TABLE OF CONTENTS


About Mastercard monitoring programs

Mastercard's Excessive Chargeback Program (ECP) is comprised of two tiers: Excessive Chargeback Merchant (ECM) and High Excessive Chargeback Merchant (HECM). This program applies to users across all supported countries.


Mastercard mandates that merchants maintain a chargeback rate lower than 1.5% of their total transactions. Merchants who surpass this threshold and experience over 100 chargebacks per month are classified as excessive chargeback merchants.


The card network assigns merchants to either ECM or HECM categories based on whether they exceed the pre-established thresholds for monthly chargeback occurrences, outlined below:



Number of Monthly Chargebacks
Monthly Chargebacks (% of Total Transactions)
Excessive Chargeback Merchant Program100 to 299    

1.5% to 2.99%

High Excessive Chargeback Merchant Program300 or more    

3% or more


To assess your risk, it is essential to understand your Mastercard chargeback-to-transaction ratio (also referred to as the chargeback rate).


Your Mastercard chargeback rate represents the number of Mastercard chargebacks filed against you within a single month. To calculate this, take the total number of chargebacks issued during the month under consideration and divide it by the total number of transactions processed in the prior month.


ECP: Mastercard Excessive Chargeback Program

The Excessive Chargeback Merchant program aims to streamline enforcement and enhance communication between acquirers and the card network. Its objective is to improve the accuracy of merchant compliance and ensure greater accountability.


Users are placed into the ECP if they meet or surpass the thresholds for the following criteria:

  • The total number of disputed Mastercard payments (chargeback count)
  • The chargeback-to-transaction ratio (chargeback rate)

Your Mastercard chargeback rate represents the number of Mastercard chargebacks filed against you within a single month. To calculate this, take the total number of chargebacks issued during the month under consideration and divide it by the total number of transactions processed in the prior month.



ECM: Mastercard Excessive Chargeback Merchant

The Excessive Chargeback Merchant program is a chargeback compliance initiative developed by Mastercard. Its objective is to supervise eCommerce merchant activities and minimize excessive chargebacks within the Mastercard network. This is accomplished by imposing penalties on noncompliant merchants.


Threshold: At least 100 chargebacks in a calendar month and a monthly CTR of 1.50% (150 basis points) or higher;


Fines are assessed starting from the second consecutive month, based on Mastercard's Fine Assessment Structure table, as referenced below.


Number of Months Above ECM Thresholds    
Assessment if ECM in Violation Month (100-299 Chargebacks and 150-299 Basis Points)

 Issuer Recovery Assessment

10

No

2EUR/USD 1,000    

No

3EUR/USD 1,000    

No

4 to 6    EUR/USD 5,000    Yes
7 to 11    EUR/USD 25,000    Yes
12 to 18    EUR/USD 50,000    Yes
19 +EUR/USD 100,000    Yes


HECM: Mastercard High Excessive Chargeback Merchant

Threshold: At least 300 chargebacks in a calendar month and a monthly CTR of 3.00% (300 basis points) or higher;


Fines are assessed starting from the second consecutive month, based on Mastercard's Fine Assessment Structure table, as referenced below.


Number of Months Above ECM Thresholds    

Assessment if High Excessive (HECM) in Violation Month Chargebacks and Greater than 300 Basis Points)

 Issuer Recovery Assessment

10

No

2EUR/USD 1,000    

No

3EUR/USD 2,000    

No

4 to 6    EUR/USD 10,000    Yes
7 to 11    EUR/USD 50,000    Yes
12 to 18    EUR/USD 100,000    Yes
19 +EUR/USD 200,000    Yes


EFM: Mastercard Excessive Fraud Merchant Compliance Program

The Excessive Fraud Merchant program focuses on streamlining enforcement and improving communication between acquirers and the card network. Its aim is to enhance the accuracy and accountability of merchant compliance.

You will be placed into the EFM program if you meet or exceed the thresholds for the following criteria:

  • Number of e-commerce Mastercard payments
  • The total volume in US dollars of Mastercard payments resulting in fraudulent chargebacks (net fraud volume), calculated by dispute reason code (reason codes 4837 and 4863)
  • The fraud-count-to-transaction ratio (fraud chargeback rate)
  • The ratio of 3DS Mastercard payments to all Mastercard payments

The fraud chargeback rate calculation is similar to the chargeback rate used in ECM or HECM, with the only difference being that the fraud chargeback rate only considers fraudulent chargebacks.

EFM applies to users who meet all the following conditions:

  • A minimum of 1,000 e-commerce Mastercard payments
  • Net fraud volume exceeding 50,000 USD
  • Fraud chargeback rate greater than 0.50%
  • Total 3DS Mastercard payment count is less than 10% of the overall Mastercard payment count


Number of Months Above EFM Thresholds    

Violation Assessment


10
2

EUR/USD 500

3

EUR/USD 1,000

4 to 6    

EUR/USD 5,000

7 to 11    

EUR/USD 25,000

12 to 18    

EUR/USD 50,000

19 +    

EUR/USD 100,000


If Mastercard determines that a merchant falls under the EFM program, there is no possibility to appeal the decision or evade the resulting penalties. In such cases, the only available course of action is to reduce the number of fraud incidents to levels within the acceptable thresholds.


Protect Your Business Against Mastercard Chargebacks

Safeguard Your Business from Mastercard Chargebacks

What steps can you take to protect your business in the long run? Firstly, be aware that a significant portion of chargebacks—between 60% and 80%—may be cases of friendly fraud. You reserve the right to contest these invalid chargebacks through the representment process. If you successfully challenge a customer dispute, you can recover a part of the disputed amount.


Regrettably, even a victorious representment cannot negate the effect of a chargeback on your chargeback ratio. This is because chargeback rates are determined using the total number of chargebacks issued, irrespective of whether they are later reversed. Consequently, it is crucial to take every possible measure to prevent chargebacks from occurring in the first place.