Visa Updates Fraud & Chargeback Ratios on Oct 1, 2019

Visa Fraud & Chargeback RATIO Changes: Important Information You Don't Want To Miss

In case you didn't already know... 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. This certainly can affect you.

To maintain trust in the Visa brand and continue to protect the integrity of the Visa payment ecosystem for all payment stakeholders involved, Visa will apply new thresholds to the Visa Fraud Monitoring Program (“VFMP”) and the Visa Chargeback Monitoring Program (“VCMP”). Visa will apply these new thresholds to the VFMP and the VCMP, in efforts to further improve chargeback and fraud remediation efforts.

As a result of this update Visa will:

  1. Reduce the “standard” fraud and dispute ratio thresholds for the VFMP and the VCMP from 1% to 0.9%;
  2. Reduce the “excessive” fraud and dispute ratio thresholds for the VFMP and the VCMP from 2% to 1.8%; and
  3. Reduce the “early warning” fraud and dispute ratio thresholds for the VFMP and the VCMP from 0.75% to 0.65%.

Change to the VCMP and VFMP thresholds
The ratio threshold for each individual program parameter type (i.e. ‘Early Warning’, ‘Standard’ and ‘Excessive’) has been changed. Overall, compared to the levels before, the thresholds have been reduced. It should be noted that up until the abovementioned effective date for this change, the current thresholds apply. Much more information is available from the Visa website and your merchant account bank as well. See the graphic below for before and after ratios.

What steps should you take?
As a vigilant merchant, be sure to implement any additional fraud, chargeback and customer service controls that may be needed in order to stay below the new program thresholds.
Your merchant account bank should contact any merchant that is identified in the programs in order to request a fraud or chargeback mitigation plan.

On a separate note, Visa has issued a reminder that merchants using free trial periods and/or recurring business models should ensure that their practices are in compliance with the Visa Rules (e.g. ensuring that terms and conditions are properly disclosed to consumers).

If you have further questions, please do not hesitate to contact your merchant acquiring bank representative or contact our merchant services team.

Great Fraud Scrubbing & Customer Service Reduces Chargebacks

NETbilling offers a complete 24/7/365 in-house call center that will handle your customer service on your behalf and help reduce customer disputes/chargebacks. Whether you use NETbilling exclusively for your payment processing or others in addition to us, we can consolidate all of your customer service needs, resulting in less customer confusion.
We also offer more than a dozen advanced Fraud Defense “scrubbing” tools that are customized for your needs, and help keep fraud away from your web site sales.

Coming soon: NETbilling will shortly be integrated with VMPI, allowing merchants to resolve customer disputes in real-time and avoid costly chargebacks. Visa Merchant Purchase Inquiry (VMPI) is a chargeback prevention tool. It is part of the new Visa Claims Resolution (VCR) initiative, helping to streamline and simplify the chargeback process.

For more information, contact our merchant services team.