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Credit card companies have been able to store a lot of information on customers, merchants and banks in their databases. The Combined Terminated Merchant File (Combined Terminated Merchant Facility or MATCH database) is one of these extensive databases. Here is why a merchant should hope he doesn’t end up in the Combined Terminated Merchant File (CTMF).

What is a Combined Terminated Merchant File?

From time to time, a merchant account will be suspended or terminated. This could involve too many credit card processing chargebacks, errors or fraud. The modern credit card processing system connects an acquiring bank’s performance to the performance of each merchant account that it oversees. The Combined Terminated Merchant File is a list of all those businesses that have had serious problems in the past.

Why do Banks Keep Terminated Merchant Account Databases?

During a normal application to set up a business credit card account, the acquiring bank will want to check the business’s reputation. The CTMF is kind of like a database of businesses with bad credit scores. If a company is on the CTMF, it will have a tough time opening up a new credit card account.

Banking Profitability Requires Proper Risk Management

When credit card issuing banks discover a problem with a credit card account, they will notify the acquiring bank. The merchant has set up his account with the acquiring bank and must follow all of their rules and regulations. An acquiring bank can represent a business before the credit card companies, if necessary.

The acquiring bank relationship with a merchant is an example of shared responsibility and shared risk. Some acquiring banks might not want to add a business that has been known to violate the credit card processing rules before. At times, acquiring banks can also be penalized for the crimes of their member businesses.

Acquiring banks also have the power to add or remove merchants from the CTMF base. The business must get the acquiring bank to request an amendment or deletion of a CTMF entry.

Acquiring banks want to protect their investment of time, energy and money in setting up the merchant’s credit card account. They have set up the Combined Terminated Merchant File to minimize their risk and maximize their profits.