Providing the Proper Location of Your Merchant Business

We recently received some guidance from Visa clarifying their rules that require merchants to submit complete data about their business, including the name, the type of business, and the merchant location.

This is important because it helps with:

  • Cardholder recognition, which can reduce unnecessary cardholder disputes when they don’t recognize your business name on their credit card statement.
  • Accurate risk assessment and authorization decisions.
  • Accurate assessment of your fees and interchange rate.

Providing this information is important for the kinds of transactions you process.

Signposts from Iceland. If you're a retail merchant, there are certain rules about providing your business location in your merchant information on your Visa account. When it comes to card-present transactions, the transaction information given to the cardholder is based on the merchant’s location. For most small merchants — a single restaurant, a coffee shop, a small retail store — the headquarters location is the same as the principal place of business.

But when a merchant is not in a fixed location, such as a food truck, mobile chiropractor, or mobile car repair service, there are certain rules about where your “location” actually is.

In these cases, your information has to include where the transaction is completed, or the location of your principal place of business (i.e. your official business address).

But if you’re providing an in-transit transaction, such as an in-flight purchase, then your transaction information has to include one of these: 1) Where the journey originated, 2) the interim or final destination, or 3) the location of your principal place of business.

For card-not-present (CNP) transactions, such as over the phone, online, or in-app purchases, then the location must be the country of your principal place of business, NOT the location where the transaction took place.

You can assign additional locations for the following exceptions, however.

  • Airlines, trains, cruises, and other travel merchants should list the location from the country where the first leg of the purchased travel originates. So if a cruise starts in Florida and ends in Mexico, then the U.S. is the country of origin.
  • A hotel or lodging merchant should list the location where the cardholder’s stay occurs. So even if your headquarters are based in one country, and your hotel is in another, the hotel is considered the location.
  • For rental cars, taxis, and ride services, the location is the country where the traveler rented the car or wherever the journey originated. So, renting a car in Sweden and driving to Norway means the location is in Sweden.

For any other merchant and their permanent location, Visa has this to say about the matter:

1. The merchant has a permanent location where the merchant conducts business activities and where its employees or agents accountable for the sale or distribution of the goods or services purchased in the specific transaction work.

Note that the following do not, in themselves, satisfy the above criteria:

  • A post office box, mail-forwarding address, the address of the merchant’s law firm, agent or vendor, or an email address.
  • The location of a payments or customer-service function, servers or URL, or the presence of a director or investor.

2. The merchant assesses sales taxes on the transaction activity.

3. The location is the legal jurisdiction, for the transaction, that governs the contractual relationship between the merchant and the cardholder as the purchaser of the goods or services.

Finally, Visa requires that this information is consistent across all transactions, including authorization requests, clearing, returns, and disputes.

Ultimately, this consistency helps you as a merchant because it reduces the number of credit card disputes and chargebacks from customers who may not otherwise recognize a charge on their credit card statement. Your detailed and correct information on a transaction can help remind them of the purchase they made and who they made it from. If they can do that, they’re not as likely to call their bank to dispute a charge.

If you would like to learn more about why and how you should provide your merchant location to Visa, or any other questions about credit card processing, Corepay can help. To learn more, please visit our website or call us at (866) 987-1969.

Photo credit: Thomas Quine (Wikimedia Commons, Creative Commons 2.0)