Descriptors and transaction laundering

Key facts (as of 29 October 2026)

• Descriptor: the merchant name a cardholder sees on a statement. Visa gives 25 characters, and the name must be the one by which cardholders recognise the merchant (Visa Merchant Data Standards Manual, October 2026).
• Payment facilitators: may show the sponsored merchant's name alone or "PF name*merchant name", whichever is more recognisable (MDSM).
• High-risk internet payment facilitators: where a cardholder is sent from a high integrity risk merchant's site to a high-risk internet payment facilitator to pay, the facilitator's name must appear with the merchant's (MDSM).
• Gambling: acquirers must prohibit agents from using dynamic merchant descriptors for gambling merchants (MDSM).
• Transaction laundering: also known as "factoring", it occurs when an illicit business uses payment services through a front organisation posing as a legitimate merchant (Visa Payment Facilitator and Marketplace Risk Guide, April 2021).

What a descriptor is for

A descriptor tells the cardholder who charged them. Poor descriptors lead to "I don't recognise this" disputes, and misleading ones hide what was bought. Visa requires extra words where the name does not match the merchant category code, its example being a car park called "John's Farm" that must read "John's Farm Parking".

Visa's descriptor rules by entity

Source: Visa MDSM, October 2026. The manual also defines a ramp provider as an entity that converts fiat to non-fiat currency such as crypto, or vice versa.

NoteSupplementary data in the name must be static and appear in every transaction. A merchant cannot add a city for some outlets and a store number for others.

How transaction laundering works

sequenceDiagram
    participant C as Cardholder
    participant H as Hidden merchant (e.g. illegal gambling)
    participant F as Front merchant (e.g. online shop)
    participant A as Acquirer or PF
    C->>H: Buys on hidden site
    H->>F: Routes payment through front's account
    F->>A: Submits as front's sale, low-risk MCC
    A-->>F: Settles
    F-->>H: Passes on proceeds less a cut
    Note over C,A: Statement shows front's descriptor, MCC and risk controls bypassed

Visa says transaction laundering is used to accept payments for illegal gambling, illegitimate online pharmacies, illegal drugs and counterfeit goods, and that it holds acquirers, payment facilitators and marketplaces accountable for the sellers they onboard (Visa PF guide).

Warning signs

WarningRunning gambling or crypto payments through another merchant's account or code is transaction laundering. It can mean fines, termination and listing on shared databases for the merchant, the PSP and the acquirer.

Controls for PSPs

Visa also runs a Transaction Laundering Detection programme using payment system data and machine learning (Visa PF guide).

Stablecoins and descriptors

Card networks' descriptor rules do not apply to a direct stablecoin transfer, but the same principle does: an off-ramp or settlement provider needs to know whose money it is moving. Screening tools and the Travel Rule cover the on-chain leg. See Wallet screening and blockchain analytics.

Illustrative example: a PSP review

Illustrative example. The firms are invented.

A PSP sees a homeware merchant's volume triple, with many €50 and €100 transactions at night and dispute reasons citing "casino". Its website monitoring finds a checkout page on an unrelated gaming domain. The PSP suspends settlement under its contract, investigates, terminates and reports as required.

Timeline

Q/A

Can a merchant use a discreet descriptor?

It must still be the name by which cardholders recognise it. Discreet names cause disputes.

Is using several merchant accounts allowed?

Yes for distinct channels; identical descriptors across accounts for one channel invite investigation for load balancing.

Who is liable for a laundering seller?

Visa holds the acquirer responsible, and by extension its payment facilitators and marketplaces.

Sources

• Visa, Merchant Data Standards Manual (October 2026): https://usa.visa.com/dam/VCOM/download/merchants/visa-merchant-data-standards-manual.pdf
• Visa, Payment Facilitator and Marketplace Risk Guide (April 2021): https://usa.visa.com/content/dam/VCOM/regional/na/us/partner-with-us/documents/visa-payment-facilitator-and-marketplace-risk-guide.pdf
• Visa, Visa Integrity Risk Program guide (April 2023): https://www.visa.cl/content/dam/VCOM/regional/lac/SPA/chile/Documents/visa-integrity-risk-program-chile.pdf
• Visa, VAMP fact sheet (2025): https://corporate.visa.com/content/dam/VCOM/corporate/visa-perspectives/security-and-trust/documents/visa-acquirer-monitoring-program-fact-sheet-2025.pdf