Streamlined compliance for payment providers

Merchant due diligence is a specialised part of customer due diligence and in extension, Know Your Business (KYB). It includes the initial and ongoing review of a company with which a payment provider like an acquiring bank is conducting business. It aims to verify the identity and authenticity of potential merchants to prevent financial crimes like money laundering and ensure compliance with card association rules like Mastercard's BRAM program or Visa's VIRP. Essential elements of merchant due diligence are the underwriting process at onboarding and ongoing monitoring.

A merchant is a company that sells goods or services to consumers or other businesses. When merchants want access to card payments for their business, they apply with an acquiring bank, payment service provider, or similar institution. This means they must complete an application process that collects key data like the merchant's address, directors, company registration, ultimate beneficial owner, and more. The bank or payment provider will then underwrite the merchant during the onboarding process.

For acquiring banks or other payment providers, underwriting means investigating a merchant and their websites for signs of fraud, non-compliance with card scheme rules or local regulations, and other risk factors. It traditionally involves reviewing all data provided in the merchant application. Merchant underwriting happens during the merchant onboarding process and culminates in accepting or declining a merchant application.

For acquiring banks or other payment providers, underwriting means investigating a merchant and their websites for signs of fraud, non-compliance with card scheme rules or local regulations, and other risk factors. It traditionally involves reviewing all data provided in the merchant application. Merchant underwriting happens during the merchant onboarding process and culminates in accepting or declining a merchant application.

Launched in 2005, the BRAM program is designed to protect Mastercard and its customers from illegal and brand-damaging transactions which may pose significant fraud, regulatory and legal risk or cause reputational damage. It is one of the two main rule sets Web Shield's solutions and underwriters work with.

In 2023, the Visa Integrity Risk Program replaced the Global Brand Protection Program (GBPP). The program formalises the rights and responsibilities of both Visa and connected acquiring banks around high-integrity risk merchants and illegal transactions. Among other obligations, acquirers must register merchants in specific sectors with Visa before signing them. It is one of the two main rule sets Web Shield's solutions and underwriters work with.

Web Shield is an official Mastercard Merchant Monitoring Service Provider. That means that Mastercard Principal Members can expect mitigation for penalties by Mastercard resulting from non-compliance issues.