A US Address Does Not Make a Merchant American. How Visa and Mastercard Decide Where a Merchant Is, and Which Acquirers May Sign It.

Every merchant application has an address on it. For an online merchant run from one country through a company formed in another, that address and the location the card networks recognise can be two different places, and an acquirer that boards on the first can end up processing for a merchant it was never allowed to sign.

Both Visa and Mastercard tie an acquirer to the country it is licensed in, and both have their own test for which country a merchant is in. This piece sets out those tests from the Visa Core Rules and Visa Product and Service Rules dated 18 April 2026 and the Mastercard Rules dated 2 June 2026, and what they mean for the people who board and underwrite merchants.

Why the Merchant's Country Matters

Visa's rules say an acquirer must accept transactions only from a merchant outlet within its own Country of Domicile, and that country's territories and possessions, unless an exception applies. Mastercard's say a merchant may accept cards only at locations within the acquirer's Area of Use, the territory in which Mastercard has licensed it.

The location is not only an eligibility question. Visa defines the Transaction Country as the country in which the merchant outlet is located, and requires the merchant outlet country to be the same throughout a transaction's life cycle, from the authorization request through clearing to any dispute, credit or reversal. Mastercard requires the merchant to show cardholders its physical address before asking for card details, so they can tell whether the transaction will be domestic or cross-border, and the country shown must match the one in authorization and clearing. Our earlier piece on billing descriptor rules covers that disclosure side.

Card-Present: Where the Sale Happens

For card-present sales the two networks largely agree. Visa requires the acquirer to assign the location where the transaction is completed for an outlet at a fixed location. For a merchant with no fixed location, it may assign either that place or the merchant's Principal Place of Business, and for in-transit transactions, where the journey started or an interim or final destination.

Mastercard says the country of a card-present merchant is the country in which the transaction takes place. A transaction at a terminal with no fixed location, for example aboard a train or ship, may be deemed to take place in the country where the merchant is headquartered or where the transaction is processed.

Card-Absent: Where Visa and Mastercard Look Past the Address

Visa starts from the merchant's Principal Place of Business, which it defines as the fixed location at which a merchant's executive officers direct, control and coordinate the business. For a card-absent transaction, the acquirer must assign the country of that place as the merchant outlet location. It may assign additional locations only in set cases: for airlines, cruise lines, passenger railways and other travel merchants, the country where the first leg of travel begins; for lodging, the country of the stay; for vehicle rental, taxi and ride services, the country where the car is rented or the journey begins. Any other merchant can have an additional location only in a country where all three of the following are true:

• The merchant has a permanent location where its own employees or agents carry out the business activity directly related to providing the goods or services in the specific transaction.
• The merchant assesses sales taxes on the transaction activity.
• That country's law governs the contract between the merchant and the cardholder.

Even then, Visa says the acquirer may assign the location for a given transaction only as the place where the underlying business activity for that transaction occurs. An additional location is not a choice of the most convenient country.

Mastercard's test is a certification. The country of a card-not-present merchant is the one for which the acquirer certifies, and by signing the merchant agreement does certify, that four criteria are met:

1. The merchant conducts business locally, meaning its business activity and operations directly related to the transactions happen in that country.
2. It holds all the permits it needs under local law to operate there as a domestic entity.
3. It has told the acquirer it pays or will pay income tax on profits from the transactions there, where taxes apply, and it is registered to collect indirect taxes such as sales tax or VAT, whether or not it is required to collect them.
4. Its terms say that it, as the cardholder's counterparty, is subject to that country's laws and courts, except where local consumer law allows otherwise.

Mastercard is explicit about what does not count as conducting business locally: a post office box, the place a server is kept, a warehouse with no business-related functions, a website's URL, or the address of the merchant's law firm, vendor or agent. On its face, that takes in the registered-agent address many newly formed companies use.

So a US company run from abroad, with a US registered-agent address and a US bank account, is not, on those facts alone, a US merchant for card purposes. Under Visa's definition its Principal Place of Business is where its officers run it, and under Mastercard's an agent's address does not show local business.

