Mastercard's August/September 2023 BRAM program updates

In the fast-paced world of finance and digital transactions, staying up to date with regulations and industry standards is of paramount importance. Mastercard has recently rolled out updates to its Business Risk Assessment and Mitigation (BRAM) program. These updates, effective from August 15, 2023, are designed to help acquirers navigate the ever-changing landscape of legal requirements and emerging trends.  

In this blog post, we'll explore what these updates entail and why they matter.

Understanding the rationale

Mastercard's decision to update its BRAM program stems from a crucial observation: illegal activities that could potentially undermine the integrity of the payments ecosystem. The purpose of these updates is to equip acquirers with the information they need to ensure compliance with relevant laws and Mastercard's own high standards. By doing so, Mastercard aims to create a safer and more transparent environment for all stakeholders involved.

Reminders of responsibilities:

The updated program shines a spotlight on several concerning trends and seeks to remind their customers of their customers in keeping compliance as a high priority. One such trend is the rise of illegal online gambling activities. To address this, Mastercard advises acquirers to carefully review their merchant portfolios and take necessary action to ensure that merchants engaged in such activities adhere to both legal requirements and Mastercard's Standards.

Mastercard places specific emphasis on addressing miscoded gambling entities. To ensure compliance and avoid potential penalties, underwriters should make it a priority to consistently and accurately label transactions with the appropriate gambling MCCs. Moreover, meticulous labelling of all online transactions is essential to uphold the integrity of the payment ecosystem and adhere to Mastercard's standards. Mastercard reminds underwriters of the possible MCCs for gambling entities:

7800 (Government Owned Lottery [U.S. Region Only])

• 7801 (Internet Gambling [U.S. Region Only])
• 7802 (Government Licensed Horse/Dog Racing [U.S. Region Only])  
• 7995 (Gambling Transactions)  
• 9406 (Government-owned Lottery [Specific Countries])

Another significant concern is the sale of counterfeit and illegal goods on various online platforms. To combat this, Mastercard's Anti-Piracy Policy explicitly prohibits the sale of copyright-infringing and counterfeit products. Acquirers are urged to implement stringent controls to prevent the listing of such goods and swiftly remove any infringing listings.

Cannabis-Related Merchants

Mastercard addresses complaints around "cashless ATMs" and reminds their readers of the topic’s standards. These ATMs are being employed to facilitate the sale of potentially illicit products. This practice, wherein transactions are masked as cashless ATMs for the purpose of selling illegal items, contradicts Mastercard's standards of legality and transparency.  

To maintain compliance, underwriters must recognise that processing transactions associated with unlawful activities, especially those involving cannabis, is prohibited. Regardless of variations in state laws, cannabis retains its status as a Schedule I controlled substance under federal law in the U.S. It's imperative for underwriters to ensure that merchant descriptors accurately portray the business nature, avoiding any language that implies participation in illegal transactions. This involves reviewing merchants who may raise awareness about the cannabis industry without selling cannabis products and amending descriptors as necessary to eliminate ambiguity.

Adult content and deepfake content

Mastercard has updated its Adult Standards FAQs to provide clarity on consent and adult content. If consent cannot be established for content featuring an actual person, or if deepfake content is involved, it is considered a violation of Mastercard's adult content and services requirements. In other words, consent needs to be established for the deepfake. If that does not exist, then it is a violation. In such cases, the content must be either removed immediately or not published at all. If a disagreement arises regarding the validity of consent, underwriters should be aware that the merchant must resolve this dispute through a neutral body, potentially at their own expense. It's important for underwriters to understand that Mastercard considers a neutral arbitrator an acceptable entity for resolving such disputes.

Cheating the system

Mastercard has acknowledged concerns regarding essay mills, which are online platforms facilitating contract cheating—where a third party completes academic work for students. The UK's Skills and Post-16 Education Bill makes contract cheating services a criminal offense in specific educational settings. Mastercard emphasises the need for compliance with relevant laws and regulations, underlining its commitment to ensuring adherence to these standards.

Global regulatory insights

The BRAM program updates also include a wealth of valuable regulatory insights from different parts of the world. For instance, changes to gambling regulations in Hungary and Moldova are outlined, shedding light on the evolving landscape of internet gambling and sports betting transactions. Every business entity operating in Hungary has the chance to arrange telegaming, in accordance with local regulations, provided they adhere to the conditions stipulated by Hungary's Supervisory Authority for Regulated Activities. Also, Mastercard understands that every gambling merchant conducting operations in Moldova is required to possess a license issued by Moldovan authorities.

Additionally, updates related to foreign exchange trading in India and the regulation of essay cheat sites in the United Kingdom underscore Mastercard's dedication to ensuring compliance across various jurisdictions.

The path forward

In a rapidly evolving digital ecosystem, Mastercard's BRAM program updates serve as guidance for acquirers. By providing information about emerging trends, legal developments, and regulatory changes, Mastercard equips its partners with the knowledge they need to navigate the intricate world of financial transactions. Through these updates, Mastercard reaffirms its commitment to maintaining a secure, transparent, and compliant payments environment for all.

In conclusion, these BRAM program updates are a testament to Mastercard's proactive approach to compliance and industry leadership. As acquirers and stakeholders, staying informed and aligning with these updates is not just about following rules—it's about contributing to a secure and trustworthy financial landscape.

If you would like to know more avabout the update, speak to one of our experts at hello@webshield.com. We are here to help.