Transactions from unregulated / unlicensed financial products merchants must be coded as online gambling transactions

VISA 01/09/2018

What is changing?

Visa had announced a global compliancy rule impacting the processing rules of all binary options and forex option trading merchants, effective 1st of December 2018. The rules have become more stringent due to lack of visibility on merchants operating unregulated or under unlicensed trading platforms. Visa wants to make it more insightful where these merchants trade, considering local laws, country jurisdictions and regulatory guidelines that prohibit the selling into certain markets.

What does the change mean?

Effective 1st December 2018, all binary options and forex trading merchants are required to code the following unregulated or unlicensed merchant types for gambling under MCC 7995 (Online Gambling):

  • Binary options and synonymous products
  • Rolling spot forex trading
  • Financial spread betting
  • Contracts for difference

New coding requirements

Only (existing) 6211 merchants that process in accordance with the Visa rules, which operate in regulated merchant trading platforms with the necessary licensing requirements in place for the countries/ regions where they are active; may continue to process under MCC 6211.

Should the 6211 merchant do not meet the requested requirements, they would need to reclassify to the applicable MCC of 7995.

Merchants coded under MCC 6211 must:

  • Be acquired in a market which requires licensing or regulates merchant trading platforms
  • Be licensed by the relevant financial services authority in the country or countries where their business is conducted
  • Comply with relevant legal requirements, including those related to complex speculative financial products

How will this affect you?

As a result of the new compliancy rule change, all existing binary options/ forex trading merchants will receive a further notification from their Account Manager/ Sales representative in due course, advising them of the required next steps. Binary options/ forex trading merchants will be required to start submitting the transactions under the reclassified MCC 7995, should they not meet the standards to continue processing under MCC 6211.

Effective date.

1 December 2018