Visa Integrity Risk Program: European Pricing Changes

A significant policy adjustment is on the horizon for acquiring banks. As of April 1st, Visa will levy a Visa Integrity Risk Fee of USD 0.02 per transaction for specific MCC categories. These are:

• MCC 5967 - Direct Marketing - Inbound Teleservices Merchant
• MCC 6012 - Financial Institutions - Merchandise, Services, and Debt Repayment
• MCC 6051 - Non-Financial Institutions - Foreign Currency, Liquid and Cryptocurrency Assets
• MCC 7273 - Dating Services

These alterations build upon prior significant adjustments. Commencing October 1, 2023, Visa initiated updated non-compliance assessments (NCAs) for the Visa Integrity Risk Program (VIRP). This necessitated acquirers to seek High-Integrity Risk Acquiring Registration before engaging with High-Integrity Risk (HIR) merchants. Effective January 1, 2024, Visa revised initial application fees and introduced an annual renewal fee for HIR acquiring for all three tiers. Also, the initial registration fee for each high-risk merchant increased from $500 to $950.

Visa's compliance overhaul

On May 1, 2023, Visa introduced the Visa Integrity Risk Program (VIRP) to replace the Global Brand Protection Program (GBPP), focusing on managing risks for high-risk merchants. VIRP categorised merchants into three tiers based on risk levels, setting clear registration requirements for acquirers and their agents. It mandated due diligence for third-party agents and identified high-integrity risk Merchant Category Codes for card-not-present transactions. For detailed guidance, merchants could refer to the VIRP guide and Visa Business News.

Non-compliance becomes more expensive

The VIRP's primary objective is to ensure that acquirers and their designated agents maintain robust controls and oversight processes to prevent illegal transactions from infiltrating the Visa payment system. As part of this program, merchants were designated as High-Integrity Risk (HIR) if they operate in business areas with heightened risks of processing illicit transactions without proper controls.

Effective from 1st October 2023, acquirers were required to apply for a High-Integrity Risk Acquiring Registration to contract with HIR merchants. Failure to comply could result in Non-Compliance Assessments (NCAs) of up to $100,000 per calendar month of non-compliance. Additionally, all HIR merchants had to be registered with Visa before submitting transactions, with non-compliance potentially resulting in NCAs of $2,000 per merchant identified per calendar month.

What the new Visa framework means for acquirers

Visa's introduction of these fees underscores its commitment to enhancing the integrity of the payment ecosystem and managing inherent risks. Acquiring banks need to ensure strict compliance with the VIRP guidelines to avoid financial penalties and reputational damage. Compliance includes obtaining High-Integrity Risk Acquiring Registrations for dealing with HIR merchants and registering all HIR merchants before transaction submissions. Failure to adhere to these requirements could result in substantial Non-Compliance Assessments, negatively impacting the bank's financial stability and industry reputation.

If you would like any clarification on the subjects above, or if you want to know the implications for your business, please feel free to get in touch with one of our specialists. You can arrange a call here.