Terminated Merchant File

February 10, 2022 | 9 min read

Terminated Merchant File TMF

The Terminated Merchant File: What it is & How to Avoid Being Added to it

Few phrases strike fear in a merchant’s heart like these three simple words: “terminated merchant file.”

If you discover that your business is on this list, then things have clearly gotten out of hand. It means your ability to process payments has just been revoked. You can’t process new payment card transactions. And, finding someone who’s willing to help you now just got a whole lot harder.

How does this happen? How do you go from a reliable business to a “high-risk” merchant who can no longer be trusted to process payments?

The simple answer: chargebacks. The primary reason why your business may end up in the terminated merchant file is due to excessive and repetitive chargebacks.

The best way to avoid this list is to understand it from all angles. In this post, we’ll look at how you can end up in the Terminated Merchant File (or TMF). We’ll look at what to do if it happens, and how you can prevent it from happening in the first place.

What is the TMF?

Terminated Merchant File

[noun]/* tər • mən • ā • ted • mər • CHənt • fīl/

The Terminated Merchant File (or “TMF” or “MATCH List”) is a log of merchants maintained by Mastercard. Merchants are added to the file if any of their MIDs are canceled for breaching standards set by the card schemes. When acquirers add a merchant to the TMF, it marks that business as a risky venture, warning other acquirers from doing business with them.

First, we should mention that “Terminated Merchant File” is an outdated term. Mastercard, who invented and maintains this list, rebranded it as the MATCH List, or “Member Alert to Control High-Risk Merchants” List. Different name, same idea.

The purpose of this list is to help banks identify high-risk merchants before agreeing to provide them with acquiring services.

Acquirers and processors in the Mastercard network consult the list before accepting a new merchant. If that merchant is on the list, their application will usually get rejected.

If you’re on the MATCH List, you may have a hard time finding processors willing to establish a working relationship with you. There are some payment processors who accept high-risk merchants. However, these companies usually offset the risk with higher fees and stricter requirements.

We should also mention that you probably won’t even be notified before being added to the TMF. Most merchants find out they’re on the list after their payments suddenly start getting denied, or when they try to apply for a new account and get rejected.

Why is My Business Listed in the Terminated Merchant File?

9 times out of 10, your business makes it into the Terminated Merchant File because of excessive chargebacks. This would be one of those chargeback consequences that we talk about all the time on this blog. If your chargeback-to-transaction ratio gets too high, you’ll end up in the TMF.

Other conditions and practices that can lead to this are categorized with a specific Terminated Merchant File MATCH list reason code. These are not to be confused with chargeback reason codes, which are a separate thing.

The reasons for being MATCHed can include having insufficient or ineffective security measures that result in data compromises. It can also include engaging in illegal activities like fraud or transaction laundering:

Reason Code Title Reason Code Explanation
Reason Code 01 Account Data Compromise Account data is stolen from the card-present merchant and used with other merchants.
Reason Code 02 Common Point of Purchase Account data is stolen from the card-present merchant and used with other merchants.
Reason Code 03 Laundering The merchant processed transactions that did not involve a bona fide cardholder.
Reason Code 04 Excessive Chargebacks The merchant breached predetermined chargeback thresholds.
Reason Code 05 Excessive Fraud The merchant breached predetermined fraud-to-sales dollar volume thresholds.
Reason Code 06 Currently unused --
Reason Code 07 Fraud Conviction One of the business's owners was convicted of criminal fraud.
Reason Code 08 Mastercard Questionable Merchant Audit Program The merchant is labeled a “Questionable Merchant,” as determined by MasterCard guidelines.
Reason Code 09 Bankruptcy, Liquidation, Insolvency The merchant is unable to discharge all financial obligations.
Reason Code 10 Violation of Standards The merchant was in violation of one or more of the card network’s regulations.
Reason Code 11 Merchant Collusion The merchant participated in fraudulent collusive activities.
Reason Code 12 PCI-DSS Non Compliance The merchant wasn’t compliant with PCI-DSS requirements.
Reason Code 13 Illegal Transactions The merchant processed illegal transactions.
Reason Code 14 Identity Theft The business owner’s identity is in question.

