Mastercard to Help Banks Spot Scam Merchants Earlier With New Trust Service

⦿ Executive Snapshot

What: Mastercard launched Merchant Trust Services to detect scam merchants earlier.
Who: Mastercard, banks, payment providers, consumers.
Why it matters: This initiative aims to reduce financial losses from scams and restore trust in digital commerce.

The Merchant Trust Services utilize Mastercard’s network intelligence and real-time analytics for risk assessment during merchant onboarding.
Consumers lost approximately US$442 billion globally to online scams in 2025, highlighting the urgency of the new service.
In a pilot program, the Merchant Scam & Risk Indicator detected around 80% of risky merchants before official escalation by issuers.
The indicator will first launch in Europe and the United States, with a global rollout planned within the year.
Acquirers and payment facilitators must investigate potential scam activity within 72 hours once a defined risk threshold is reached.

The rise of generative AI has made it increasingly difficult to identify fake online storefronts, necessitating enhanced detection tools.
The introduction of these services aligns with ongoing efforts to bolster security in digital transactions and protect consumer trust.

Immediate market implications include improved security measures for banks and payment providers, potentially leading to a decrease in fraud-related losses.
Long-term, this initiative could foster greater consumer confidence in online transactions, benefiting legitimate merchants and the digital economy as a whole.

There may be regulatory hurdles related to data privacy and the implementation of real-time monitoring systems.
The competitive landscape could intensify as other payment providers may also enhance their fraud detection capabilities in response.

The success of the Merchant Scam & Risk Indicator will be monitored, particularly its effectiveness in identifying risky merchants before transactions occur.
Upcoming updates to Mastercard’s franchise standards starting in July will be crucial in assessing the operational impact on acquirers and payment facilitators.