Monitoring programs

Prevent risk for your business by keeping chargeback and fraud ratio below monitoring thresholds

Thresholds

Card schemes (such as Visa and Mastercard) track your disputes monthly and compare them to your sales. If the number of disputes (also known as chargebacks) you receive exceeds what the card system deems acceptable, you may be enrolled in the monitoring program.

If you are accepted into the program, the system may charge you monthly penalties and additional fees until you reduce the number of disputes to an acceptable level.

Visa

Visa has established two monitoring programs to identify merchants with excessive disputes and/or fraud and to promote the use of fraud controls and fair business practices.

The Visa Dispute Monitoring Program (VDMP) and the Visa Fraud Monitoring Program (VFMP) run monthly for 12 months. At the beginning of each month, Visa reviews the previous month’s processing activity and identifies merchants that exceed the program’s thresholds. Your company must exceed both thresholds to be enrolled in the program.

Visa identifies a merchant based on a descriptor, and conducts a monthly review of all activity under these descriptors. This process applies specifically to merchant accounts that exceed certain thresholds.

Visa calculates the ratio of disputes to sales as follows: the number of disputes you received in a month divided by the number of sales you processed in that month multiplied by one hundred.

For example, if you had 175 disputes in January and made 5,500 sales in January, your dispute-to-sales ratio is 3.18% (175 / 5,500 x 100).

This would put you in the standard level of the VDMP program (if you are not a high risk merchant).

Visa will disqualify you from the program if your dispute activity is below the standard threshold for three consecutive months.
If your business is accepted into the program, you will be required to submit a monthly remediation plan beginning in the second month. This plan will describe the root cause and recovery actions. The plan must include steps and dates for all remedial actions. Penalties for non-compliance will be calculated monthly based on the plan and the month of participation in the program. To opt-out of the program, your company must remain below the standard thresholds for three consecutive months. If your company participates in the program for more than 12 months, you may no longer be allowed to accept Visa payments.

VDMP

Early Warning

75 or more disputes, and 0.65% ratio of disputes to sales transactions

Standard

100 disputes, and 0.9% ratio of disputes to sales transactions

Timeline for 12-Month Card Monitoring Program

Months 1-4
- Workout period
- No fines
Months 5-9
- Visa fine of 50 USD per dispute
Months 10-11
- Visa fine of 50 USD per dispute
- 25,000 USD review fee (non-EU merchants only)
- Might require audit
Month 12+
- Visa fine of 50 USD per dispute
- 25,000 USD review fee
- Might require audit
- Merchant eligible for disqualification (can no longer process Visa payments)

Excessive

1000 disputes, and 1.8% ratio of disputes to sales transactions

Timeline for 12-Month Card Monitoring Program

Months 1-6
- Visa fine of 50 USD per dispute
Months 7-11
- Visa fine of 50 USD per dispute
- Visa can begin to apply a 25,000 USD review fee (non-EU merchants only)
Month 12+
- Visa fine of 50 USD per dispute
- Visa can begin to apply a 25,000 USD review fee (non-EU merchants only)
- Merchant eligible for disqualification (can no longer process Visa payments)

High Risk

100 disputes, and 0.9% ratio of chargeback to sales transactions and
One of the following:
- Merchant outlet moved from Visa standard threshold to High-Risk threshold based on a review of merchant performance and inappropriate business practices (e.g., use of abusive free trial policies, negative renewal options, etc.), or
- The merchant exceeds the standard program thresholds and is categorized or should be categorized by a high-brand risk MCC, High-Brand Risk MCCs (MCC 5962, 5966, 5967, 7995, 5912, 5122, 5993), or
- Met or exceeded the program’s Excessive threshold

VFMP

Early Warning

US $50,000 or more in fraud dollar amount, and 0.65% or higher ratio of fraud to sales dollar amount

Standard

US $75,000 in fraud amount, and 0.9% ratio of fraud to sales dollar amount

Timeline for 12-Month Card Monitoring Program

Months 1-4 * No penalties
Months 5-6
- Issuers able to raise fraudulent disputes on 3DS transactions (all markets)
- 25,000 USD
Months 7-9
- Issuers able to raise fraudulent disputes on 3DS transactions (all markets)
- 50,000 USD
Months 10-12
- Issuers able to raise fraudulent disputes on 3DS transactions (all markets)
- 75,000 USD
Month 12+
- Issuers able to raise fraudulent disputes on 3DS transactions (all markets)
- Merchant eligible for disqualification (can no longer process Visa payments)

