On May 15, 2025, Visa updated the Visa Acquirer Monitoring Program (VAMP) policy. Again. We all have gone through quite a few revisions since the program was originally announced. And it is becoming quite challenging to keep track of where we are currently at!
So rather than try to re-write our original article (again), we’re just going to start over!
Here’s an overview of where the program stands — as of now. The first draft of our article with the original announcement — and all the subsequent changes — is published below (find it here).
If you’d like to jump to a “then vs. now” comparison to see what has changed in the latest update, click here.
RELATED READING
Like many of you, we had questions about the recent VAMP update. So we went directly to Visa for clarification. We asked dozens of questions and got honest, straightforward answers. And now, we are sharing all those insights with you.
Click here to get access to our recent Q&A conversation with Visa.
What is VAMP?
The Visa Acquirer Monitoring Program (VAMP) is Visa’s way of regulating how acquirers and their merchants manage fraud and chargebacks.
Visa has set risk thresholds. Acquirers and merchants who breach those thresholds may be enrolled in the monitoring program. As a penalty for excessive fraud and chargebacks, enrolled acquirers will be fined.
Visa has also outlined which chargeback prevention solutions will help lower risk exposure.
Let’s break down each of these elements — thresholds, fees, and prevention solutions — and the impact they could have on merchants and acquirers.
What is Visa monitoring?
VAMP primarily monitors disputes — fraud and non-fraud disputes.
The data elements being used for monitoring are:
- TC40 – An issuer will file a TC40 when a transaction has been classified as fraud.
- TC15 – An issuer will file a TC15 when a transaction is disputed.
If a transaction is disputed with a non-fraud claim, the issuer will file a TC15. These Visa chargeback reason codes start with 11, 12, and 13.
If a transaction is disputed with a fraud claim, the issuer is required to file a TC40. Depending on the issuers internal policies, a TC15 (chargeback) will probably also be filed. These Visa chargeback reason codes start with 10.
Note
The VAMP program also monitors fraud enumeration activity (enumeration is commonly referred to as card testing attacks, brute force attacks, or BIN attacks). But there is still a lot of uncertainty about how enumeration will factor into the monitoring program. For now, we’ll focus on the impact of fraud and chargebacks.
What thresholds has Visa set?
VAMP thresholds are influenced by several variables. First, let’s look at what the different classifications are.
VAMP has two thresholds:
- VAMP ratio
- VAMP minimums
Thresholds apply to two audiences:
- Acquirers
- Merchants
Now, let’s look at specific thresholds for each audience and region.
Acquirer VAMP thresholds
Acquirer thresholds fall into three categories:
- Early warning (no fees assessed at this classification)
- Above standard
- Excessive
Here are the VAMP ratio thresholds for acquirer portfolios.
Acquirers also have a monthly minimum of 1,500 VAMP cases across the entire portfolio. In theory, acquirers won’t be enrolled in VAMP until they breach both thresholds — ratio and minimum — in a given month.
Note
The minimum for acquirers in Central and Eastern Europe, Middle East, and Africa (CEMEA) is slightly different than other regions: 150 VAMP cases and $75,000 or more VAMP case value (USD).
Merchant VAMP thresholds
Merchant thresholds are impacted by a couple of different variables: time and region.
Merchant thresholds will be rolled out in phases.
- Initial thresholds are effective June 1, 2025 – March 31, 2026.
- Reduced thresholds go into effect April 1, 2026.
Merchant thresholds vary by regions. Impacted regions are:
- North America (NA)
- Europe (EU)
- Asia Pacific (APAC)
- Central and Eastern Europe, Middle East, and Africa (CEMEA)
- Latin America and Caribbean (LAC)
Brazil, Chile, and India are, for the time being, excluded from VAMP.
Note
Merchants who breach both the monthly minimum and the ratio thresholds will be enrolled in the program — but only if the VAMP ratio for the acquirer’s entire portfolio is less than 0.5%. If the acquirer’s portfolio is 0.5% or above, the merchant will not — in theory — be enrolled.
Here are the VAMP ratios and minimums by region that will be effective June 1, 2025 – March 31, 2026.
On April 1, 2026, the VAMP ratio threshold in these regions will decrease from 2.2% to 1.5%.
