Visa classifies an entity that meets all of the following as a Marketplace:
•Brings together Cardholders and retailers on an electronic commerce website or mobile application
•Its name or brand is:
– Displayed prominently on the website or mobile application
– Displayed more prominently than the name and brands of retailers using the Marketplace
– Part of the mobile application name or URL
•Handles payments for sales and refunds on behalf of the retailers that sell goods and services through the Marketplace, and receive settlement for Transactions on their behalf
•Is financially liable for Disputes and resolves disputes between Cardholders and retailers by providing either:
– A decision that binds both Cardholder and retailer
– A money-back guarantee funded by the Marketplace
•Ensures that no retailer exceeds both:
– USD 10 million (R150m) in annual Visa volume through the Marketplace and 10% of the Marketplace’s annual Visa volume
The following Merchant types are not eligible to be Marketplaces or retailers using a Marketplace:
- Franchises, Travel agents and High-Brand Risk Merchants
- Charitable social service organizations, including crowd-funding merchants, are not eligible to be marketplaces or retailers on a marketplace, as Visa considers aggregated charitable and crowd-funding donation platforms to be merchants in their own right
In addition to the required content of a Merchant Agreement, an Acquirer must include all of the following in a Marketplace agreement:
•A requirement that the Marketplace and its retailers comply with the Visa Rules
•A requirement that the Marketplace enter into a contract with each retailer before it deposits Transactions on the retailer’s behalf
•The Acquirer’s right to prohibit individual retailers from participating in the Visa system and to immediately stop depositing Transactions for any individual retailer for good cause or upon Visa request
•Statements specifying that the Marketplace:
– Is permitted to process Transactions for retailers located in a different country to the Marketplace, and must ensure that Transactions are legal in the country of the Marketplace and of the retailer
– Is liable for all acts, omissions, Cardholder disputes, and other Cardholder customer service-related issues caused by the Marketplace’s retailers
– Is responsible and financially liable for each Transaction processed on behalf of a retailer
– Must not transfer or attempt to transfer, or permit the retailer to transfer or attempt to transfer, its financial liability by asking or requiring Cardholders to waive their dispute rights
– Must deposit Transactions only on behalf of retailers of goods and services that use the Marketplace’s website or application
– Must not knowingly contract with a retailer whose contract to accept Transactions was terminated at the direction of Visa or a government agency
Reporting Requirements
An Acquirer that contracts with a Marketplace must recertify annually that information provided to obtain written approval from Visa remains materially unchanged and inform Visa immediately if there is a material change in the information provided to obtain approval from Visa to treat the entity as a Marketplace. Visa approval is withdrawn if the Acquirer fails to comply with this requirement.
An Acquirer must, for an international Marketplace or upon Visa request, within 90 days of registration and each quarter thereafter, report to Visa all of the following:
•Total Marketplace Transaction value
•Total Marketplace Transaction value generated by retailers in the same country as the Marketplace
•Total domestic Marketplace Transaction value generated by retailers in a different country to the Marketplace
•Total international Marketplace Transaction value
An Acquirer that contracts with a Marketplace must comply with all of the following:
•Be in good standing in all Visa risk management programs
•Register the Marketplace as a Third-Party Agent with Visa
•Obtain written confirmation from Visa that the entity qualifies as a Marketplace
•Ensure that adequate due diligence is applied to retailers using a Marketplace and that risk management controls are in place to do all of the following:
– Prevent Transactions that are illegal in the location of the Marketplace, the location of its retailers, or the location of the Cardholder
– Prevent the sale of counterfeit products or goods that infringe intellectual property
– Provide a process to investigate and remediate rights-holder complaints
– Ensure that the Marketplace and its retailers are not engaged in any activity that could cause harm to the Visa brand
– Ensure compliance with all laws, regulations, requirements, and Visa Rules relating to anti-money laundering and anti-terrorist funding
•Ensure that the Marketplace complies with all Visa Rules relating to Merchants unless otherwise stated or unless the rule is inconsistent with a rule specific to Marketplaces
•Obtain from Visa a unique Marketplace identifier and include the Marketplace identifier in all Transaction messages
Manual Reporting Fee
VisaNet reporting is intended to automate and streamline reconciliation efforts for all parties involved (e.g., acquirers, marketplaces and Visa) and ensure that unique Marketplace Program benefits are granted in accordance with the scope of the program. In order to move away from manual reporting and toward improved data quality and increased reporting and reconciliation efficiency, effective 15 April 2023, Visa will charge an incremental per-transaction fee of 0.10% for any foreign retail transaction volume reported manually without use of the Foreign Retail Indicator.
Other Reminders
As a reminder, to determine the location of a marketplace retailer, an acquirer and marketplace must use the retailer’s principal place of business or an additional merchant outlet location. Details are provided in the Visa Rules (ID#: 0029455).
Additionally, all registered marketplaces must populate the marketplace identifier—the eight-digit Business Identification (BID) number provided at the time of registration—in all transactions. For details, see the Visa Business News article “Acquirers Must Provide Payment Facilitator, Marketplace and Sponsored Merchant Identifiers in Transaction Messages,” published 4 July 2019.
Definitions
An entity that deposits a Transaction, receives settlement from, or contracts with an Acquirer is classified as a Merchant if all of the following apply:
•The entity represents itself as selling the goods or services to the Cardholder.
•The entity uses its name primarily to identify its Merchant Outlet to the Cardholder.
•The entity provides recourse to the Cardholder in the event of a dispute.
Otherwise, the entity is classified as one of the following:
•A Digital Wallet Operator (DWO) or a Marketplace or a Payment Facilitator
Visa reserves the right to determine whether an entity is a Payment Facilitator, a Marketplace, a Merchant, or a DWO and may use additional criteria including, but not limited to, the entity’s name that appears on the Transaction Receipt and the entity that:
•Owns or takes possession of the goods or services, Books the sale as revenue and Provides customer service and handles returns