Chargeback monitoring programs
What are chargeback monitoring programs?
Chargeback monitoring programs are card scheme frameworks that identify merchants whose dispute and fraud rates exceed published thresholds and require corrective action until those rates fall back under. Card brands run them as both a punitive measure for excessive and a corrective structure that pushes merchants to manage chargeback activity more closely.
do the day-to-day monitoring. An acquirer continuously assesses the risk profile of each merchant in its portfolio, evaluating the risk metrics that reflect that merchant's chargeback performance. Should these metrics exceed the card brands' established , the acquirer must enroll the merchant in a monitoring program, and both sides become accountable to the scheme for what happens next.
Two schemes run the programs a card-not-present merchant is likely to encounter. Visa retired the Visa Dispute Monitoring Program (VDMP) and the Visa Fraud Monitoring Program (VFMP) on 1 April 2025 and consolidated them into a single Visa Acquirer Monitoring Program (VAMP). Mastercard runs the Excessive Chargeback Program (ECP), which has an Excessive Chargeback Merchant (ECM) tier and a High Excessive Chargeback Merchant (HECM) tier, plus a separate Excessive Fraud Merchant (EFM) program.
Key requirements
- Enrollment isn't optional. Once a merchant's metrics cross a threshold, the acquirer is obliged to enroll it and report remediation progress to the scheme. The merchant can't decline.
- Measurement runs monthly. Each program counts activity per (MID) over a calendar month, so identification tracks a single month's performance rather than a rolling average.
- Visa scores fraud and disputes on one ratio. The VAMP ratio adds fraud reports to TC15 dispute records and divides the total by settled card-not-present sales count, so reported by counts even where no chargeback followed.
- Mastercard scores counts and basis points together. ECP identification depends on both the number of chargebacks in a month and the expressed in , which stops a low-volume merchant from being caught by ratio alone.
- Thresholds move on a published schedule. Visa is phasing VAMP thresholds in across 1 April 2025, 1 January 2026 and 1 April 2026, so a rate that clears the bar in one quarter can breach it in the next.
- Exit requires sustained improvement. Under Mastercard's ECP a merchant stays enrolled until its chargeback count or basis-point rate sits below the program thresholds for three consecutive months.
Who it applies to
VAMP is named for the acquirer because Visa measures at both levels: individual merchants are identified, and acquirers carry portfolio-level criteria across the merchants they board. Mastercard's programs identify the merchant, with the acquirer responsible for and remediation.
- Card-not-present merchants. Settled card-not-present sales form the denominator of the VAMP ratio, so ecommerce and subscription volume is what's being measured.
- categories. A business whose (MCC) carries elevated dispute history sits closer to the threshold at ordinary transaction volumes.
- Merchants with heavy . filed by cardholders who did authorize the purchase still count toward the ratio.
- Acquirers with concentrated portfolios. A small number of high-dispute merchants can pull an acquirer's aggregate ratio above its own criteria.
How it works in practice
- Monthly measurement. The acquirer and the scheme calculate each MID's dispute and fraud metrics from the prior month's volume.
- Identification and notification. A merchant that breaches a threshold is identified in the program, and the acquirer passes the notification down along with the tier it landed in.
- Grace period. Visa gives an identified merchant a three-month window to adjust its practices without penalty; enforcement fees apply from the fourth month.
- Remediation. The merchant takes corrective action to lower its chargeback rate: more stringent fraud detection measures, clearer billing descriptors, faster , improved customer service practices, or revised transaction processing procedures.
- Escalation or exit. Metrics that stay above threshold move the merchant into the higher tier and larger assessments; metrics that stay below it for the required consecutive months close the enrollment.
Penalties for non-compliance
Assessments escalate with time spent in the program rather than with the size of the original breach. A merchant identified under Mastercard's ECP begins accruing monthly non-performance assessments after the initial identification window, and the monthly figure climbs the longer the merchant stays above threshold, which is why an unremediated breach costs far more in month twelve than in month two.
- Per-dispute costs continue. Program assessments sit on top of the the acquirer already charges per case, so the same disputes are billed twice over.
- Reserves and pricing change. Acquirers respond to program risk by raising rolling reserves or repricing the merchant, which withholds settlement funds that would otherwise be available for working capital.
- Account termination. Sustained failure to bring metrics down ends with the acquirer closing the .
- MATCH listing. Termination for excessive chargebacks is a reportable reason, and a entry follows the business into every subsequent underwriting review.