You Can Be Added to the TMF…Even if it’s Not Your Fault.

Clearly, some of these reason codes apply to matters outside of your control. Take cases of identity theft and data breaches, for example. It might seem a bit harsh to punish merchants for things that are not fully under their control.

Then again, many of these reason codes affect merchants who are simply hammered with chargebacks every month. And, no matter how honest or hardworking you might be, fraud and chargebacks can—and will—still happen.

Chargebacks happen...but they don't have to.


We should also point out that banks have no real choice in the matter, according to the Mastercard Security Rules and Procedures. If they terminate a merchant relationship based on one of these conditions, the bank is obligated to add that merchant to the MATCH list within five days of termination.

It’s also important to note that, while Mastercard lays out and sets the parameters for acquirers to follow, they don’t really offer much direct oversight. There’s not much room for recourse if you feel you’ve been judged unfairly. You may not appeal the bank’s decision with anyone but that bank, and there are usually steep hurdles to prevent you from meeting their demands.

Consequences of Being a TMF-Listed Merchant

Like we mentioned earlier, you can still work with banks and processors that specialize in serving high-risk merchants. They tend to be more restrictive, though, and can be significantly more expensive.

You can't get around being listed in the Terminated Merchant File, either. Your business name, its principal signers, your address, and other pertinent information are all recorded in the TMF.

Remember, having your account terminated is never a good look. Other processors and financial institutions may refuse to do business with you. Those that are still willing to take you on may charge exorbitant fees to offset the added risk. You’d be committing merchant fraud if you attempt to circumvent your terminated merchant account to process payments under a false name.

Your business will die without the ability to process payments. That’s why we can’t stress enough the importance of getting a handle on any of the factors which may be contributing to your higher-risk ranking.

How Do I Get Removed from the TMF or MATCH List?

Merchant data will be removed from the Terminated Account List five years after your most recent Terminated Merchant File entry. This is the only guaranteed way to get off the list.

There are only two other circumstances under which MATCH removal might potentially happen:

  • The acquirer contacts Mastercard on your behalf and reports the original addition was made in error.
  • You were added using MATCH list reason code 12 (PCI-DSS Non Compliance), but have since become compliant.

Even within those conditions, the road to Terminated Merchant File removal can be long and difficult, with little chance of success. If you were added to the list by mistake, your only option is to contact the acquiring bank with evidence of the error.

The bank may decide to remove you from the list if they made an error. Whether they do or not though, will depend on the quality of the evidence, and the bank’s own discretion.

In the end, the only sure way off the list is time. To survive, you may have to optimize your business model to compensate for higher processing fees. It’s also imperative that you minimize risk as much as possible. Another canceled account means the five-year clock starts all over.

How Do I Avoid Being Added to the Terminated Merchant File?

The simplest solution is to immediately address whatever concerns that led the acquiring bank to add your business to the list in the first place. If that succeeds, all that is left to do is learn from the situation and ensure the issue never arises again.

What if your business is afflicted with successive chargebacks every month, though? In that case, the wisest move you can make is to boost your prevention efforts.

Pro Tip:
The best way to avoid the TMF is with a dynamic chargeback strategy designed to prevent as many chargebacks as possible.

Smart chargeback prevention can help you eliminate chargebacks from your daily operations and drastically lower your overall chargeback ratio. Having a solid strategy to help fight and recover from chargebacks can go a long way toward stabilizing your reputation with cardholders and banks. It will also help repair your relations with payment processors.

You have to get a handle on the complicating factors that are increasing your merchant risk. Otherwise, the likelihood that you’ll be stuck forking over higher penalties and fees will increase.

Expert Help to Protect Your Merchant Account

As stated above, we spend a lot of time on this blog trying to warn merchants about the repercussions of ignoring chargebacks. It’s never a good idea to ignore or avoid chargebacks, even when their relative value might be low.

Remember: your chargeback ratio is being tracked…even if you’re not the one doing it.

Chargebacks911® can help manage chargeback risk, insulating you against both international and domestic chargebacks. We have a full slate of tools and strategies avialable that can help keep chargeback issuances low.

Contact Chargebacks911 today for professional support and proven-effective solutions.

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