- North America
- Europe
- Asia Pacific
Note
Legacy monitoring programs monitored risk for each individual merchant account or MID. But VAMP thresholds are set by billing descriptor. If a business has multiple merchant accounts with a single acquirer and they all have the same billing descriptor, then activity for all the accounts could be grouped together into a single VAMP ratio.
How is the VAMP ratio calculated?
Here is how the VAMP ratio is calculated:
VAMP ratio = TC40s (fraud reports) + TC15s (all fraud and non-fraud disputes) ÷ total settled transactions
Note
It is important to pay close attention to this calculation and what it entails.
Prior to the introduction of VAMP, Visa had two legacy programs to monitor risk: a fraud program and a chargeback program. Each program used the receptive data elements to calculate the ratio. The fraud program ratio was calculated with TC40s. The chargeback program ratio was calculated with TC15s.
But since consolidating the two programs into one, Visa has decided to use both data elements in the calculation. This means that fraud disputes could count twice against the ratio — once for the TC40 and once for the TC15 if filed.
What are the VAMP fees?
Visa will assess fees to acquirers — and acquirers will likely pass applicable fees along to merchants.
Note
Visa offers a grace period. First time identification in a rolling 12-month period will have a 3-month grace period. Fees will not be assessed for those three months. But once the grace period expires, penalties will apply. A new grace period will be offered after 12 months without program identification.
Acquirer fees
If an acquirer is classified as above standard or excessive, the acquirer will be fined for every TC15 and TC40 filed against all merchants in the portfolio — except those merchants with a VAMP ratio at or below 0.5% and a VAMP count of 5 or less.
VAMP includes an early warning stage. Visa may send out warnings if the VAMP ratio for an acquirer portfolio is between 0.4% and 0.5%. The early warning stage does not include fees, but “acquirers should take proactive action to avoid above standard or excessive identification.”
The program includes an advisory period — a time where everyone can get acclimated to the new thresholds without fees. The advisory period ends on September 30, 2025. So fees will be applied at the following times:
- Excessive fees: October 1, 2025
- Above standard fees: January 1, 2026
Merchant fees
Merchants enrolled in VAMP are charged a per-case fee. This fee applies to a merchant if the VAMP ratio for the acquirer’s portfolio is less than 0.5%.
Note
There is a lot of uncertainty about how fees will be assessed to merchants. The VAMP announcement outlines the amount charged to acquirers, but not how acquirers could potentially pass the fees along to merchants.
For example, will acquirers markup the fee to compensate for the increase in administrative work? Will acquirers charge fees based on VAMP enrollment or will everyone simply pay more for the per-chargeback fee — regardless of enrollment status?
We recommend merchants speak directly with their processor or acquirer to determine how their individual business could be impacted.
How do acquirers and merchants exit the program?
Before acquirers can exit the program, they need to first address what caused them to enter the program.
Enrolled acquirers must:
- Determine why their portfolio breached the thresholds
- Create a remediation plan with implementation timelines
- Submit the plan to Visa before the end of the enrollment month
Visa implies there are consequences for noncompliance, but those details haven’t been revealed yet.
Once an acquirer or merchant has lowered their ratio below the threshold, they’ll exit the program the following month.
How can prevention solutions help?
We expect VAMP to have a fairly widespread impact on the payments industry. To minimize the impact on merchants specifically, we suggest creating a comprehensive strategy for managing fraud and chargebacks.
Here are some suggestions on where to begin.
Use tools to prevent criminal fraud
Fraud disputes will cause the most trouble because they could potentially count against your ratio twice: once for the TC40 and once for the TC15. Therefore, it is especially important to stop as many unauthorized transactions as possible.
There are a couple things you can do:
- Sign up for a pre-authorization fraud detection solution. These solutions look for warning signs of fraud — characteristics that are common among unauthorized transactions. The technology can detect and block suspicious activity so you receive fewer unauthorized transactions.
- Turn on Address Verification Service (AVS). AVS compares the billing address provided during checkout with the billing address on file with the issuing bank. A mismatch could mean a criminal is trying to use a stolen account number since the actual cardholder likely knows their personal information. You can program authorizations rules to decline transactions that don’t have an approved response code.
