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Dispute monitoring programs

Last updated: 13th January 2022

Card schemes (like Visa and Mastercard) monitor your dispute activity month by month, comparing it to your sales. If the number of disputes (also known as chargebacks) you receive exceeds the levels deemed acceptable by the scheme, you may be placed on their monitoring program.

Once you’re on a program, the scheme can charge you monthly fines and additional fees, until you reduce the dispute activity back down to acceptable levels.

We will let you know if you’re at risk of being placed, or have been placed, on a program, and work with you to reduce your disputes.

To learn how to handle and help reduce chargebacks, read our guide on responding to disputes.

If you fail to comply within a specified time period (this depends on the scheme), the scheme can refuse to continue processing your payments. This is rare, but it's best to take immediate action if you're enrolled on a program.

Learn about Visa’s and Mastercard’s dispute monitoring programmes below.

If you need help or have any questions about the dispute monitoring programmes, contact our Risk team at risk@checkout.com.


Visa's dispute monitoring program

The Visa Dispute Monitoring Program (VDMP) has two levels: Standard or Excessive (or High-Risk). The total number of disputes you had in a month and your dispute-to-sales ratio for that month decide which level you’ll be placed on. We will notify you if you're placed on the program.

If you're at risk of exceeding the program's thresholds, you won't be placed on the program immediately. Instead, we’ll send you an Early Warning notification and you’ll be given time to reduce your dispute levels to avoid being placed on the program.

You may be placed directly on the Standard or Excessive timelime if you're already exceeding the Early Warning thresholds.

VDMP thresholds, timelines, and fines

    Early Warning notifications are given monthly, and only if you exceeded the thresholds detailed below in the previous calendar month.

    There are no fines or additional fees associated with being provided with an early warning, but we will work with you to reduce your dispute activity.

    Thresholds

    Number of disputesDispute-to-sales ratio

    75

    0.65%

    How does Visa calculate the dispute ratio?

    Visa calculates the dispute-to-sales ratio as follows: the number of disputes you received during the month divided by the number of sales you processed during that same month, multiplied by one hundred.

    For example, if you had 175 disputes in January, and had 5,500 sales in January, you would have a dispute-to-sales ratio of 3.18% (175 / 5500 x 100).

    This would place you on the Standard level of the VDMP (if you were in a non-high-risk merchant category).

    How to exit the VDMP

    Visa will remove you from the program if your dispute activity falls below the Standard thresholds for three consecutive months.


    Mastercard's dispute monitoring program

    Mastercard’s Acquirer Chargeback Monitoring Program (ACMP) has two levels: Excessive Chargeback Merchant (ECM) or High Excessive Chargeback Merchant (HECM). The total number of chargebacks you had in a month and your chargeback-to-sales ratio for that month decide which level you’ll be placed on. We will notify you if you're placed on the program.

    ACMP thresholds, timelines, and fines

      Thresholds

      Number of chargebacksChargeback rate (basis points)

      100-299

      150-299

      Timeline

      Number of months above ECM thresholdsFinesIssuer recovery assesment

      1

      €/$ 0

      No

      2

      €/$ 1,000

      No

      3

      €/$ 1,000

      No

      4-6

      €/$ 5,000

      Yes*

      7-11

      €/$ 25,000

      Yes*

      12-18

      €/$ 50,000

      Yes*

      19+

      €/$ 100,000

      Yes*

      * The issuer recovery assessment applies an additional 5 USD/EUR for each chargeback over 300 chargebacks. For example, if you had 500 chargebacks, you would be charged 1,000 USD/EUR in issuer recovery (500 - 300 = 200; 200 x 5 = 1,000).

      How does Mastercard calculate the chargeback rate?

      Mastercard measures your chargeback rate in ‘basis points’, using the number to define which level of the program you fall into.

      These basis points are calculated as follows: the number of chargebacks issued during the month in question, divided by the number of Mastercard transactions you processed in the previous month, multiplied by 10,000.

      For example, if you had 185 chargebacks in February and processed 7,500 payments in January, you would have a chargeback rate of 247 basis points (185 / 7500 x 10,000 = 246.66, rounded up to 247). This would place you on the Excessive Chargeback Merchant (ECM) level of the program.

      How to exit the ACMP

      Mastercard will remove you from the program if your dispute activity falls below the ECM thresholds for three consecutive months.


      Need help?

      If you need support or have questions about the dispute monitoring programs, please contact our Risk team at risk@checkout.com.