Acquiring banks across Europe are now navigating significant changes under Visa’s Integrity Risk Program (VIRP). As of April 1, 2024, Visa began charging a $0.02 per transaction Integrity Risk Fee, in addition to a 0.10% volume-based fee, for certain Merchant Category Codes (MCCs). These changes directly affect businesses operating in higher-risk sectors, including:
- 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
Timeline for VIRP updates
Visa has been phasing in updates to its risk and compliance framework over the past two years:
- May 1, 2023: Visa launched the VIRP, replacing the Global Brand Protection Program (GBPP). The new program introduced a tiered system categorizing high-risk merchants and enforced stricter due diligence and onboarding requirements
- October 1, 2023: Acquirers were required to obtain High-Integrity Risk Acquiring Registration before onboarding any HIR (High-Integrity Risk) merchant. Non-compliance could result in monthly fines of up to $100,000. Unregistered HIR merchants submitting transactions risked additional penalties of $2,000 per merchant.
- January 1, 2024: Visa updated its fee structure. The initial HIR merchant registration fee increased from $500 to $900, and annual renewal fees were introduced for all three tiers of high-risk acquiring.
- April 1, 2024: The latest update introduced the Integrity Risk Fee, adding cost pressure for acquirers and payment service providers working in sensitive MCC categories.
What the new Visa framework means for acquirers
Visa’s introduction of these fees underscores its commitment to protecting 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. This includes:
- Obtaining High-Integrity Risk Acquiring Registration before engaging with any HIR merchant.
- Ensuring all HIR merchants are registered before submitting transactions.
- Monitoring MCC classifications to detect changes in merchant business models.
- Factoring new fee structures and compliance controls into onboarding and monitoring processes.
If you would like any clarification on the subjects above or would like to know the implications for your business, please do not hesitate to contact one of our specialists. You can contact us here.