- Turn on checks for card verification value (CVV). A CVV is the three digit code printed on the back of a Visa card. Asking for this code during checkout helps ensure the shopper has the physical card in hand versus a criminal using account information stolen in a data breach or hack (businesses are not allowed to store CVV details). Again, you can set authorization rules to decline transactions that don’t have a positive CVV match.
- Sign up for dispute resolution tools. Ideally, you’ll stop criminal fraud from happening. But if you can’t, there are tools that can help you resolve disputes before they progress to chargebacks. Check those out below.
Update policies and procedures to prevent friendly fraud
The vast majority of fraud-coded chargebacks are actually cases of friendly fraud. Friendly fraud happens when the cardholder disputes a legitimate purchase, inaccurately claiming the transaction was unauthorized.
Unfortunately, in the world of VAMP, a false fraud claim and an actual fraud claim are the same — they both negatively impact your business.
There are several updates you can make to your business that will reduce the likelihood of friendly fraud. Here are a couple suggestions.
- Send order confirmation emails. Make sure customers know when a purchase was made and what it was for. Include clear, easy-to-understand instructions on how to request a refund or cancelation if the purchase was made by mistake.
- Send reminder emails before processing upcoming subscription charges. This is especially important if you offer free trails.
- Write customer-friendly refund policies and make them easy to find on your website.
- Answer customer emails and calls promptly. Don’t make them wait!
- Empower your customer service staff to resolve complaints in the most efficient and satisfying way possible. If you don’t give customers their money back, they’ll get it from the bank instead.
These are just a couple suggestions for friendly fraud prevention. Check our complete guide to discover additional tips and updates.
Use Ethoca alerts, Verifi CDRN, and RDR to prevent chargebacks
There are three chargeback prevention solutions that can help lower your VAMP ratio.
- Ethoca prevention alerts
- Verifi prevention alerts (CDRN)
- Rapid Dispute Resolution (RDR)
These solutions enable you to refund disputed transactions before they progress to chargebacks. If you are able to stop chargebacks (TC15s) from happening, you can protect your VAMP ratio.
Unfortunately, these solutions can’t stop the TC40. So even if you prevent the chargeback, the transaction may still have a TC40 that counts towards your ratio.
See if CE 3.0 could help your business reverse TC40s
Ethoca alerts, Verifi CDRN, and RDR can’t erase a TC40 — but Visa CE 3.0 can.
Visa CE 3.0 allows you to share order information in an attempt to expose and stop friendly fraud. Here’s the idea: If a cardholder has made previously undisputed purchases with you, then the current fraud claim isn’t legitimate.
To qualify for CE 3.0 protections, you have to match certain data points — like customer account ID, IP address, device ID, shipping address — across all three transactions (the two previously undisputed and the current dispute). If you can do that, then the chargeback should be blocked and the TC40 reversed.
However, the previously undisputed transactions have to happen at least 120 days prior. And that’s a tough requirement for a lot of merchants to meet.
But considering the impact it could have on your VAMP ratio, it’s wise to at least look into it. We suggest scheduling a call with our team to discuss a strategy that would be best suited to your business.
What has changed since VAMP was first announced?
Here’s a brief summary of what has changed in the most recent update.
- The ratio now includes all TC15s and all TC40s. That means fraud-coded disputes could be counted twice. Before, the ratio only included TC15s with non-fraud reason codes.
- Because Visa anticipates the addition of fraud TC15s will cause ratios to go up, they’ve increased the ratio threshold for everyone involved — acquirers and merchants. They’ve also increased the monthly minimums.
- Again, because of the addition of fraud disputes, Visa has attempted to level the playing field by lowering the price of per-case fees. However, there is a chance that a single transaction could be charged twice — once for the TC40 and again for the TC15.
- The above standard classification timeline for acquirers moved up. It was originally set to go live January 1, 2026. Now it goes live June 1, 2025. (But fees are waived until January 1, 2026.). This earlier rollout might help everyone involved have a better understanding of how these new expectations will compare to reality.
- Acquirers are now required to submit a remediation plan. If an acquirer is enrolled in VAMP, a notice will be sent via Visa’s technology platform (VERC). Upon receipt of the notice, an acquirer must “submit a detailed remediation plan before the end of the current program month outlining the root cause of the issue and detailed mitigation plan to bring their dispute, fraud, and enumeration levels below the VAMP thresholds.” This administrative burden is new and might be yet another reason for acquirers to lower their risk tolerance.
