Mastercard Overhauls High-Risk Merchant Program, Adds New Fees

Mastercard has implemented a significant overhaul of its Specialty Merchant Registration Program, introducing new fees and increasing existing ones for businesses operating in categories deemed high-risk, including adult content. These changes, detailed in Bulletin AP/LAC/MEA/US 12568.1, began rolling out in May 2026 and will impact merchants and acquirers across various regions.

New Fee Structure and Implementation Dates

The updated program, which Mastercard uses to monitor and register merchants in elevated-risk categories such as adult content, CBD, firearms, tobacco and vape, nutraceuticals, online gambling, cryptocurrency, and high-risk securities, introduces four new or increased charges. The first wave of changes took effect on May 1, 2026, with the second wave following on June 3, 2026. The initial billing date for these new fees is June 14, 2026. There is no phase-in period, grace period for compliant operators, or opt-out option other than exiting the program entirely.

The Specialty Merchant Registration Fee has doubled from $500 to $1,000 per merchant annually, effective May 1, 2026. This fee applies to merchants in regions including the United States, Middle East and Africa, most of Asia Pacific (excluding Japan and Indonesia), and most of Latin America and the Caribbean (excluding Brazil, Mexico, and Colombia). Mastercard automatically granted the license to existing acquirers, meaning the bill arrives whether the acquirer requested the license or not.

Effective June 3, 2026, two new per-transaction charges were introduced: a flat Specialty Merchant Transaction Fee of $0.02 per transaction and a Specialty Merchant Volume Fee of 10 basis points per transaction. Both transaction-level fees are billed weekly and are applied in addition to existing interchange, assessments, scheme fees, and any premium merchants already pay for being coded as high-risk. A new High-Risk Acquirer License Fee of $50,000 annually is also charged to every acquirer that continues to onboard specialty merchants.

Transaction Type Identifiers and Impact on Merchants

Mastercard identifies specialty transactions at the network layer using Transaction Type Identifiers (TTIs). P70 and P76 capture cryptocurrency, P71 captures high-risk securities, and P72 is a catchall that captures adult, dating, nutra, and other specialty consumer spaces. The new fees apply to processing codes 00 (purchase of goods or services), 09 (purchase with cash back), 18 (unique transactions), and 20 (credits). Funding transactions are exempt. Once a transaction carries a P72 tag, the fee is applied, with no clean recoding strategy, MCC workaround, or operational shortcut available.

For a midsize adult merchant processing $500,000 in monthly volume with an average ticket of $25, equating to approximately 20,000 transactions per month, the new fees could significantly increase costs. The volume fee alone would be $500 per month ($6,000 annually), and the transaction fee would add another $400 per month ($4,800 annually). Combined with the $1,000 annual registration fee, this totals nearly $12,000 per year in new direct fees, before acquirers recover their share of the $50,000 license cost.

Adult and specialty operators already face higher discount rates, larger reserves, stricter chargeback thresholds, and constant scrutiny on content and compliance. The new fees are an addition to these existing costs. While crypto and securities received their own TTIs (P70, P76, P71), adult, dating, nutra, and subscription-heavy verticals fall into the P72 bucket, sharing fee exposure with other Mastercard specialty verticals that may be flagged in the future. The category is expanding, the fees are recurring, and there is no clear path to lowering them.

Acquirer Response and Merchant Preparation

Mastercard frames these changes as strengthening "ecosystem integrity," "safety and security," and ensuring "fair pricing for the value of the program." However, the bulletin does not list new services, tools, or merchant-side benefits in exchange for the new fees. The pricing is not tiered by chargeback performance, adjusted for tenure, volume, or compliance history. A merchant with an excellent track record pays the same per-transaction fee as a merchant on the edge of program eligibility.

Acquirers are expected to recover the $50,000 annual High-Risk Acquirer License Fee by distributing it across their merchant portfolios. New line items on statements and pass-through language in merchant agreements are anticipated starting in mid-June. Some acquirers, particularly smaller or more generalist providers, may reconsider the viability of specialty processing due to the added operational and licensing burden. This could lead to fewer acquiring options for merchants already operating in a limited processing landscape, with consolidation within the high-risk acquiring market viewed as an expected industry shift.

Merchants are advised to pull current statements to understand existing costs, confirm with their processor how the four new charges will be displayed and billed, and verify that transactions are coded correctly at the TTI level. Updating pricing models, especially for thin-margin subscription products, is also recommended. Merchants should ask their acquirer whether any portion of the license cost is being absorbed or passed through in full. For those single-sourced for processing, building a redundancy relationship is encouraged.

Key Facts

• Mastercard published Bulletin AP/LAC/MEA/US 12568.1 on October 28, 2025, overhauling its Specialty Merchant Registration Program.
• The Specialty Merchant Registration Fee increased from $500 to $1,000 per merchant annually, effective May 1, 2026.
• A new High-Risk Acquirer License Fee of $50,000 annually is charged to acquirers.
• Two new per-transaction fees, a $0.02 Specialty Merchant Transaction Fee and a 10 basis point Specialty Merchant Volume Fee, took effect June 3, 2026.
• The first billing date for these new fees is June 14, 2026.
• The fees apply to transactions identified by Transaction Type Identifiers (TTIs), with P72 capturing adult, dating, and nutra content.