Visa Expanding Categories of High-Brand Risk Merchants in October
Starting on October 17, 2020, Visa is expanding the categories of merchants they’re identifying as High-Brand Risk (HBR). Merchants in these new High-Brand Risk categories are required to register with Visa before they can process any transactions.
One notable change is MCC 7273 – Dating Services (Any card-absent transactions, also called Card Not Present (CNP) transactions).
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According to Visa’s directive on the issue, Dating Services includes “Dating & escort-related services; examples include online classified ads including escort services or monthly subscriptions to dating websites.”
So this includes not only dating sites like Tinder or FindaGinger.com, but real-world escort services and traditional dating services as well. And since any online or over-the-phone transaction is considered card-absent/card not present, any credit card transaction is going to put you into that high-brand risk category.
That means that all merchants — dating sites or otherwise — with CNP transactions must meet these requirements:
- Implement Age Restrictions – electronic verification online.
- Merchant Category Code (MCC) must be 7273 – some merchants may require MCC updates.
- Subscription Merchant Transaction Policy Updates.
- Visa HBR registration by 17 April 2021.
And if you have a subscription model with introductory trials and promotions, like free 7-day trials, you have to follow these additional requirements:
- Express Consent
- Explicit Transaction Receipts
- Easier Cancellation
- Enhanced Notification
- Statement Descriptors
- Expanded Dispute Rights
Finally, there’s the matter of the fee schedule:
- Registration fees are $500 per merchant annually;
- Annual renewal billing will occur each September;
- To avoid the renewal fee, merchant must submit all termination requests by September of each year.
What are Other High-Brand Risk Categories?
Other categories that are also included in Visa’s High-Brand Risk services include:
- MCC 5962: Direct Marketing, Travel-Related Arrangement Services Sale of travel-related services such as timeshares and discount vacation travel clubs via outbound telemarketing calls or mass emailing.
- MCC 5966: Direct Marketing, Outbound Telemarketing Merchant Sale of products or services using outbound telemarketing; examples include services such as unsolicited tech support desks or credit card protection.
- MCC 5967: Direct Marketing, Inbound Teleservices Merchant Adult content and merchant services such as website subscriptions and video streaming.
- MCC 7995: Betting, including Lottery Tickets, Casino Gaming Chips, Off-Track Betting, and Wagers at Race Tracks Funding for games of chance such as placement of wagers on an outcome or purchase of chips at a gambling establishment.
Photo credit: Wiros (Wikimedia Commons, Creative Commons 2.0)