Impact of Chargebacks

Chargebacks not only cost businesses time and money—they also affect your reputation, payment processing privileges, and long-term viability. Excessive chargebacks can place your business under the scrutiny of major card networks like Visa and Mastercard, which operate strict monitoring programs to manage and penalize high-risk merchants.

VISA Dispute Monitoring Program (VDMP)

Threshold and Fines

Stage	Monthly Disputes	Dispute Ratio	Fines
Early Warning	75–99	≥ 0.65%	No fines yet
Standard	≥ 100	≥ 0.9%	Fines start after Month 4: $50 per dispute
Excessive	≥ 1000	≥ 1.8%	Higher fines starting from Month 1: Up to $50 per dispute

How to Exit the Program

To exit VDMP, a merchant must maintain:

• Less than 100 disputes per month and

• Dispute ratio below 0.9% for three consecutive months

VISA Fraud Monitoring Program (VFMP)

Threshold and Fines

Threshold	Monthly Fraud Volume	Fraud to Sales Ratio	Fines
Early Warning	≥ $50,000	≥ 0.65%	No fines yet
Standard	≥ $75,000	≥ 0.90%	Fines start after Month 4: Typically $25,000–$75,000/month
Excessive	≥ $250,000	≥ 1.80%	Immediate and larger fines starting in Month 1: $10,000–$75,000/month

How to Exit the Program

To exit VFMP, a merchant must maintain:

• Fraud volume below $75,000, and

• Fraud ratio below 0.95% for three consecutive months.

Mastercard Excessive Chargeback Program (MECP)

Threshold and Fines

Threshold	Chargeback Count	Chargeback Ratio	Fines
Excessive Chargeback Merchant (ECM)	≥ 100	≥ 1.50%	Fines begin from Month 2: Starting at $1,000-$100,000/month
High Excessive Chargeback Merchant (HECM)	≥ 300	≥ 3.00%	Fines begin from Month 2: Starting at $1,000-$200,000/month

How to Exit the Program

To exit MECP, a merchant must maintain:

• Maintain less than 100 chargebacks/month, and

• Keep the chargeback ratio below 1.50% for three consecutive months

Mastercard Excessive Fraud Merchant Program (MEFP)

Threshold and Fines

Threshold	Sales transactions count in the previous month	Mastercard fraud chargeback amount under the reason codes: 4387 & 4863	Fraud chargeback count to sales count ratio	3D Secure processing volume	Fine
Excessive	1,000	$50,000 (USD/EUR)	0.50%	Less than 50% regulated countries* / Less than 10% non-regulated countries	Fines begin from Month 2: Starting at $500-$100,000/month

* Non-regulated countries refer to countries without a legal or regulatory requirement for strong cardholder authentication (e.g. US, Canada, and some European countries). Regulated countries refer to countries with legal or regulatory requirements for strong cardholder authentication (e.g., some European and APAC countries).

How to Exit the Program

To exit the Excessive Fraud Merchant Program, your merchant account must be below Excessive Fraud Merchant Program thresholds for 3 consecutive months