The Visa Acquirer Monitoring Program (VAMP): Key Insights and Upcoming Changes

The primary goal of the Visa Acquirer Monitoring Program (VAMP) is to ensure the integrity of the Visa payment system. Visa monitors transaction activities to detect and prevent fraudulent behavior, ensuring that both merchants and consumers can trust the system. For acquirers and merchants, this means avoiding excessive chargeback rates and adhering to a set of stringent standards to maintain a high level of transaction security.

Acquirers are responsible for ensuring that their merchants comply with VAMP standards and remain below specific thresholds. This compliance includes implementing robust monitoring systems, conducting regular reviews of transaction data, and taking corrective actions when potential actions are identified. Failure to meet these standards can result in penalties, increased scrutiny, and potential loss of the ability to process Visa transactions.

Visa plans to deploy new changes to VAMP in the European region beginning next year. These changes provide some insight into Visa’s potential goals for the future and can help financial institutions prepare for similar shifts worldwide.

How VAMP currently works

VAMP last underwent major changes in October of 2019, with the creation of a set of critical components. These include:

• Monitoring metrics and criteria:
  VAMP uses various metrics to monitor the performance of acquirers, including transaction volumes, fraud rates, and dispute occurrences. These metrics help Visa evaluate how well acquirers maintain transaction safety and security. Acquirers must have robust systems in place to track these metrics accurately, ensuring they stay within acceptable limits to avoid penalties.

• Reporting and compliance requirements:
  Visa evaluates transaction data monthly for compliance with VAMP expectations. This reporting helps detect and rectify potential issues. Non-compliance with reporting requirements can lead to penalties. Acquirers invest heavily in advanced data management and reporting systems to ensure accurate analysis and use of reported information. Merchants must ensure their data is accurately captured as reported by acquirers, requiring clear communication and cooperation.

• Penalties for noncompliance:
  If an acquirer fails to meet VAMP standards, they face penalties ranging from fines to more severe actions. These penalties help maintain the integrity of the payment system. The threat of penalties motivates both acquirers and merchants to prioritize compliance and maintain high standards when dealing with chargebacks and related fraud.

VDMP and VFMP as key parts of VAMP

VAMP currently encompasses two key systems, the Visa Dispute Monitoring Program (VDMP) and the Visa Fraud Monitoring Program (VFMP). Understanding these systems is essential for complying with monitoring expectations and meeting relevant standards.

Visa Dispute Monitoring Program (VDMP)

VDMP aims to minimize disputes between customers and merchants. By addressing disputes promptly, merchants can maintain consumer trust and satisfaction. VDMP helps maintain trust in the Visa system by keeping disputes under control, helping sellers avoid penalties and maintain a positive reputation.

Thresholds

Merchants may be placed in the VDMP due to the number of disputes reaching specific thresholds, which also have a dispute ratio minimum to account for the scale of transaction volumes.

• Standard Program:
  100 or more chargebacks and a dispute count-to-sales count ratio of 0.9% or higher. Merchants exceeding this threshold need to manage customer relationships more effectively and resolve disputes promptly to avoid moving to a more severe category. Remediation plans become essential.

• Excessive Program:
  1,000 or more chargebacks and a dispute count-to-sales count ratio of 1.8% or higher. Exceeding this threshold can lead to significant penalties and increased scrutiny from Visa, emphasizing the need for robust dispute response and chargeback management processes to avoid potential merchant account loss.

Visa Fraud Monitoring Program (VFMP)

The VFMP focuses on detecting and preventing fraudulent activities. Effective fraud detection helps protect merchants and consumers from financial loss and maintains payment system integrity. Reducing fraud helps avoid financial loss and maintain consumer trust.

Thresholds

Thresholds for the VFMP revolve around a specific dollar amount tied to a fraud dollar-to-sales dollar ratio. This is different from the VDMP in that the transaction value is considered, not the number of disputes.

• Standard Program:
  $75,000 or more in fraud amounts and a fraud dollar-to-sales dollar ratio of 0.9% or higher. Merchants turn to strong fraud detection measures to keep below this threshold, which serves as an entry point to more severe consequences. Remediation plans become essential.
• Excessive Program:
  $250,0000 or more in fraud amounts and a fraud dollar-to-sales dollar ratio of 0.9% or higher. Exceeding this threshold indicates severe issues with fraud management and can result in significant penalties with further action from Visa.

Combining VDMP and VFMP into VAMP

Integrating VDMP and VFMP into the overall VAMP program delivers a comprehensive approach to monitoring both disputes and fraud losses, providing a robust security framework for Visa transactions. Acquirers and merchants must stay informed and proactive in their compliance efforts to ensure they continue to meet these combined requirements. VAMP also has its own threshold requirements for acquirers, with penalties similar to those faced by merchants. These are not separate programs.

• VAMP Card-Not-Present Dispute Threshold:
  750 disputes and a 1% dispute count-to-sales count ratio.

• VAMP Card-Not-Present Fraud Threshold:
  $500,000 in card-absent fraud and a 1% fraud-to-sales ratio.

In most cases, acquirers and merchants must stay below the standard thresholds for three months to leave these programs. Reaching a lower threshold does not reduce your penalties or change your status. These remain at the highest point attained until you exit the program.