About a month ago, the team indicated that a previous decision would be reversed so that CDRN and RDR would remove TC40s from the ratio. But that update did not happen.
Here’s a high-level overview of the original VAMP accountment, the updates that were made in January and March, and what will take effect on June 1.
Do you have questions about VAMP?
The Visa Acquirer Monitoring Program launch hasn’t been the smoothest adjustment for anyone involved. And more updates and confusion are likely ahead of us.
If you have questions — at any point along the journey — feel free to reach out to AltoPay. We are regularly in contact with the team at Visa and are staying up-to-date as things unfold. If we don’t know how to answer your question, we’ll meet with Visa to get clarification.
Original VAMP Article
Updated: January 16, January 29, and March 11
The all-new Visa Acquirer Monitoring Program (VAMP) changes the way fraud and chargeback risk is monitored.
Use this guide to learn how the Visa chargeback monitoring program is changing, the updated Visa monitoring program thresholds, and applicable VAMP fees.
Visa VAMP: High-Level Overview
Want the short version? Here’s what you need to know.
What
Visa is changing the way fraud and chargeback risk is monitored. Here are what we consider to be the key takeaways:
- Several existing monitoring programs are being consolidated into one.
- The chargeback ratio – and how it is calculated – has been updated.
- New thresholds indicate that the emphasis is on the acquirer monitoring their portfolio’s risk metrics.
- Even though the announcement is fairly detailed, there are some key elements that haven’t been disclosed yet. You will want to carefully monitor this initiative as it unfolds.
Why
According to Visa, the new update is an effort to “strengthen acquirer risk controls…to minimise activities that adversely affect the ecosystem and reduce friction for customers.”
When
Visa anticipates these updates will take effect April 1, 2025. Further updates will take place in 2026.
Who
The policy updates are being rolled out in ALL global regions. Originally, the announcement applied only to European acquirers and their merchants. However, the initiative has since expanded to other regions.
Implications
This update could impact your business in several ways. We suggest you read this entire article for the most complete understanding. But here are the essentials you need to be aware of:
- The math has changed. Your VAMP ratio could potentially be higher than your chargeback ratio was in the past — if you don’t use the right dispute resolution tools.
- Monitoring risk levels will be even more challenging. More factors go into the ratio calculation. This means you have to collect more data, and there could be accuracy issues.
- As is the case with any new policy update, acquirers and processors may be prompted to reevaluate their risk management strategy. If they decide to lower their risk tolerance, your merchant account could be in jeopardy.
- You could potentially pay more in fees.
- Chargeback prevention tools (CDRN and RDR) are now more important than ever. For some merchants, they might even be essential for survival.
- It’s getting harder and harder to navigate the world of payments on your own. You need access to experts you can trust. If you aren’t working with a payments solution provider or you don’t have confidence in your current partner, reach out to AltoPay today.
Introducing VAMP
Visa is introducing a new method to monitor acquirer and merchant risk.
Currently, Visa uses three programs to monitor payment risk:
- Visa Acquirer Monitoring Program (VAMP) – Acquirers are enrolled in this program if risk across the entire merchant portfolio is too high.
- Visa Fraud Monitoring Program (VFMP) – Merchants are enrolled in this program if too many transactions are reported as fraud.
- Visa Dispute Monitoring Program (VDMP) – Merchants are enrolled in this program if too many transactions are disputed.
Visa is consolidating all their risk monitoring initiatives into VAMP and retiring VFMP and VDMP.
The update also includes a new metric to monitor: enumeration ratios.
Enumeration is the criminal practice of testing stolen payment information, usually conducted at scale via technology. Enumeration is commonly referred to as brute force attacks, card testing attacks, or BIN attacks.
The VAMP update impacts all acquirers and their merchants.
The new policy is expected to take effect April 1, 2025 with additional changes on January 1, 2026.
Note
It’s common for policy updates to evolve and change as they are implemented. Alto Pay is in regular contact with the team at Visa. We promise to keep you updated on any new developments. This article and LinkedIn will have the most up-to-date information. You can also reach out to us directly with any questions.
