9700 Automated referral service (for visa only)

Introduction

• What it is: This MCC code is used for businesses that provide automated referral services.
• Risk level: Medium — The automated nature can lead to higher fraud risks.
• Acceptance difficulty: High — Providers may face challenges with securing approvals.
• Typical business models: online lead generation; call centers for service referrals; automated matchmaking services.
• For merchants: Approval processes can be stringent; potential for higher MDR; may require a reserve for chargebacks.
• What PSPs expect: Comprehensive business model description; transparency in lead generation practices; robust fraud prevention measures.

Payment Insights & Benchmarks

Merchants in this MCC should anticipate unique payment dynamics that differ from standard e-commerce. The nature of automated referral services can lead to variability in acceptance rates and payment processing experiences.

Payment methods

Visa Cards: primary method, but some issuers may impose additional scrutiny.

• E-wallets: less commonly used, but viable for certain customer segments.
• Bank Transfers: often slower, subject to additional verification.
• Alternative Payment Methods: might be less accepted, varying with merchant preferences.

Authentication & security

3D Secure (3DS) is frequently required for card transactions to mitigate fraud risks.

• Ensure robust customer authentication as modern fraud patterns evolve.
• Monitoring for unauthorized use is essential to manage chargebacks effectively.

Benchmarks (indicative, not guaranteed)

MDR: potentially higher than typical e-commerce due to risk factors.

• Rolling reserves: may be significant depending on transaction volumes.
• Settlement cycles: often extended compared to traditional retail setups.
• Chargeback ratios: likely exceed standard rates; proactive management needed.
• Card approval rates: often lower, especially if high-risk patterns are detected.

Key metrics to monitor

Authorization rates per payment method and issuing bank.

• Chargeback ratios segmented by reason (fraud, service issues).
• Average transaction value and frequency for patterns.
• Customer acquisition costs versus transaction profitability.

Risk & Compliance

Merchants categorized under this MCC face heightened scrutiny due to the potential for financial manipulation and fraud. Payment service providers (PSPs) and acquirers enforce strict compliance measures to mitigate risks associated with customer disputes, chargebacks, and regulatory requirements.

Chargebacks & fraud

Common types of fraud include friendly fraud where customers falsely claim unauthorized transactions, as well as account manipulation and promotional abuse.

• Dispute patterns may involve high chargeback rates attributed to misrepresented services or dissatisfaction with referral outcomes.
• Effective mitigation tools consist of transaction monitoring, device fingerprinting, and behavioral analytics to detect anomalies in user behavior.

AML/KYC expectations

Robust identity verification processes are required, including document checks and validation against sanctions lists.

• Merchants must monitor and verify the sources of funds, particularly for large transactions or those that deviate from the user's normal spending patterns.
• Manual review triggers include excessive referral payouts, sudden spikes in account activity, and the use of VPNs or other masking technologies.

Operational red flags

Lack of transparency regarding ownership and the stakeholders behind the referral service can raise concerns for PSPs and acquirers.

• Unusual traffic sources, particularly from regions with high fraud risk or unverified affiliates, may be indicative of compromised accounts.
• Absence of a clear refund policy or guidelines on dispute resolution may lead to operational issues and customer dissatisfaction.
• Insufficient compliance structures for monitoring transactions may lead to increased liability and noncompliance with AML standards.

Onboarding Checklist

Merchants under the Automated Referral Service (For Visa Only) MCC should prepare a complete onboarding package before approaching PSPs or acquirers. A well-structured submission improves approval chances and shortens review times.

Legal & corporate documents

company registration and incorporation documents

• disclosure of beneficial owners (UBO) and corporate structure
• valid licenses for the relevant business activities
• policies: Terms of Service, Privacy, AML/KYC, Refund Policy

Financials & risk management

recent financial statements and cashflow forecasts

• liquidity or reserve model for payouts
• description of antifraud setup and monitoring tools

Product & marketing

demo access or screenshots of the live platform

• marketing plan and traffic source overview (affiliates, SEO, PPC)
• geographic targeting information
• KYC flow details, including IDV providers and thresholds

Technical integration & security

payment architecture overview with supported methods/providers

• description of SCA/3DS flows, retry logic, and tokenization
• PCI DSS compliance status and data storage policy

Operations

customer support coverage (languages, 24/7 if available)

• SLA for dispute handling and chargeback response
• deposit, bet, and payout limits; self-exclusion mechanisms
• internal process for chargeback investigation and documentation

Regulation & Licensing

Licensing and certification are essential for merchants classified under this MCC, as payment service providers (PSPs) require proof of compliance to ensure secure and legitimate operations. The recognition of licenses can vary significantly based on the merchant’s jurisdiction and the markets they serve.