What you need to know about upcoming VAMP updates in Europe

In Visa’s Europe region, that combination is changing even further. Deeper integration starting in April of 2025 will see the elimination of the separate VDMP and VFMP programs for merchants. A combined VAMP system with integrated and simplified metrics will replace these programs. The programs will remain in place in the United States for the foreseeable future.

The new changes include stricter thresholds for acquirers.

• The new “Above Standard” threshold will be set to 0.3%, down from 0.9% for dispute ratios. This significant reduction means acquirers must be more vigilant in monitoring and managing their transaction processes to stay compliant, and Visa will expect proof of enhanced dispute management. Merchants will also need to ensure their operations are efficient and transparent to avoid contributing to their acquirer’s risk of exceeding these thresholds.
• “Excessive” categorization thresholds, those above 0.9%, will place acquirers at risk of severe penalties. At this level, Visa may begin to look into specific merchants or payment providers to help the acquirer bring down their thresholds. Acquirers may need to take drastic actions against merchants violating these standards.
• The minimum requirements for all programs will kick in at 1,000 disputes. But these dispute totals will also include non-fraud related reason codes 11,12, and 13 as well as code 10 (fraud). Rapid dispute resolution (RDR) and non-fraud CE 3.0 disputes do not count against these requirements.

These updates will be phased in over six months following April of 2025. Visa plans to provide clear guidelines to help acquirers transition smoothly to the new standards. Acquirers and merchants should plan for these changes by reviewing current practices and identifying areas that need improvement to meet the new requirements.

Implications for acquirers and merchants

Acquirers will need to adjust their operations to meet the new standards. This might involve investing in better fraud detection tools or updating reporting and analysis systems to comply with the enhanced requirements. Merchants must ensure their business practices are transparent and efficient to avoid contributing to their acquirer’s risk of non-compliance. Other challenges include:

Loss of warning thresholds

Currently, early warning thresholds help acquirers anticipate and address potential issues before they exceed standard program limits each month. The anticipated changes for Europe remove these early warnings. This change could pose a significant challenge for businesses that do not stay on top of compliance at all times. These thresholds currently include:

• VDMP Early Warning:
  75 or more disputes and a 0.65% or higher dispute count-to-sales count ratio.

• VFMP Early Warning:
  $50,000 or more in fraud losses and a 0.65% or higher fraud dollar-to-sales dollar amount ratio.

• VAMP Early Warning:
  $250,0000 or more in fraud amounts and/or 375 or more disputes. A 0.45% or higher ratio of dispute count-to-sales count or fraud dollar-to-sales dollar amount ratios.

Strategies for ongoing compliance

To stay compliant, acquirers and merchants should adopt best practices that include regular training for staff, investing in robust fraud prevention technology, and maintaining clear communication with customers or clients. These strategies help ensure compliance with VAMP requirements to reduce the risk of penalties. Continuous monitoring and proactive management of all transactions are essential to meet the stricter thresholds and reporting standards.

How the VAMP updates impact Visa services worldwide

Updates in Europe will likely have a ripple effect on Visa services in the US and globally, even though the specific changes do not affect the US at this time. Regional implementation will provide a strong testing ground for further changes worldwide.

• Enhanced fraud detection
  The new VAMP rollout includes additional measures intended to drive safer transactions globally. These changes — including anticipated updates to the new Visa Account Attack Intelligence (VAAI) Score — will enhance Visa’s ability to detect and prevent fraud, protecting all parties involved. Acquirers and merchants need to stay informed about best practices and technological advancements in fraud detection to remain effective and compliant.
• Consistency in standards
  By aligning regional standards, Visa ensures a consistent approach to transaction monitoring. This consistency helps maintain a uniform level of security and reliability. Acquirers and merchants in Europe will benefit from clear, standardized expectations, making it easier to comply with Visa’s requirements following the initial adoption period.
• Regulatory alignment
  The changes in Europe also help align Visa’s practices with regional regulations, providing a smoother, more unified approach to compliance. This alignment will likely reduce the complexity of managing compliance across different regions, simplifying integration between Europe and other parts of the globe. This benefits acquirers and merchants who operate in multiple regions.

The new, stricter requirements and removal of early warning thresholds may also give Visa providers worldwide insight into future rollouts. By aiming to ensure they remain below the strictest requirements Visa offers, acquirers can stay ahead of the curve and align their practices with emerging global standards.

Best practices and tools for managing VAMP requirements

Managing VAMP requirements effectively requires the right tools and practices. Look for a solutions provider that can help grow your protection as your business scales. Quick and simple onboarding combined with around-the-clock protection is essential. Handling chargebacks and similar disputes in real-time gives you an edge that can help keep your company far from VAMP thresholds.

Fraud detection and prevention tools

A bevy of fraud solutions exist, and the right option is often a mix of critical components.

Best practices for maintaining compliance

Regularly review and update your compliance strategies, stay informed about regulatory changes, and ensure clear and transparent communication with customers. This helps maintain compliance and ensure smooth, secure transactions. Acquirers and merchants should engage in continuous learning and improvement to stay ahead of regulatory changes and technical advancements. Fraud solutions providers should also help educate their clients about emerging threats and trends that threaten their revenues.