VAMP Ratios
Ratios have traditionally been the primary metric for fraud and chargeback risk monitoring — and this new update is no exception.
VAMP thresholds are based on two ratios:
VAMP ratio = monthly card-absent disputes / monthly settled transactions
VAMP enumeration ratio = number of monthly confirmed enumerated transactions / monthly settled transactions
Dispute Definition
The VAMP ratio combines TC40 fraud cases and non-fraud disputes. TC40 fraud cases are defined as any transaction that receives a TC40 report. Non-fraud disputes are defined as any chargeback with a reason code in the 11, 12, or 13 category.
On the surface, it may seem like this way of classifying disputes — fraud and non-fraud — is a bunch of unnecessary jargon. However, there are some implications to take note of. We’ll discuss those later in this article.
ORIGINAL ANNOUNCEMENT
Certain TC40 cases and disputes can be excluded from your VAMP ratio. The following cases will not be calculated in your ratio:
- Resolved alerts via Cardholder Dispute Resolution Network (CDRN)
- Resolved Rapid Dispute Resolution (RDR) cases
- Order Insight inquiries that qualify for Visa CE 3.0 protection
UPDATE: January 16, 2025 and March 11, 2025
Visa has changed how the VAMP ratio will be calculated.
On January 16, 2025, Visa shared the following:
“The Cardholder Dispute Resolution Network will not be excluded from VAMP calculations.”
On March 11, 2025, Visa shared the following:
“Card-not-present fraud (TC40) disputes resolved with Rapid Dispute Resolution that include corresponding fraud notices will be included in VAMP calculations.”
We reached out to Visa to confirm the announcement and received a clarification.
- Non-fraud disputes resolved via CDRN and RDR will be excluded from VAMP calculations (because they stop the TC15s/chargebacks from happening).
- Fraud disputes (TC40s) resolved via CDRN and RDR will not be excluded from VAMP calculations — even if they do technically stop the TC15s/chargebacks.
What does this mean? Here are a couple of our initial thoughts.
- CDRN and RDR are still valuable dispute resolution tools. Both will remove non-fraud disputes from your ratio — just like they always have. Resolving a dispute means a TC15/chargeback is not filed.
- The decision to not remove TC40s resolved via CDRN is arguably a good thing. CDRN is managed outside of Visa technology. The other tools — RDR and Order Insight — use Visa technology. So VAMP ratio calculations will likely be much more accurate than if the math included data from two different systems. That being said, we can’t see an obvious justification for excluding RDR since it is Visa technology.
- Visa CE 3.0 — which is difficult to implement and maintain — is now the only way to remove TC40s from your VAMP ratio.
If you have questions about this update or how the ratio is calculated, feel free to reach out to our team.
VAMP Enrollment Criteria
In the past, Visa has had two types of monitoring programs:
- Programs that monitor an acquirer’s overall portfolio risk
- Programs that monitor individual merchant risk
However, the new VAMP combines both acquirer and merchant monitoring into one program. Therefore, there are different enrollment criteria.
Note
This article focuses primarily on merchant thresholds and enrollment. If you’d like to learn more about acquirer thresholds, please reach out to our team.
Thresholds
Acquirers are enrolled in the program if the VAMP ratio for their entire card-absent portfolio exceeds the allotted thresholds. The program launches with an “excessive” classification. A second classification — “above standard” — will be introduced in 2026 with lower thresholds.
Merchants are enrolled in the program if their VAMP ratio is:
- greater than or equal to 1.5% (150 basis points) in U.S., Canada, Europe, CEMA, and AP
- greater than or equal to 0.9% (90 basis points) in LAC
Even if the acquirer’s overall card-absent portfolio is below VAMP thresholds, any merchant over the limit will be flagged as excessive. So merchants in an otherwise healthy portfolio could be enrolled, fined, and eventually closed.
Note
These are the thresholds that will be applicable when the initiative goes into effect April 1, 2025. Visa has plans to lower the thresholds on January 1, 2026.
Minimums
The VAMP announcement also outlines minimums.
- An acquirer is only enrolled in VAMP if its portfolio has received 1,000 or more card-absent disputes (fraud and non-fraud combined) in the given month.
