Mastercard SPME §11.2.6.
# Additionally, Acquirers that store, transmit, or process personal data of residents in the European Economic Area (EEA), the UK, or Switzerland—or are otherwise subject to EU Data Protection Law—must comply with the standards specified in Appendix D concerning MATCH activity within the Europe Region, consistent with Mastercard SPME §11.7.1.
# Per the updated Mastercard SPME §2.4.1, Acquirers are required to properly manage their PIN Entry Device (PED) and Encrypting PIN Pad (EPP) inventories. This includes maintaining an up-to-date inventory of device types and locations, ensuring devices receive timely software security patches distributed by vendors, and conducting regular physical inspections by trained staff to detect tampering or substitution.
# Acquirers must also manage devices whose PCI PTS approvals have expired by moving them from approved lists to appropriate expired approval lists and ceasing their use for processing transactions if Mastercard issues a sunset date for specific device models.
- # These controls strengthen the security posture of Acquirers in line with Mastercard's risk management directives, helping to prevent device-related compromises.
+ # For Acquirers of government-owned lottery Merchants (see Mastercard SPME §9.4.4), additional due diligence is required. The Acquirer must obtain and retain a legal opinion acceptable to Mastercard regarding the legality of the Merchant's business.
+ # Furthermore, the Acquirer must provide certification from an independent qualified third party confirming that the Merchant's lottery systems effectively verify age and location and are designed to keep operations within legal boundaries including interstate transactions. Interested party certifications are not acceptable.
+ # The Acquirer must also certify that any changes to the information provided to Mastercard—such as regulatory changes, Merchant activities, or system updates—will be reported within 30 days with updated documentation.
+ # The Acquirer must affirm their responsibility not to submit restricted transactions for authorization from such Merchants prior to Mastercard's approval.
+ 
+ # These enhanced documentation and notification requirements align with Mastercard SPME §9.4.4 to strengthen compliance controls for government-owned lottery Merchant relationships.

Acquirer KYB (Know Your Business) Obligations

Acquirers processing transactions on the Mastercard network must perform Know Your Business (KYB) due diligence on merchants prior to onboarding and on a recurring basis. Halyard Pay is responsible for collecting and verifying required documentation to confirm business legitimacy, vet beneficial ownership, and satisfy anti-money laundering (AML) screening.

When this policy applies

This policy applies at initial merchant onboarding and during periodic re-verification reviews. Merchants that do not provide required documentation within set timelines must be suspended until compliance is restored.

Required actions

1. Collect all KYB documentation needed at onboarding.

2. Conduct AML screening against applicable watchlists before approval.

3. Verify business licenses for regulated merchant categories.

4. Schedule full re-verification at least annually.

5. Document verification outcomes and maintain records for audit.

6. Retain MATCH system records related to Merchants, Sponsored Merchants, or ATM owners for at least two years after contract termination or expiration, to meet Mastercard record retention requirements.

7. Before Merchant Agreement execution or enabling transactions, conduct a MATCH inquiry using Halyard Pay's Member ID/ICA Number to ensure compliance; failure may lead to Mastercard assessments.

8. For merchants whose personal data pertains to residents of the European Economic Area, the UK, or Switzerland, Halyard Pay must comply with EU Data Protection Laws as specified in Appendix D of the Mastercard SPME manual concerning MATCH activities in the Europe Region.

9. Maintain proper management of PED and EPP device inventories, ensuring devices receive timely software security patches and are physically tracked and inspected regularly for tampering or substitution. This includes keeping an accurate inventory of device types and locations, and training staff to conduct these inspections. Any device model sunset announcements by Mastercard must be adhered to, including ceasing use of such devices by the specified deadline.

10. For Acquirers onboarding government-owned lottery Merchants, additional KYB requirements must be met including:

- Obtaining and providing to Mastercard a legal opinion acceptable to Mastercard regarding the legality of the lottery operations.

- Securing certification from a qualified independent third party that the Merchant's systems include effective age and location verification and are designed to keep the business within legal limits, including for interstate transactions. Certifications from interested parties are not acceptable.

- Committing to notify Mastercard within 30 days of any changes to provided information such as legal opinions or certifications to keep records current.

- Affirming responsibility not to submit restricted transactions from such Merchants for authorization.

Mastercard approval of the registration is required before processing any government-owned lottery transactions for these Merchants, Sponsored Merchants, or associated entities.

Source authority: Mastercard SPME §§2.1, 2.4.1, 7.1, 9.4.4, 11.2.3, 11.2.6, 11.7.1.