Visa Fraud and Chargeback Rules Update

F2S and Chargeback Ratio Lowered to 0.9% from October 2019

 

Effective 1st October 2019 Visa will apply new thresholds to improve the efficiency of the Visa Fraud Monitoring Program (VFMP) and the Visa Chargeback Monitoring Program (VCMP).

The main purpose of these Visa programs is to protect cardholders against fraud, protect the integrity of the Visa payment system, and introduce a standardised framework across the world.

Visa calculates the fraud and chargeback ratios as following:

VFMP: Fraudulent transactions (in USD) reported in the past month divided by the sales of the merchant for the past month (in USD) to get the fraud-to-sales ratio.

VCMP: Chargebacks reported in the past month divided by the sales count for the past month to get the chargeback ratio (CTR).

Both programs only take into consideration cross-border transactions, i.e. intra and inter-regional transactions.

 

The new thresholds from October 2019

Visa has three thresholds: warning, standard, and excessive. However, Merchants qualified as high risk (MCC’s: 5962, 5966, 5967, 7995, 5912, 5122) will automatically fall under the Excessive Non-Compliance Assessments even if they only break the Standard threshold.

 

Program

Criteria

VCMP Standard

• 100 or more in dispute count and
• 0.9 % or higher ratio of dispute count-to-sales count

VCMP Excessive

• 1,000 or more in dispute count and
• 1.8 % or higher ratio of dispute count-to-sales count

VFMP Standard

• USD 75,000 or more in fraud amount and
• 0.9 % or higher ratio of fraud dollar-to-sales dollar amount

VFMP Excessive

• USD 250,000 or more in fraud amount and
• 1.8 % or higher ratio of fraud dollar-to-sales dollar amount

 

In case of exceeding a threshold, Visa will inform TrustPay. In turn, we will notify our Merchants and will work closely with them to cut down the fraud/chargeback levels. Please, note that non-compliant activity triggers a non-compliance fee. Merchants breaching the Excessive thresholds will be assigned a Non-Compliance Assessment fine for each month of a breach.

TrustPay is taking this opportunity to notify all of the Merchants to take appropriate action to ensure they maintain adequate risk controls to stay below the program thresholds.

Therefore, we would like to advise you to check and confirm that your terms and conditions are properly disclosed to consumers and that you operate in compliance with the TrustPay’s recommendations as well as Visa’s new rules on fraud and chargeback.

If you need any assistance or more information on TrustPay’s chargeback and fraud policies, please, contact your Relationship Manager.

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