- A merchant is only enrolled in VAMP if it has received 1,000 or more card-absent disputes (fraud and non-fraud combined) in a given month.
While these are Visa’s official guidelines, there are still several unknowns about how these minimums will be implemented. Acquirers will probably manage minimums on a case-by-case basis. For example, some might wait until a merchant breaches both the minimum and the ratio. However, others might take action based on ratios alone.
We recommend you monitor this element closely as the initiative unfolds.
Exiting the program
The VAMP announcement does not include details on how to exit the program.
To exit legacy programs (VDMP, VFMP, etc.), merchants must drop below the given threshold and stay below for several months.
Additional clarity is needed.
UPDATE: January 29, 2025
During a VAMP explainer webinar, Visa clarified requirements of exiting the program.
If merchants can lower their VAMP ratio below the given threshold, they will exit the program the following month.
VAMP Fees
Merchants and acquirers that breach program thresholds will pay additional fees. Program fees for merchants are in addition to traditional chargeback fees.
While the announcement does a good job of transparently sharing fee amounts, there are a couple details that probably won’t be clear until after the initiative goes into effect.
For example, will you be charged the minimum amount outlined by Visa? Or will acquirers add on administrative fees before passing the cost along to you?
And when will fees be assessed?
Normally, fees would be charged after you’ve breached the program threshold. However, with the newly outlined structure, there’s a chance you could be charged program fees even if you aren’t enrolled in the program.
Check with your acquirer on what fees you can expect — and at what ratio.
Managing fees on a merchant-by-merchant basis could be quite challenging. To simplify workflows, we anticipate acquirers may increase upfront chargeback fees across their portfolio — regardless of enrollment status for them or you.
Again, these details likely won’t be addressed until after the program is live.
We suggest you keep a close eye on the initiative as it unfolds and reach out with any questions.
Fortunately, there are some things we do know today.
Visa has provided very clear suggestions on how to avoid the VAMP program and any corresponding fees. You just need to use proven-effective chargeback prevention tools to keep your ratios below thresholds.
How to Prepare For VAMP
1. Use suggested tools to keep ratios in check.
Merchant accounts are valuable assets. You should always do whatever you can to protect them. And, in light of the new VAMP updates, account health is more important than ever before.
Fortunately, there are several tools and technologies that can help you better manage chargebacks.
Note
Cardholder Dispute Resolution Network (CDRN) and Rapid Dispute Resolution (RDR)
CDRN (prevention alerts) and RDR are two popular chargeback prevention solutions. And they can both help you keep your VAMP ratio in check.
While the functionality of CDRN prevention alerts and RDR is slightly different, they both achieve the same outcome. They allow you to refund disputed transactions to avoid chargebacks.
And if you can resolve the dispute without a chargeback, the case won’t count against your VAMP ratio.
When the program was first announced, Visa said that disputes resolved via CDRN and RDR would remove both fraud (TC40s) and non-fraud disputes from the VAMP ratio calculation.
However, updates made in January and March reversed that promise. TC40s will still be included in the calculation — even if the dispute is resolved.
Despite this setback, there is still value in using CDRN and RDR.
Note
Prevention alerts are also provided by Ethoca — which refunds both Mastercard and Visa disputes. And there have been some questions about how Ethoca will factor into VAMP ratio calculations.
If a Visa dispute does not have a TC40 case attached to it, then resolving an Ethoca alert can protect your VAMP ratio because a chargeback is technically never filed.
If there is a TC40 case associated with a Visa dispute resolved by Ethoca, then the TC40 case would still count towards the VAMP ratio.
Pre-Authorization Fraud Tool
Because enumeration is a new metric that will be monitored, card testing attacks must be detected and prevented.
VAMP enumeration ratio = number of monthly confirmed enumerated transactions / monthly settled transactions
If you are not already using a tool for pre-authorization fraud detection, now is the time to get started. Technology can help detect threats and quickly block activity before a full-scale attack hits your business.
Reach out to our team if you’d like recommendations.
Why Chargeback Prevention Matters
Any time policies change — especially those related to risk management — industry members have a tendency to react conservatively.
Before the initiative even goes into effect, processors and acquirers might be quick to terminate accounts and avoid potential risk. If your business is over existing thresholds or is close to a breach, you should take action immediately.
