TABLE OF CONTENTS
- About monitoring programs
- Visa Dispute Monitoring Program
- VISA Fraud Monitoring Program
- Worst case scenario
- How to keep my business from getting into a monitoring program?
All card networks put a great effort to keep cardholders funds secure. Improving and implementing additional security measures, as 3-D secure 2.0 is suitable for preventing compromised cards from being used for fraudulent payments. Still, it is essential to make sure that merchants and sellers play a fair game on the other end of payment. So all card networks implemented a set of rules and limits on acceptable chargeback rates and fraud limits that they deem acceptable. If you as a merchant fell short of it, you are placed in one of their monitoring programs until you reduce your chargeback rate or fraud activity. We will do our part to help you with this.
Card networks define timeframes (timeline) to comply with monitoring programs. If you neglect to bring your chargeback rate or fraud levels within acceptable limits during the timeline - the card network can restrict you from processing its cards. It can have a determining impact on your business. Solid urges you to comply and put enough effort to prevent chargeback and fight fraud.
VISA Dispute Monitoring Program
VISA Dispute Monitoring Program (VDMP) is applicable to merchants with a chargeback rate higher than 0.65% on their payment account. If a merchant exceeds the monthly chargeback threshold set by VISA, the merchant will enter them into the program. Being in a program may result in disciplinary fees, operating restrictions, and costly periodic reviews.
VDMP tiers
There are three tiers of the VDMP. The program tier that applies to you is based on whether your monthly chargebacks exceed a predetermined threshold:
- VDMP Early Warning
- VDMP Standard
- VDMP Excessive
Each timeline spans 12 months and determines what actions to take monthly. At the beginning of each month, VISA reviews your previous month’s activity to define if it has passed any of its established thresholds.| Program | Monthly Threshold | Fines |
VDMP Early Warning | 0.65% chargeback rate and 75 chargebacks | No fines, probation period. |
VDMP Standard | 0.9% chargeback rate and 100 chargebacks | Months 1-4 - No fines. Months 5-9 - 50 USD / 45 EUR per dispute Months 10-11 - 50 USD / 45 EUR per dispute. - 25,000 USD review fee (merchants outside of the EU). - Audit may be in place. Month 12+ - 50 USD / 45 EUR per dispute. - 25,000 USD review fee. - Audit may be in place. - Merchant can be disqualified (banned by VISA). |
VDMP Excessive | 1.8% chargeback rate and 1,000 chargeback | Months 1-6 - 50 USD / 45 EUR per dispute Months 7-11 - 50 USD / 45 EUR per dispute. - 25,000 USD review fee (merchants outside of the EU). - Audit may be in place. Month 12+ - 50 USD / 45 EUR per dispute. - 25,000 USD review fee. - Audit may be in place. - Merchant can be disqualified (banned by VISA). |
What to do if we got into VDMP?
The point of the VISA Dispute Monitoring Program is to stimulate merchants to not only stop chargebacks from increasing but reduce the chargeback rate.
You can get out of VDMP when your chargeback level decreases below the Standard threshold for three continuous months. The following three months are considered a “tracking” period. If you exceed any of the thresholds in this period, you will simultaneously enter the program again, and the original timeline resumes.
Solid will fight along your side to develop a detailed dispute-reduction strategy - a chargeback migration plan. We will present this plan to VISA, identifying the root cause of a problem and a plan to eliminate it
VISA Fraud Monitoring Program
VISA Fraud Monitoring Program (VFMP) aims to assist merchants in managing their criminal fraud risk. It is a way for VISA to keep track of merchants with businesses of high risk, depending on the product they sell, business model, or background.
VFMP tiers
There are three tiers of the VFMP. The program tier that applies to you is based on whether your monthly fraud rate exceeds a predetermined threshold:
- VFMP Early Warning
- VFMP Standard
- VFMP Excessive
VISA fraud rate is the money value of the transactions you lost to fraud over the defined month, related to the total transaction value of the same month. | Program | Monthly Threshold | Fines |
VFMP Early Warning | $50,000 and 0.65% of sales value | No fines, probation period. |
VFMP Standard | $75,000 and 0.9% of sales value | Months 5-6 - 25,000 USD review fee - Issuers able to raise fraudulent disputes on 3DS transactions (all markets) - 50,000 USD review fee - Issuers able to raise fraudulent disputes on 3DS transactions (all markets) - 75,000 USD review fee - Issuers able to raise fraudulent disputes on 3DS transactions (all markets) - 75,000 USD review fee - Issuers able to raise fraudulent disputes on 3DS transactions (all markets) - Merchant eligible for disqualification (i.e. can no longer process VISA payments) |
VFMP Excessive
| $250,000 and 1.8% of sales value | Months 1-3 - VISA fine of $10,000 - Issuers able to raise fraudulent disputes on 3DS transactions - VISA fine of $25,000 - Issuers able to raise fraudulent disputes on 3DS transactions - VISA fine of $50,000 - Issuers able to raise fraudulent disputes on 3DS transactions - VISA fine of $75,000 - Issuers able to raise fraudulent disputes on 3DS transactions - VISA fine of $75,000+ - Issuers able to raise fraudulent disputes on 3DS transactions - Merchant can be disqualified (banned by VISA). |
What to do if we got into VFMP?
You can get out of VFMP when your fraud level decreases below the Standard threshold for three continuous months. The following three months are considered a “tracking” period. If you exceed any of the thresholds in this period, you will simultaneously enter the program again, and the original timeline resumes and you will need to start over.
Please note that you can be in the VISA Fraud Monitoring Program and the VISA Dispute Monitoring Program at the same time. They are independent of one another, and you will have to deal with each individually.
Worst case scenario
After one full year in one of the programs, VISA may exercise its right to cut off the merchant entirely.
If VISA defines your product as brand-damaging, it can cut you off faster, earlier than limits breached.
If your product creates waves of public distress, your clients are vocal about their unpleasant experience - VISA can cut you off.
Considering that VISA is the most widely-used card brand - disqualification is not an experience your business is likely to survive.
If VISA defines your product as brand-damaging, it can cut you off faster, earlier than limits breached.
If your product creates waves of public distress, your clients are vocal about their unpleasant experience - VISA can cut you off.
Considering that VISA is the most widely-used card brand - disqualification is not an experience your business is likely to survive.
How to keep my business from getting into a monitoring program?
Solid offers a set of advanced tools and products to keep your scores under the limit:
- Chargeback prevention tool - using our direct connection to VISA and issuing banks, we can assist you in interfering in one of the first stages of the dispute-resolution process. Chargeback prevention tool allows you to prevent a chargeback before the dispute process is initiated.
- Rapid Dispute Resolution (RDR) - VISA Verifi product allows resolving disputers by automatic refunds. This solution prevents chargeback at the pre-dispute stage at the VISA Resolve Online system. Hence such disputes do not include in the chargeback rate.