Chargeback Management

Visa to Tighten Chargeback and Fraud Thresholds in Q3 2019

visa-chargeback-fraud-threshold-changes

Visa continues to make changes to its risk monitoring programs, announcing recently plans to toughen qualifying thresholds for the Visa Chargeback Monitoring (VCMP), and Visa Fraud Monitoring (VFMP) programs on October 1, 2019.

VFMP & VCMP Defined

The Visa fraud monitoring program, or VFMP,  monitors US-based accounts for signs of high levels of chargeback fraud. 

When the volume reaches a pre-determined threshold, the acquiring bank is notified, and the merchant is given time to bring those levels down. 

Like VFMP, The Visa Chargeback Monitoring Program has monitoring and  remediation components, but focuses on chargebacks, rather than fraud.

When a merchant has reached certain thresholds, Visa asks acquirers to work closely with their merchants to identify the root cause of their chargeback issues, and create a plan for reducing them.

What the Changes Mean to Merchants

Visa's aim in implementing the new thresholds is to ensure that merchants' are using ethical sales tactics, and that transactions are processed, and data stored, on PCI compliant systems.

Merchants with chargeback and fraud mitigation strategies already in place are unlikely to be affected, but those without them will be at greater risk of entering one or both of the programs, which may result in higher fines and administrative costs.

VCMP & VFMP: Before and After

Here are the pre-Q3 2019 Visa Fraud Monitoring Program and Chargeback Monitoring Program limits, and the ones that take effect at the start of Q3 2019.

Visa Fraud Monitoring Program (VFMP)

Before October 1, 2019

As of October 1, 2019

Standard Program

  • USD 75,000 in fraudulent transactions AND
  • 1.0% fraud:sales ratio (dollars)
  • USD 75,000 in fraudulent transactions AND
  • 0.9% fraud:sales ratio (dollars)

Excessive Program

  • USD 250,000 in fraudulent transactions AND
  • 2.0% fraud:sales ratio (dollars)
  • USD 250,000 in fraudulent transactions AND
  • 1.8% fraud:sales ratio (dollars)

Visa Chargeback Monitoring Program (VCMP)

 

Before October 1, 2019

 

As of October 1, 2019

Low Risk Program

  • 100+ dispute count
    AND
  • 1.0% dispute:sales ratio
  • 100+ dispute count                         AND
  • 0.9% dispute:sales ratio

High Risk Program

  • 1000+ dispute count
    AND
  • 2.0% dispute:sales ratio
  • 1000+ dispute count
    AND
  • 1.8% dispute:sales ratio  

 

Of course, the best approach to staying within the threshold is to put the right tools and strategies in place to prevent chargebacks from happening in the first place.

Make sure your business is equipped for the new policy changes. Browse our resources page for guides and white papers written by our team of Chargeback Gurus! 

Download our New Visa Claims Resolution Whitepaper