Visa Integrity Risk Program Update

One of the biggest shakeups for high-risk merchants took place on April 1, 2024, with the update to the Visa Integrity Risk Program. There has been plenty of lead-up to this going live, yet there has been a massive impact on companies across the board in the high-risk space.

To quickly summarize what has taken place, VIRP has cracked down on those in the high-risk space that haven’t been playing fully by the rules. In turn, this has also hit many businesses doing things the right way in the high-risk space, making it challenging to secure processing for plenty of legitimate companies.

Merchants in the following industries will find it harder than ever to find reliable payment processing:

  • Adult, online dating/escort, pharmaceuticals including weight loss/peptides, coaching, credit repair, CBD, vape, and online gambling.

For those companies that are startups, you will likely need a minimum of 90 days of processing experience before being approved with a direct high-risk merchant account.

What To Know About The VIRP Program As Of April 1, 2024

  • High-risk merchants fall under the classification of High Integrity Risk Merchants and are divided into three tiers based on their business type and level of risk.
  • Acquirers that support high-integrity risk merchants must undergo control assessments to ensure effective oversight and control processes. In order to mitigate the risks associated with these merchants, acquirers may impose significantly higher fees than previously.
  • Adult, dating/escort, gambling, and pharmaceutical merchants face the most scrutiny and are classified as tier 1 under the VIRP.
  • Visa and Mastercard mandate that all pharmacies and telemedicine providers processing card-not-present transactions must be certified and monitored by an approved certification organization, such as LegitScript.
  • VIRP imposes higher registration fees for high-risk merchants, increasing from $500 to $950.
  • The VIRP program encompasses registration fees, transaction fees, and adjustments aimed at covering operational costs and preventing illegal transactions within specific merchant categories.
  • VIRP replaces the GBPP and focuses on integrity risk rather than brand risk.
  • Obtaining a High Integrity Risk Merchant has never been more challenging, and merchants must show they run a legitimate business.

Visa Global Brand Protection Program Vs VIRP

The VIRP mandates that Acquirers and their appointed agents enforce rigorous controls and oversight measures to minimize illicit transactions within the Visa Payment System. A significant alteration is the VIRP’s implementation of elevated registration fees for high-risk merchants, rising from $500 to $950. This adjustment underscores Visa’s dedication to preserving a secure and dependable payment environment.

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Three Tier Levels for High-Integrity Risk Merchants (VIRP)

Under the Visa Integrity Risk Program, there are three distinct tiers for High Integrity Risk Merchants. 

Each tier mandates specific control measures to mitigate potential illegal activities, and you are now required to register for one of the three tiers.

Tier 1

These businesses are companies that could harm individuals’ health, safety, and well-being.

The industries that are deemed tier 1 are:

  • Adult, dating/escort services, online gambling/sports betting, and pharmaceuticals/weight loss.

Tier 2

While Tier 2 doesn’t encounter the same level of scrutiny as Tier 1, these industries remain highly precarious from the viewpoint of payment processors and acquiring banks.

The following are considered tier 2:

  • Crypto trading platforms: MCC 6051, 6012
  • Online storage services: MCC 4816
  • Skill-based gaming: MCC 5816

Tier 3

  • Trading platforms, telemarketing, negative option billing, and even tobacco sales.

Registration Fees

The initial registration fees have surged from $500 to $950, marking a significant increase attributable to added operational expenses associated with merchant evaluation and registration. Visa has implemented an Integrity Risk Fee, comprising a fixed charge of 10 cents per transaction and an extra ten basis points appended to the processed transaction volume. This fee is exclusively applicable to merchants falling within specific category codes.

Transaction Fees

Below is a quick look at what you can expect for fees under the Visa Integrity Risk Program.

1. Visa Integrity Risk Fee: This fee is a new addition targeting specific high-risk merchants. It consists of a fixed charge of 10 cents per transaction and ten basis points applied to your processed volume.

2. Application to Specific MCCs: These fees apply to specific Merchant Category Codes (MCCs), such as adult entertainment, online gambling, and dating services.

Acquirers of High Integrity Risk Merchants undergo Visa control assessments.

Per Visa’s directives, if an acquirer was formerly enrolled under the GBPP and handled transactions for merchants within VIRP merchant categories within the past year, they retain the privilege to continue acquiring those specific merchant types. However, they will also undergo periodic control evaluations contingent upon the merchant category type.

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