Transaction laundering: what Visa’s rules, US bank examiners and federal rules prohibit

What transaction laundering is

A merchant account is opened for one business, after the acquirer has reviewed that business: what it sells, where, through which websites and at what volume. Transaction laundering is when card sales of a different business go through that account. The business whose sales are processed was never reviewed by the acquirer and does not appear on the cardholder’s statement under its own name.

Visa’s rules use the single word laundering. In the US merchant agreement requirements it is a transaction that does not result from an act between the cardholder and the merchant, or between the cardholder and a sponsored merchant. In the Terminated Merchant File rules it is depositing transaction receipts for goods or services generated by another merchant.

The US bank examiners’ handbook on merchant processing, published by the Office of the Comptroller of the Currency, gives two related terms. Laundering, sometimes called draft laundering, is a merchant that holds an account with an acquirer submitting drafts for a merchant that does not; the handbook says the account holder typically receives a percentage of the other merchant’s sales. Factoring, or credit card factoring, is processing transactions through a merchant account for a business other than the one that was screened and set up for it.

What Visa’s rules require

The prohibition sits at several points in Visa’s rules of 24 October 2026:

• Merchant agreement (section 5.2.1.4, Table 5-1, US Region): every merchant agreement must include a prohibition against the merchant depositing a transaction that does not result from an act between the cardholder and the merchant or a sponsored merchant.
• Payment facilitator agreement (section 5.3.1.1): the agreement must state that the payment facilitator must not deposit transactions on behalf of another payment facilitator.
• Termination (section 1.9.1.4): Visa may permanently prohibit a merchant, payment facilitator, sponsored merchant or other entity, or one or more of its principals, from the Visa program for reasons that include laundering.
• Listing (section 10.10.1.1): an acquirer must add a merchant terminated for laundering to the Terminated Merchant File, no later than close of business on the day after the merchant is notified of the intent to terminate.
• Investigation and reporting (sections 10.3.1.1 and 10.3.1.2): a member must investigate suspected or confirmed fraud or laundering of a transaction and report it to Visa immediately.

The same termination section also names entering into a merchant agreement under a new name with the intent to circumvent the Visa rules. Reopening under a new name to get around the rules is a reason for termination in its own right.

What US examiners and federal rules say

The examiners’ handbook explains why acquirers treat laundering as a risk to themselves: an acquiring bank is potentially liable for losses caused by merchant fraud, and if a merchant ceases to operate or disappears, the acquirer is responsible for any remaining chargebacks. It lists deposits for goods or services generated by another merchant, laundering or factoring, among the reasons for placing a merchant on Mastercard’s MATCH list, and notes that several states’ criminal statutes prohibit laundering.

The federal Telemarketing Sales Rule, section 310.3(c), covers sales made by telemarketing. Except as expressly permitted by the applicable card system, it is a violation for a merchant to deposit a card sales draft that is not the result of a telemarketing card transaction between the cardholder and that merchant, for anyone to cause a merchant to do so, and for anyone to gain access to the card system through a business relationship or affiliation with a merchant when the merchant agreement or the card system does not authorise that access.

When one business sells through several websites or brands

The rules are written around the business the acquirer reviewed. What a merchant can do is make sure the account matches the business that actually sells:

• Disclose every website, brand and product line that will take card payments on the account, in the application and whenever a new one is added.
• Keep the name customers see on their statements tied to the business they bought from, so a cardholder can recognise the charge.
• Accepting payments for other businesses is a role of its own: Visa’s rules provide for it through payment facilitators and marketplaces, which the acquirer contracts and is responsible for. A merchant account does not turn into one by agreement between two merchants.
• If an acquirer asks why sales on an account do not match the reviewed business, answer with the facts and documents; the acquirer decides what follows.

Card-network rules and contracts change. Mastercard publishes its own rules; its public rule books refused automated reading on the day this guide was written, so they are not quoted here.

How this relates to an application on Zolution

Providers on Zolution review applications against their own underwriting, and the provider decides. An application that describes the business, its websites and its products accurately is the one the account will be reviewed and priced on. Zolution Standard membership costs nothing.

Questions, answered