Operator licenses

Visa membership — necessary for merchants to process transactions through Visa's network, including adherence to their operational standards.

• State licensing where applicable — some jurisdictions require specific licenses for referral services, ensuring compliance with local laws.
• Consumer protection certifications — often sought to demonstrate adherence to consumer rights and protection regulations.
• FinTech regulatory approvals — may be needed if the merchant uses technology solutions that fall under financial regulations.

Geo-restrictions

Restrictions based on country-specific regulations can limit operations, particularly in areas with strict financial service laws.

• Certain regions may only allow referral services under specific conditions, which differ from one jurisdiction to another.
• Some PSPs may refuse to onboard merchants from jurisdictions with high levels of fraud risk or inadequate regulatory frameworks.

Certifications & audits

PCI DSS compliance is critical for managing card data transactions safely.

• Regular compliance audits to ensure operational transparency and adherence to Visa's standards.
• Consumer protection audits to confirm the merchant's commitment to fair practices and regulatory compliance.
• Mandatory financial audits may be required to maintain licensing in certain jurisdictions.

Official Definitions & Network Comparisons

This section shows how major card networks define this MCC and highlights practical differences that affect merchant onboarding.

Explanation:

Visa specifically describes this MCC as an "automated referral service" linked to financial products, indicating that it has distinct requirements. Other networks may not explicitly define this MCC, leading to potential confusion in categorization. This lack of clarity can complicate onboarding, as services might need to fit into broader classifications. Common rejection issues may arise from insufficient licensing and compliance with network-specific operational rules.

Alternative MCC Codes

Merchants often confuse this MCC with other categories. The table below shows which codes are related, why they are confused, and what risks misclassification brings.

Rule of thumb for merchants:

Always select the MCC that best describes the primary function of your business. Using the most accurate code minimizes compliance risks and helps to maintain a good standing with payment networks, avoiding potential account issues.

Best Practices for Merchants

Merchants under the Automated Referral Service (MCC 9700) must prioritize clarity and reliability in their operations to foster trust and reduce risk. Adopting the following best practices can help in enhancing payment acceptance and minimizing disputes.

Classification & transparency

ensure accurate use of MCC 9700, as misclassification can lead to account termination

• clearly outline service details, fees, and terms on the website to maintain transparency
• provide comprehensive information and support options to users

Fraud & chargeback reduction

integrate 3DS or step-up authentication for transactions flagged as high-risk

• utilize clear billing descriptors and send confirmation messages for each referral transaction
• maintain detailed logs of referral activities and transactions to facilitate dispute resolution

Payment acceptance optimization

diversify payment options, including cards and digital wallets, to meet user preferences

• analyze transaction data to optimize routing based on user geography and behavior
• test various payment service providers (PSPs) to find the best performance for your specific needs

Operational discipline

establish KPIs encompassing referral conversion rates, chargeback rates, and transaction volumes

• conduct regular audits to ensure compliance with internal policies and industry standards
• create a structured approach for managing disputes, with a designated team responsible for follow-ups

Payouts & liquidity

keep sufficient reserves to manage rolling reserves and potential payment delays

• implement automated checks for transactions to identify suspicious activities promptly
• regularly review payout timelines and liquidity processes to ensure smooth operations

Business Scope & Examples

This MCC encompasses businesses that provide automated referral services, primarily for Visa card transactions. Merchants under this category typically facilitate the connection between service providers and consumers, assisting in transactions without directly offering the services themselves. The focus is on businesses that utilize technology to automate referrals and process related payments.

Models

online referral platforms for various services (e.g., home services, healthcare)

• automated lead generation services for financial products (e.g., loans, credit cards)
• digital marketplaces that match consumers with local service providers
• affiliate marketing platforms that promote services or products through automated systems

Borderline cases

Traditional marketing agencies — firms that provide manual lead generation or promotion may not fit this MCC, as they don’t utilize automated systems.

• Comparison websites — sites that allow consumer comparisons of products but do not manage transactions directly; they may be classified differently based on their payment processing.

Signals for correct classification

services offered primarily involve automated referral processes

• merchants collect payment only for referral services, not for the end product or service
• platform automates the user journey from service discovery to payment processing