Merchant Location Identification

Merchant location identification refers to the information in a card transaction that tells the issuer and the card network where the merchant, or the specific terminal, is located. It usually travels in the authorisation and clearing messages alongside the merchant's name, its merchant identification number and its merchant category code, and typically includes the city, region, country and postal code. Card schemes require acquirers to report the location accurately, because it decides whether a payment is treated as domestic or cross-border, which interchange rates and rules apply, and whether issuer fraud detection systems see a purchase far from the cardholder as suspicious. Misstating the location, for example to obtain cheaper domestic pricing, is a scheme violation. Also see merchant descriptor and cross-border card acquiring.