The Exceptions

Cross-border acquiring is allowed in limited cases. Visa permits it with Visa's approval for a member licensed in another jurisdiction, for airlines under its International Airline Program, for merchants at military bases, embassies, consulates and international governmental organisations on foreign soil, and for EU passporting in Europe. Between the US and Canada, Visa allows card-absent cross-border acquiring in one narrow form: a US acquirer may acquire e-commerce and mail or phone order sales from a Canadian merchant to US cardholders in US dollars, and a Canadian acquirer the reverse, to Canadian cardholders in Canadian dollars.

Mastercard treats an embassy, consulate or military base of a country in the acquirer's licence as inside the acquirer's Area of Use wherever it physically is. It lets an acquirer take airline transactions from outside its Area of Use under conditions, and otherwise requires an application to extend the Area of Use.

Payment Facilitators

Visa lets a payment facilitator contract with a sponsored merchant outside the country where the facilitator is located only if the acquirer and the sponsored merchant are in the same country, and settlement to the sponsored merchant happens in the acquirer's jurisdiction, through a local account the facilitator owns and controls, an acquirer-owned account the facilitator controls, or direct settlement from the acquirer. None of the three may be identified in a Visa risk program or have had excessive risk program violations in the prior three years. Visa reserves the right to require the facilitator to be in the acquirer's country, and the arrangement is not available for High-Integrity Risk merchants, travel and entertainment merchants, or merchants taking advance payments.

Mastercard applies the same location test to sponsored merchants. The acquirer must verify that a sponsored merchant's address is a place from which it actually conducts the business, and must certify that it meets the card-present or card-not-present criteria, though it may let the payment facilitator manage both on its behalf.

Who Has the Final Say

Not the acquirer, and not the merchant. Visa says it may determine a merchant outlet's country and the acquirer's ability to contract with the merchant, and that its decision is final. If Visa disputes a location an acquirer assigned, it may set the correct one in its sole discretion. Mastercard may ask the acquirer for a certification signed by the merchant's senior executives or officers that it meets every criterion and conducts the business from the address shown to cardholders, and its determination of a merchant's location is final.

Visa also builds location into boarding. An acquirer or payment facilitator must ensure, before signing, that a merchant operates within an allowed jurisdiction and is not misrepresenting its location, and the acquirer must not misrepresent or alter a location or let its merchant or agent do so. An acquirer soliciting merchant applications must also list its location requirements on its website or application. Adyen tells its merchants that businesses not meeting the location requirements may face non-compliance cases and potential assessments from the networks.

A Processor's Checklist Is Not the Network Test

Processors publish their own requirements, and they are a useful floor. Stripe, for example, asks a business opening an account in a country for a legal entity registered there, a tax ID, a local address that is not a post office box, a local phone number and a local, non-virtual bank account, and its restricted businesses list prohibits cross-border acquiring unless the card network rules permit it. But entity, address and bank account are not the networks' test. Mastercard's asks where the business is run, whether it holds local permits and tax registrations, and which courts its customer terms submit to. A company can have the documents and still fail it.

What a Merchant-Services Team Should Check at Boarding

1. Ask where the business is run, not only where it is registered, and record where the officers are based. For an online merchant, that sets Visa's default location.
2. Treat a registered-agent, virtual-office or mail-forwarding address as a flag, not an answer, and ask for evidence of where staff work.
3. Read the website: the governing-law clause, the company named as seller, and the address and country shown before card details are asked for.
4. Check local tax registration and permits, which Mastercard's criteria require.
5. Make sure the country you send to the networks, the one on the website and the one the merchant operates from are the same.
6. If a merchant is eligible only through an exception, such as Visa's US–Canada rule or its cross-border sponsored merchant terms, record which one and re-check its conditions at review.
7. Re-check when ownership, staff or the website changes. A merchant that met the test at boarding can stop meeting it when the people running it move abroad.

None of these rules is new. What makes them worth revisiting is how easy it has become to form a company in one country and run it from another, and how often an application shows only the first.