What is the Visa Dispute Monitoring Program? (VDMP)

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April 13, 2023
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What is the Visa Dispute Monitoring Program? (VDMP)

Whether fraudulent or legitimate, chargebacks are a nuisance, exposing you to additional fees and inconvenience, so reducing them is a must.

But if the prospect of fees isn’t enough to spur you into action, know that consistently high dispute ratios will land you on the Visa Dispute Monitoring Program (VDMP), which requires you to tackle your chargeback rates or face further fines and even the possibility of banishment from Visa.

The VDMP might seem punitive to some merchants, but it’s actually been designed to incentivize you. Here we explain how the program works, the consequences of being on it, and how you can exit it or avoid it entirely.

What is the Visa Dispute Monitoring Program? (VDMP)

Like other dispute monitoring programs, the VDMP assesses chargeback activity among merchants so that Visa can identify whether any merchants are generating an unusually high number of disputes.

Any merchant that passes a certain monthly threshold for chargebacks will be automatically flagged and entered into the VDMP.

Visa officially has two levels of threshold, standard and high risk/excessive, which are determined by the ratio of chargebacks to total transactions calculated at the end of each month. It also has a lower early warning threshold to alert merchants if they’re in danger of entering the program. Here are the thresholds:

  • Early warning: a dispute ratio of 0.65% and a minimum of 75 chargebacks
  • Standard: a dispute ratio of 0.9% and a minimum of 100 chargebacks
  • Excessive: a dispute ratio of 1.8% and a minimum of 1,000 chargebacks

Learn more: What is the Digital Authentication Framework (DAF) (Visa)

VDMP vs VFMP (Visa Fraud Monitoring Program)

The Visa Fraud Monitoring (VFMP) program was introduced by Visa to encourage merchants with a high number of specifically fraudulent chargebacks (rather than any type of dispute) to tackle the issue.

Like the VDMP, the VFMP has thresholds, but instead of being based on the dispute to total transaction count, they’re calculated on the total dollar amount of fraudulent chargebacks to the total dollar amount of legitimate transactions. The standard level also gives merchants a four-month window to bring fraudulent transactions down before fines are levied, which, again, is waived for those at the excessive level.

Does Mastercard have a similar program?

Yes, Mastercard has an Excessive Chargeback Program (ECP), which categorizes merchants as either an Excessive Chargeback Merchant (ECM) or a High Excessive Chargeback Merchant (HECM).

What are the consequences of entering the VDMP?

The consequences of entering VDMP depend on which level of the program you’re at.

Early warning

You’re not yet in the program. The early warning simply notifies you and your acquirer to take action to address your chargeback levels.


At the standard level, Visa allows you a four-month period to try and reduce your chargeback rate. If you don’t manage to do this, you’ll start an eight-month enforcement period, during which fines are imposed. From month five to month eight, you’ll be charged $50 per dispute. From month nine, you may also be charged a $25,000 review fee and have to undergo an audit (this does not apply to merchants in the EU). From 12-months, all previous fees apply and you might also be banned from accepting Visa payments, which could put your business at serious risk.


If you breach the high-risk threshold, you don’t get a four-month period to bring your disputes down. You’ll be charged all the above fines immediately.

How to exit the VDMP

Visa allows you to exit the VDMP when your dispute level drops below the standard dispute ratio of 0.9% for three consecutive months. If you go two consecutive months below the threshold but then breach it in the third, you have to start the three month period again.

In order to exit, you should work with your acquiring bank to develop a strategy for reducing the number of chargebacks you receive, usually called a chargeback mitigation plan. This plan should be presented to Visa in order to show that you’re being proactive about tackling the problem.

You can start by accurately monitoring your disputes. Visa recommends tracking card-present and card-not-present disputes separately, tracking phone and internet orders separately, and categorizing disputes according to what triggered them and how they were resolved. You can then implement targeted strategies for tackling any specific or recurring issues.

You can also introduce chargeback prevention alerts, which automatically put on hold any cardholder disputes, giving you the chance to provide a refund before the chargeback is issued.

How to avoid enrolment in the VDMP

Of course, the best way to avoid the risk of negative consequences and fines from enrolment in the VDMP is to never enter the program in the first place. This means developing a chargeback prevention strategy that identifies their source and stops them before they can happen. Again, the prevention alerts may be useful here, though there are better things you can do. For example:

  • Use validation tools - such as the Address Verification Service (AVS), CVV verification, and 3D Secure, which can help you block fraud-based chargebacks by flagging suspicious transactions.
  • Make return, refund and cancellation policies clear - can help prevent canceled transactions.
  • Confirm orders - always confirm customer orders, update them on delivery times, and allow them to track their order.
  • Use clear billing descriptors - make it easy for your customers to know what the charge is for on their bank statement so they won’t mistakenly dispute it.

Learn more: How to use billing descriptors to decrease chargebacks

Fight chargebacks through the representment process

The representment process is a way for merchants to fight chargebacks. It simply requires you to submit evidence to the bank and card network that the transaction was valid, essentially disputing their dispute. If successful, the bank will reverse the chargeback and return the funds to you. However, you’ll still have to pay a chargeback fee to cover admin costs.

Use Rapid Dispute Resolution (RDR)

Rapid Dispute Resolution (RDR) from Checkout.com in partnership with Verifi can help you get your chargebacks under control by automatically resolving any disputed Visa transactions before becoming chargebacks.

How does it work? You set rules that define which disputes you’d like RDR to apply to. Any dispute that meets this criteria is moved into a pre-dispute stage and resolved with an automated credit to the cardholder. This means it doesn’t count towards your chargeback ratio and you can avoid fines and any overheads for dispute monitoring programs.

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April 13, 2023 12:07
April 13, 2023 12:11