Card schemes like Visa and Mastercard track monthly disputes (also known as chargebacks) against your sales. If the number of disputes exceeds the acceptable limit set by the card scheme, your business might be enrolled in a 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 uses descriptors to group and calculate fraud rates, allowing transactions to be linked to specific merchants, goods, and services. The formula for fraud rate is the percentage or amount of fraud per month divided by the total sales or amount for that month. Only the first 10 chargebacks or fraud alerts per card are counted, excluding fraud type code 3 (application fraud).

Mastercard uses Merchant IDs (MID) to group transactions and assess fraud levels. The formula is the number of chargebacks per month divided by the total number of successful transactions the previous month, considering only the first 35 chargebacks from the same card.

Other card systems like American Express, Discover, Diners, and JCB identify merchants by their account ID and calculate fraud rate using the formula: either the number of chargebacks or the amount of fraud in a month divided by the total number of successful transactions or total sales amount for the same month.

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 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.

Visa’s Fraud Monitoring Program for 3D Secure (VFMP 3DS) is designed for US customers to monitor and manage domestic 3D-Secure transaction fraud.

The fraud ratio for VFMP-3DS is calculated by dividing the amount (in USD) of fraud reported on 3D Secure transactions in a given month by the amount of sales processed through 3DS in the same month.

Timeline, Fines, and Fees:

• Early Warning: No fines or additional fees are imposed for receiving an early warning.
• Remediation: If your account stays below the standard program thresholds for three consecutive months, it will be removed from VFMP-3DS.

VDMP

VFMP

VFMP 3DS

VAMP

On April 1, 2025, Visa will retire VDMP and VFMP and change its fraud and dispute management approach. Visa consolidates those monitoring programs into the enhanced Visa Acquirer Monitoring Program (VAMP). VAMP aims to create more seamless controls and processes for acquirers and merchants to prevent fraud, avoid enumeration attacks, and effectively manage disputes, contributing to a more secure environment. The revised program introduces transaction-based metrics called the VAMP Ratio and VAMP Enumeration Ratio.

VAMP Ratio

This metric combines fraud and non-fraud chargebacks into one measure, offering a clearer view of overall risk.

Where:

• TC40: number of card-not-present fraud transactions
• Non-Fraud Disputes: number of disputes with reason codes under 11, 12, and 13 categories
• Total Sales Count: number of settled transactions

The Visa monitoring metrics thresholds, categorized as Above Standard and Excessive, will be implemented in two phases, on 1 April 2025 and 1 January 2026.

Additional criteria for merchant and acquirer thresholds: minimum of 1,000 monthly combined TC40 and Non-Fraud Disputes.

VAMP Enumeration Ratio

This metric measures the frequency of enumeration attacks, where fraudsters systematically test card details to uncover valid account information.

Where:

• Enumerated Transactions: number of enumerated authorization attempts, both approved and declined
• Total Sales Count: number of settled transactions

The Visa monitoring metrics threshold for the VAMP Enumeration Ratio is categorized only as Excessive.

Non-compliance may lead to corrective actions, including penalties, fees, and potential closure of merchant accounts.

VAMP penalties

Starting in the fourth month, fines will be applied to each transaction counted under the VAMP metric, including both fraud and non-fraud. Enforcement fees apply per dispute both fraud and non-fraud for acquirer portfolios that exceed the above standard threshold. Merchants that exceed such thresholds will face enforcement fees individually.

• Merchant Fees:
  • Excessive (VAMP Ratio > 1.5%): $10 fee
  • Excessive (VAMP Ratio > 0.9%): $10 fee, effective January 2026
• Acquirer Fees:
  • Excessive (VAMP Ratio > 0.5%): $10 fee
  • Above Standard (VAMP Ratio > 0.3%): $5, fee effective 2026

VAMP grace period

The grace period covers a 3-month grace timeframe for first-time identifications in a 12-month rolling period. That means remediation will be requested, but no penalties will be imposed during the first three months of exceeding the thresholds.

Participants will exit the program if they remain below the thresholds for one month.

Mastercard

Mastercard operates the Mastercard Acquirer Chargeback Monitoring Program (ACMP), which includes two tiers: Excessive Chargeback Merchant (ECM) and High Excessive Chargeback Merchant (HECM). Your placement in either of these tiers depends on the total number of chargebacks received in a month and the ratio of chargebacks to revenue in that month. You will be notified if your business falls under this program.

Mastercard uses the merchant account ID to identify merchants. Each month, they review all merchant accounts that surpass certain threshold limits. Your chargeback ratio is measured in “basis points,” which Mastercard uses to determine the appropriate program tier for your business.

The calculation of basis points is as follows: The number of chargebacks in a specific month is divided by the number of Mastercard transactions processed in the preceding month, then multiplied by 10,000.

ECM

The ECM program, established by Mastercard, is crafted to streamline enforcement and handle quicker interactions between acquirers and card networks. Its primary objective is to enhance the accuracy and accountability of the merchant compliance process. As a chargeback control initiative, the ECM program focuses on monitoring e-commerce merchants to curb excessive chargebacks within the Mastercard network.

The ECM program aims to keep chargeback levels within acceptable limits by monitoring merchant activities and imposing fines for non-compliance, thus preserving the Mastercard network’s integrity and encouraging improved transaction and dispute management among merchants.

EFM

The EFM program by Mastercard streamlines enforcement and accelerates interactions between acquirers and the card network, aiming to enhance merchant compliance accuracy and accountability.