Merchant-initiated transactions are payments that are initiated by you, the merchant (not your customer), pursuant to an agreement that you have in place with your customers that allows you to initiate payments on their behalf.

For example, if you operate a subscription business and your customer has consented to you collecting all future monthly payments of variable amounts, those payments may be merchant-initiated transactions.

Similarly, if your business requires you to collect payments from your customers off-session and/or after the delivery of a product or service, and you collect those payments in accordance with a mandate from your customer to do so, those payments might be merchant-initiated transactions.

In order to categorise a payment as a merchant-initiated transaction, you must:

• Have a mandate from your customer to initiate the payment (or a series of payments)

• Be collecting payment for goods or services provided to your customer

• Initiate the payment without any specific action from your customer to trigger the initiation of the payment

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This Q&A is for informational purposes only. It is not legal advice. Please contact your legal advisor to receive tailored guidance on how SCA may affect your business.