What is the Mastercard Excessive Chargeback Program?

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April 13, 2023
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What is the Mastercard Excessive Chargeback Program?

In an attempt to combat chargebacks, Mastercard introduced the Excessive Chargeback Program (ECP), a scheme that requires merchants to proactively reduce dispute levels or else face fines.

The goal of the program isn’t to stop every single chargeback - that would be impossible. Instead Mastercard wants to reduce chargebacks to the minimum possible level in order to guarantee the security and stability of its payments network.

That’s because excessive chargebacks place a great burden on the payments ecosystem, which can damage consumer and merchant confidence. The ECP helps to maintain this confidence and ensure that payments work safely for all.

Here we explain how the ECP works, the consequences of entering the program, and how you can exit it.

What is the Mastercard Excessive Chargeback Program? (ECP)

The Mastercard ECP is a dispute monitoring program that assesses chargeback data from its merchants to check whether any of them are experiencing an excessively high number of payment disputes. These disputes are measured against thresholds, including the total number of chargebacks and the calculated basis points for a particular merchant.

To calculate this, Mastercard adds the number of first presentment chargebacks per month and divides it by the number of transactions by you in the preceding month, which is then multiplied by 10,000. If this figure is higher than either of the thresholds for the ECP, you’ll be placed on the program. The levels are:

  1. Excessive Chargeback Merchant (ECM) - 100 chargebacks and 150 basis points or more in a month.
  2. High Excessive Chargeback Merchant (HECM) - 300 chargebacks and 300 basis points or more in a month.

If you breach either of these two thresholds, Mastercard will send an email to your acquirer explaining that you have been identified as either an ECM or an HECM, and you’ll have to take action to bring your chargebacks under control. You’ll remain in the ECP until the number of either chargebacks or basis points you experience falls below the thresholds for three consecutive months.


ECP and ECM are sometimes used interchangeably by Mastercard, which can cause confusion. Basically, if you have been identified as an Excessive Chargeback Merchant, you are on the Excessive Chargeback Program and will have to take steps to tackle your chargeback issue.


Both the Excessive Fraud Merchant Program (EFM) and ECP belong to Mastercard’s Acquirer Chargeback Monitoring Program, and seek to identify merchants with a high number of chargebacks. The difference is that the EFM monitors specifically for excessive fraud-related chargebacks from ecommerce transactions by establishing whether they meet four criteria:

  • At least 1,000 ecommerce transactions from the previous month in clearing
  • At least $50,000 in fraud-related chargebacks
  • At least 50 basis points in fraud-related chargebacks
  • The merchant is in a regulated country and the percentage of their clearing volume processed using 3-D Secure is 50% or lower (or 10% or lower in a non-regulated country)

As with the ECP, if a merchant passes these thresholds, they must develop a performance strategy to reduce fraud-related chargebacks.  

Does Visa have a similar program?

Yes, Visa has a similar program called the Visa Dispute Monitoring Program (VDMP). It has a standard and excessive level, as well as an early warning threshold to alert merchants that they’re at risk of entering the program. At the standard level, Merchants have four months before fines are levied. At the excessive level, fines are imposed immediately.

What are the consequences of entering Mastercard’s Excessive Chargeback Program?

As soon as you’re identified as an ECM, you have a month to get your chargebacks or basis points back below the threshold. If you don’t manage to achieve this within the first month, Mastercard will start to impose fines.

These fines start at $1,000 for the second and third month, and then increase to $5,000 for months four to six. At month four and beyond, Mastercard may also send you an Issuer Recovery Assessment, which charges you $5 for each chargeback after the first 300. After six months, as well as much higher fines, you may have to resolve your chargeback issue at your own expense. At 12 months, Mastercard begins charging your acquirer fees as well, which will most likely result in your acquirer terminating your account.

The only difference between being an ECM and an HECM is that the fines for HECMs increase at a much faster rate. So, for example, while an ECM will be paying $5,000 in months four to six on the program, an HECM will pay $10,000.

How to exit the Excessive Chargeback Program

Once you’re on the ECP, you’ll have to work with your acquirer to develop a strategy to resolve your chargeback issue, which should include steps like enhancing your fraud prevention capabilities, assessing your operational processes, and improving your customer experience. If necessary, your acquirer can request an extension from Mastercard, who may ask to see your action plan to bring your chargebacks below the thresholds.

The only way to officially exit the program is to ensure your chargebacks or basis points remain below the thresholds for three consecutive months. As soon as you leave the program, you’re free from penalties and will be treated just like any other merchant.

How to avoid enrolment in the Excessive Chargeback Program

The best way to avoid enrolment in Mastercard’s ECP is to tackle excessive chargebacks before they become a problem. Here are our top tips for preventing chargebacks:

  • Improve your customer experience - from ensuring your return, refunds, and cancellation policies are clear and accessible to making it easy for a customer to contact you if there’s a problem, ensuring good communication with your customers will limit the chance that they’ll ramp up a routine request or concern to a dispute.
  • Invest in fraud prevention - strong customer authentication rules are a great way to tackle fraud. For example, 3D Secure helps you to verify customer identities to ensure they’re genuine and to monitor for high risk buyers so you can guard against fraudulent transactions.
  • Act quickly - whether someone’s card has expired or a customer has requested to cancel a recurring transaction, acting promptly to update essential details and communicating any action with your customers will help to avoid chargebacks.

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April 13, 2023 12:07
April 13, 2023 12:09