Once the rules are implemented, acquirers will have to keep their dispute ratio below 0.5% for the entire portfolio. If they can’t, they’ll pay a fee for each dispute received by every merchant with a ratio above 0.3%. That’s a really low threshold — with the potential for a massive expense.
In response, acquirers will likely try to eliminate the merchants that pose the biggest and costliest threat.
So even if you are technically below the enforcement threshold, the acquirer may still have to pay a fee for your disputes. If you have a high volume of chargebacks, you could be an obvious choice for remediation or closure.
Remember, processors, acquirers, and card brands don’t want your business’s risk to put their portfolio at risk. Make sure you aren’t viewed as a liability for anyone else in the ecosystem.
2. Create a system for reporting and reconciliation.
The inclusion of TC40 data — along with CDRN and RDR exemptions — introduce new dispute management challenges.
In theory, this is the calculation you’ll use to determine your VAMP ratio:
VAMP ratio = monthly card-absent disputes / monthly settled transactions
However, it will actually look more like this:
VAMP ratio = (TC40 cases + Dispute Condition Codes 11, 12 and 13) – (RDR cases + CRDN alerts) / settled card-absent transactions
You’ll need to pull data from multiple places and consolidate it into a single point of truth. That level of data analysis requires quite a bit of planning and organisation.
Note
Typically, TC40 data is difficult to obtain. Your best bet is to sign up for Verifi’s Inform product and receive TC40 data directly from the card brand. If you are interested in this option, you can receive Inform reports from AltoPay. Pricing is per MID, not per case. Let our team know if you are interested.
Once you’ve collected and consolidated your data, you’ll also need to check for accuracy issues.
When RDR was unveiled several years ago, acquirers struggled to accurately distinguish between successful RDR cases and actual chargebacks. For a while, RDR cases were included in the chargeback ratio.
We anticipate similar struggles with the new VAMP ratio calculations. It will be important for you to conduct your own reconciliation and compare it to the calculations your acquirer comes up with. Any errors or discrepancies need to be reported before you are incorrectly penalised.
Note
This task will likely be very difficult — maybe impossible — to manage on your own. Fortunately, AltoPay provides access to an all-in-one reporting platform that can make monitoring simple and accurate. Contact our team today to learn more.
3. Stay Alert
It’s important to track this initiative as it unveils — for several reasons.
First, the new policy announcement is fairly detailed. But there are a few key elements that have not, as of yet, been disclosed. For example:
- How does an acquirer or merchant get out of the program? How long do you have to keep ratios below thresholds?
- When does an acquirer have to terminate a merchant?
- How will enumeration attacks be monitored and reported? Are fees assigned if the enumeration count is above the threshold?
- How will monthly minimums factor into the monitoring program?
Second, it’s very common for policy updates to change and evolve as a card brand moves toward actual implementation. Industry feedback and technical limitations may cause the rules to change.
We suggest you follow AltoPay on LinkedIn to receive early notifications of any major updates. You can also bookmark this page and check back frequently. If you have specific questions or things you’d like us to ask Visa, feel free to reach out to our team.
We also suggest you reach out to your account manager at your payment processor to see what insights you can gain about the upcoming policy change. For example:
- What are your current fraud and chargeback ratios?
- Does your processor have any advice on how to better manage your current situation?
- Can your processor share any insights on how they plan to address the new update?
Check in now and again closer to the implementation date.
Note
Payment processes and regulations can be difficult to manage. But you shouldn’t have to navigate them on your own. If you are unable to reach your payment processor account manager or you feel you don’t receive adequate answers, it might be time to consider a different payment setup. Life is too short to work with a solution provider you don’t like or trust. Let AltoPay be your trusted advisor for all things payments. Reach out to our team today to learn more.
Want help preparing for upcoming changes?
The new VAMP initiative will be here before you know it. Proactively make updates now so your business will be protected and compliant from day one.
If you’d like help preparing for VAMP, reach out to our team of experts. We have everything you need — CDRN, RDR, reconciliation reporting, professional insights, actionable advice, and more.
For more than a decade, Jessica Velasco has been a thought leader in the payments industry. She aims to provide readers with valuable, easy-to-understand resources.
