A conventional merchant account termination triggers a sequence of events that extends well beyond the loss of the original processor relationship. Within a defined period after the termination, the processor that closed the account is required to report the termination to Mastercard if the reason for closure falls within the qualifying categories defined by the card network. Qualifying reasons include excessive chargebacks, fraud, and violation of acceptable use policies. Once the report is filed, the merchant is added to the Mastercard MATCH list and the principals are listed by name and identification information. Any acquiring bank that subsequently receives a merchant account application from the business or its principals will see the MATCH list entry and can use it as grounds for refusal.
The compounding effect comes from the combination of the immediate operational loss, the MATCH list placement that forecloses most conventional processor alternatives, and the fund holds that many processors impose at termination. Processors frequently place a hold on the terminated merchant's settlement funds as a buffer against anticipated chargebacks, which means the merchant loses payment processing and access to a portion of its recent revenue at the same time. 27 Blockchain's terminated merchant crypto payment solution addresses the immediate operational problem by deploying a functioning payment gateway on a timeline that does not depend on resolving the termination with the original processor, clearing the MATCH list, or waiting for held funds to be released.
