Elevated risk patterns in merchant behavior

Protecting the payment ecosystem against fraud and other prohibited merchant activity depends on timely and reliable detection. Acquirers need to be able to spot risk indicators in merchant behavior during underwriting and after onboarding. 

But prohibited activity is becoming increasingly migratory, with illicit operators adapting quickly and relocating across borders in response to regulatory differences and enforcement pressure.

Visa has detected and identified prohibited merchant activity in 19 countries in Africa, the Gulf Cooperation Council (GCC), Southeastern Europe and Central Asia ¹. The geographic spread of these threats underscores the need for effective risk controls, continuous monitoring, and adaptive risk management across the ecosystem.

Visa has helped strengthen the integrity of the payment ecosystem in central Europe, the Middle East and Africa (CEMEA), as well as globally. Between April 2023 and December 2025, we addressed more than $1B in prohibited payment volume ², reflecting the impact of continued monitoring and ongoing collaboration with our clients and partners.

But merchant risk persists and continues to evolve. Globally identified non-compliant merchant activity increased 1.5x between January 2021 and December 2025 ³, driven by online merchants offering prohibited or miscoded unlawful products and services, including:

• Online gambling
• Scams
• Prohibited pornography
• Counterfeit pharmaceuticals
• Designer drugs
• IP-infringing goods
   

In CEMEA, prohibited gambling is the leading integrity risk, accounting for 80% of Visa Integrity Risk Program (VIRP) violations ².

When we talk about elevated risk patterns in merchant behavior, we're referring to merchant transactions and operational activities that deviate from expected norms—and may therefore indicate potential fraud, scams, prohibited transactions, money laundering or other deceptive practices. 

Behavioral patterns that may indicate elevated risk include:

• Sudden spikes in transaction volume
• High rates of declined authorizations
• Excessive levels of fraud or disputes
• Unusual transaction amounts
• Changes in the ratio of card-present to card-not-present sales
   

Acquirers should ensure their onboarding, monitoring and exception reporting controls are robust enough to help detect and investigate these patterns. With these controls in place, acquirers can help ensure merchants operate within legal and regulatory boundaries and don't compromise the integrity of the payment ecosystem.

Acquirers with mature risk frameworks tend to use the Visa Acceptance Risk Standards (VARS) to inform their merchant underwriting and monitoring practices. Using VARS helps acquirers establish a risk control framework comprising mandatory, recommended and risk-based practices to strengthen oversight and safeguard participants in the ecosystem.

Merchant underwriting: During underwriting, acquirers should identify any red flags relating to the business and its principals, as well as their website and social media presence. For example:

• Are the nature of the merchant's business and its target audience clear?
• Do the age of the merchant's website and the domain ownership check out?
• Does the merchant location on the website match the acquirer jurisdiction?
• Do the product descriptions on the merchant's website include prohibited, restricted or high-risk goods and services?
• What is the level of follower engagement on the merchant's social media channels?
• What is the level of negative feedback and customer complaints about the merchant on social media and other forums?
   

Merchant monitoring. Following onboarding, acquirers should monitor merchant activity, focusing on:

• Transactions to detect things like unusual ticket sizes, high volumes of cross-border transactions or extreme volatility in payment volume
• Merchant websites to identify, for example, discrepancies between listed prices and transaction amounts
• Fraud and dispute volumes to look for anomalies like large dispute volumes attributed to merchant misrepresentation
   

Read the whitepaper to learn more about identifying and interpreting merchant risk indicators, best practices for underwriting and monitoring and Visa solutions that can support you.