Navigating the Visa Acquirer Monitoring Program

Visa has consolidated its fraud and dispute platforms into a single program. With enforcement under way, here are some guidelines for compliance.

On April 1, Visa launched the Visa Acquirer Monitoring Program (VAMP), a major overhaul that replaced Visa’s Dispute Monitoring Program (VDMP) and its Fraud Monitoring Program (VFMP) with a new, single framework. Since that launch, Visa has made several updates to the program based on merchant feedback and other considerations.

While the card network’s aim is to simplify oversight, VAMP also presents new challenges for merchants and acquirers. Enforcement was scheduled to begin Oct. 1, so there’s no time to waste in working to understand the new program and how it will affect your company.

Your focus should be on preparing for any potential problems VAMP might cause as well as discovering the most cost-effective methods of maintaining compliance.

Uniting Visa’s previous fraud and dispute ratios, the new VAMP ratio is designed to be a single point of reference for how well a merchant or acquirer is avoiding fraud and chargebacks in its card-not-present transactions. The basic formula is as follows: (Reported fraudulent transactions (TC40) + Total chargebacks (TC15)) ÷ Total transactions.

Using this formula, many fraud-related chargebacks are effectively counted twice: once as a chargeback and again as a TC40 fraud report. Some fraud reports won’t result in a chargeback, however.

For example, imagine a customer calls the bank and reports ten transactions from the same merchant as fraudulent. The bank will file ten TC40 reports, but if six of those transactions are only a few dollars each, the bank won’t bother filing chargebacks for those, and the merchant would receive only four chargebacks. Ten TC40 reports plus four chargebacks would add a total of 14 to the count for the VAMP ratio that month.

Unfortunately, the VAMP ratio formula gets a bit more complicated when accounting for the prevention tools merchants have available:

• Rapid Dispute Resolution (RDR): Resolved disputes are subtracted from the chargeback count, but not the fraud count;Compelling Evidence 3.0: Resolved disputes are subtracted from both the chargeback count and the fraud count.
• Order Insight: If the information provided dissuades the cardholder from continuing to dispute the charge, there will be no fraud report or chargeback.
• Verifi CDRN Alerts: Refunded alerts will prevent chargebacks that would add to the count.

However, whether or not a TC40 report is filed is at the issuer’s discretion.

VAMP ratio is calculated at the beginning of each month, using the count of card-not-present transactions, TC40 reports, and chargebacks from the previous month.

VAMP Ratio Limits And Fees 

Visa has outlined two phases for VAMP ratio enforcement. The first set of limits applies when enforcement begins, targeting merchants and acquirers who exceed the “Excessive” level. A second round of tighter limits will follow, as acquirers will be held to the “Above Standard” threshold starting Jan. 1, and merchants will see their “Excessive” threshold lowered from 2.2% to 1.5% on April 1.

Here’s how this plays out:

Merchants and acquirers that exceed these limits are subject to enforcement, which includes fees for each dispute and fraud report. Here’s how that looks:

• Acquirers – Above Standard: $4 per fraudulent or disputed transaction
• Acquirers – Excessive: $8 per fraudulent or disputed transaction
• Merchants – Excessive: $8 per fraudulent or disputed transaction

Keeping Up with Changes 

Since its initial announcement, VAMP has undergone several significant revisions. For those who were aware of the program but may have missed an update or two, here’s the timeline:

• March 11: Visa reversed its earlier statement that TC40 reports from disputes resolved through RDR or Verifi CDRN would be removed from VAMP ratio calculations.
• March 24: Visa extended the advisory period—originally set to end in July—through Sept. 30.
• May 15: Visa changed the VAMP ratio formula to count fraud-related disputes in addition to the associated TC40 reports. To compensate, ratio limits were increased and fees were reduced. The stricter ratio limit for merchants was delayed from Jan. 1, 2026, to April 1. Visa says these revisions are the last.

What This Means for Merchants 

The effects of VAMP on merchants will be felt differently depending on industry, current chargeback levels, and who the acquirer is.

For businesses where most chargebacks are tied to claims of fraud, the double-counting of these disputes under the new system could hit hard. For those that receive fewer fraud-related chargebacks, the increased ratio limits could be a blessing.

However, acquirers are facing a much more significant change. The former 1% dispute ratio limit will be cut in half, demanding stricter management of fraud and disputes among their merchant portfolios.

Some acquirers may seek to accomplish this by placing ratio limits on their merchants that are even stricter than Visa’s. If an acquirer’s portfolio contains many high-risk merchants or doesn’t contain many low-risk ones, Visa’s 1.5% could be too generous for the acquirer to meet its own 0.5% limit.

Staying Compliant 

Dealing with VAMP means understanding how your current dispute and fraud rates look under the VAMP formula. Use this data to identify gaps and opportunities for improvement.

• Monitor VAMP Ratios by MID: Disputes often vary across Merchant IDs. Granular monitoring lets you catch spikes early and identify potential problems.
• Test Prevention Tools: While prevention tools might not always prevent TC40 reports, they still reduce dispute count, helping to reduce your VAMP ratio.
• Bolster Fraud Detection: Consider tools like AVS and CVV checks, 3-D Secure 2.0, and real-time risk scoring.

Avoid the temptation to rely on a single fix. VAMP is about both sides of the fraud/dispute equation, and the tools you use should address both.

What Comes Next 

Merchants should ensure they have systems in place for monitoring their VAMP ratios. Those who are at risk of exceeding next year’s 1.5% limit should test a variety of methods for preventing fraud and chargebacks, from front-end fraud detection to dispute interventions like alerts.

Consider experimenting with different combinations of these tools to find the most reliable and cost-effective solution for your company. Even merchants that aren’t near the 1.5% limit would do well to prepare for the possibility of acquirers imposing even stricter mandates.

Merchants should also consider enlisting the help of third-party experts who can evaluate a business’s risk, track VAMP ratios by MID, and notify merchants when an MID is nearing the limit.

Chargeback management companies can also provide access to tools like Order Insight, RDR, CE3.0, and Verifi CDRN alerts, and can manage those tools through a single platform, integrating with multiple processors and consolidating data from disparate sources for in-depth analysis. Experts can help merchants to determine the most cost-effective strategy for maintaining a low VAMP ratio and modify that strategy as needed if conditions change.

VAMP has shaken up the industry, introducing a new formula, stricter oversight for acquirers, and complexities for merchants using chargeback prevention tools.

But with the right strategy, it’s possible to stay well within limits and avoid unnecessary costs. If you haven’t already, now is the time to assess your risk, understand how VAMP ratios apply to your business, and develop a plan of action.

—Tim Tynan is chief executive of Chargeback Gurus.