Excessive

US $250,000 in fraud amount, and 1.8% ratio of fraud to sales dollar amount

Timeline for 12-Month Card Monitoring Program

Months 1-3
- Visa fine of 10,000 USD
- Issuers able to raise fraudulent disputes on 3DS transactions
Months 4-6
- Visa fine of 25,000 USD
- Issuers able to raise fraudulent disputes on 3DS transactions
Months 7-9
- Visa fine of 50,000 USD
- Issuers able to raise fraudulent disputes on 3DS transactions
Months 10-12
- Visa fine of 75,000 USD
- Issuers able to raise fraudulent disputes on 3DS transactions
Month 12+
- Visa fine of 75,000 USD+
- Issuers able to raise fraudulent disputes on 3DS transactions
- Merchant eligible for disqualification (can no longer process Visa payments)

High-Risk

US $75,000 in fraud dollar amount, and 0.9% ratio of fraud to sales dollar amount, and
One of the following:
- Merchant outlet moved from Visa standard threshold to High Risk threshold based on a review of merchant performance and inappropriate business practices (e.g., use of abusive free trial policies, negative renewal options, etc.), or
- The merchant exceeds the standard program thresholds and is categorized or should be categorized by a high-brand risk MCC, High-Brand Risk MCCs (MCC 5962, 5966, 5967, 7995, 5912, 5122, 5993), or
- Met or exceeded the program Excessive threshold

Mastercard

The Mastercard Acquirer Chargeback Monitoring Program (ACMP) has two levels: Excessive Chargeback Merchant (ECM) and High Excessive Chargeback Merchant (HECM). The total number of chargebacks in a month and the ratio of chargebacks to revenue in that month will determine which tier you fall into. We will notify you if you are fall under into the program.

Mastercard identifies merchants using their merchant account ID. Each month, they conduct a review of all merchant accounts that exceed certain thresholds.

Mastercard measures your chargeback ratio in “basis points” and uses that number to determine the program tier into which you fall.

These basis points are calculated as follows: The number of chargebacks in a given month is divided by the number of Mastercard transactions you processed in the previous month and multiplied by 10,000.

For example, if you had 185 chargebacks in February and processed 7,500 payments in January, your chargeback ratio would be 247 basis points (185 / 7,500 x 10,000 = 246.66, rounded to 247). This would put you in the Excessive Chargeback Merchant (ECM) program tier.

Mastercard will disqualify you from the program if your disputes are below the ECM thresholds for three consecutive months.

ECM

The ECM program is designed to simplify enforcement and enable faster interaction between acquirers and card networks. The goal is to make the merchant compliance process more accurate and more accountable. The ECM program is a card chargeback control program developed by Mastercard. The goal of the program is to monitor e-commerce merchants and prevent excessive chargebacks on the Mastercard network. This is done by imposing fines on merchants for non-compliance.

Excessive

A count of at least 100 to 299 chargebacks, and
A chargeback to transaction ratio (CTR) = 1.5% to 2.99%

Metrics / Months	1	2	3	4-6	7-11	12-18	19+
Fine	0 USD	1,000 USD	2,000 USD	5,000 USD	25,000 USD	50,000 USD	100,000 USD
Issuer Recovery Assessment	No	No	No	Yes	Yes	Yes	Yes

High Excessive

A count of at least 300 chargebacks, and
A chargeback to transaction ratio (CTR) = > 3%

Metrics / Months	1	2	3	4-6	7-11	12-18	19+
Fine	0 USD	1,000 USD	2,000 USD	10,000 USD	50,000 USD	100,000 USD	200,000 USD
Issuer Recovery Assessment	No	No	No	Yes	Yes	Yes	Yes

EFM

The EFM program is designed to simplify enforcement and enable faster interaction between acquirers and the card network. The goal is to make merchant compliance a more accurate process with greater accountability.

Under the Mastercard’s EFM program, only chargebacks categorized under the reason code ‘4837 - No Cardholder Authorization’ count towards the established thresholds. Additionally, the EFM Counter Logic only counts the first 15 fraudulent chargebacks from the same account (PAN).

Excessive

1,000 or more e-commerce transactions and
The total dollar amount (or local currency equivalent) of fraud related chargebacks in a given month equals or exceeds USD 50,000, and
The total number of fraud chargeback basis points is equal or more than 50, and
The percentage of monthly clearing volume processed using 3DS (including Data Only transactions) or Digital Secure Remote Payment (DSRP) is less than 10 percent in non-regulated countries or less than 50 percent in regulated countries.

Metrics / Months	1	2	3	4-6	7-11	12-18	19+
Fine	0 USD	500 USD	1,000 USD	5,000 USD	25,000 USD	50,000 USD	100,000 USD

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