Dispute and Fraud Card Monitoring Programs
Learn about the monitoring programs that card networks operate, and what you should do if you're placed into one.
As part of your financial obligations to the card networks, you must ensure that disputes (also called chargebacks) and fraud are kept to acceptable levels. If these exceed the thresholds dictated by each network (e.g., Visa or Mastercard), you are placed into one of their monitoring programs. As part of a program, you can be subject to monthly fines and additional fees until your dispute or fraud levels have been reduced.
Stripe can work with you to develop a suitable remediation plan so you can reduce the levels of disputes or fraud that are happening your account. We also communicate directly with the networks and relay information on a monthly basis.
Failure to comply with the requirements of a program within the specified time period (referred to by the networks as a timeline) can result in the network refusing to process further payments using their cards. While this is extremely rare, it is vital you take whatever action is needed as soon as possible.
Visa monitoring programs
The Visa Fraud Monitoring Program (VFMP) and Visa Chargeback Monitoring Program (VCMP) apply to users in all of our supported countries. The Visa Fraud Monitoring Program-3DS (VFMP-3DS) is a third program that only applies to users based in the US. The timelines used by either program depend on which threshold—Standard or Excessive—has been exceeded.
Each timeline spans a 12-month period and determines what actions are taken on a monthly basis. At the beginning of each month Visa reviews your previous month’s activity to see if it has exceeded any of their established thresholds. If so, we’ll reach out and discuss this with you.
Early warning notifications
Visa operates an early warning system that warns users—via Stripe—who are at risk of being placed into a monitoring program. Users who meet the early warning threshold are not immediately placed into the program. Instead, they are given the opportunity to reduce the level of fraud on their account to avoid that from happening.
Remediation
Users are removed from Visa’s programs once their level of disputes or fraud drops below the Standard threshold for three consecutive months. The following three months are considered a “tracking” period. If a user exceeds any of the thresholds in this period, they are immediately placed back into the program and the original timeline is resumed—a new timeline is not started. Additionally, if a user exceeds the Excessive threshold, they are removed from the program only when their fraud or dispute levels falls below the Standard threshold.
As part of the remediation process, you may be required to provide Stripe with details on the steps you are taking and when these have been, or will be, implemented.
VFMP: Visa Fraud Monitoring Program
VFMP applies to users with an excessive level of fraud on their account, which is calculated using both fraudulent chargebacks and TC40 data. Each threshold for this program has two criteria, both of which must be exceeded:
- The total volume in U.S. dollars of Visa payments that are fraudulent (Fraud Volume)
- The ratio of the volume in fraudulent Visa payments to all payments (Fraud Rate)
| Fraud Volume | Fraud Rate | Fines |
|---|---|---|
| $55,000 | 0.75% | None. You have the opportunity to take action that reduces your fraud level before it exceeds a threshold where fines are incurred. |
Early warning notifications may not occur if your account immediately matches or exceeds the Standard or Excessive thresholds of VFMP.
| Fraud Volume | Fraud Rate | Fines |
|---|---|---|
| $75,000 | 1% | None. You have the opportunity to take action that reduces your fraud level before it exceeds a threshold where fines are incurred. |
There are no fines for users who meet or exceed this threshold. However, U.S. users in this program lose liability shift on 3D-Secure transactions immediately. Users located outside of the U.S. lose this starting in either month five or at Excessive thresholds. Liability shift is not restored until fully exiting the program after the three "tracking" months. Users must still take action to reduce their fraud level before it exceeds a threshold where fines are incurred.
| Fraud Volume | Fraud Rate | Fines |
|---|---|---|
| $250,000 | 2% | Fines begin immediately and continue on a monthly basis until removal from program. Refer to the timeline for more information. |
The following timeline applies to the 12-month period that a user is part of a card monitoring program.
| Months 1–3 | Months 4–6 | Months 7–9 | Months 10–12 |
|---|---|---|---|
| $10,000 per month | $25,000 per month | $50,000 per month | $75,000 per month |
Users in this program lose liability shift on 3D-Secure transactions immediately and this is not restored until fully exiting the program after the three "tracking" months.
VFMP: Visa Fraud Monitoring Program-3DS (U.S.-only)
VFMP-3DS applies to U.S. users with an excessive level of domestic 3D-Secure fraud on their account. Each threshold for this program has two criteria, both of which must be exceeded:
- The total volume in U.S. dollars of Visa 3DS domestic payments that are fraudulent (Fraud Volume)
- The ratio of the volume in fraudulent payments to 3DS domestic payments (Fraud Rate)
| Fraud Volume | Fraud Rate | Fines |
|---|---|---|
| $5,000 | 0.50% | None. You have the opportunity to take action that reduces your fraud level before it exceeds a threshold where penalties are incurred. |
| Fraud Volume | Fraud Rate | Fines |
|---|---|---|
| $7,500 | 0.75% | None, but liability shift on domestic 3DS transactions is lost while in the program and until a user has fully exited. |
VCMP: Visa Chargeback Monitoring Program
VCMP applies to users with an unusually high level of disputed payments on their account. Each threshold for this program has two criteria, both of which must be met or exceeded:
- The total number of payments that have been disputed (Dispute Count)
- The ratio of disputed payments to all payments (Dispute Rate)
| Dispute Count | Dispute Rate | Fines |
|---|---|---|
| 75 | 0.75% | None. You have the opportunity to take action that reduces your dispute level before it exceeds a threshold where fines are incurred. |
Early warning notifications may not occur if your account immediately matches or exceeds the Standard or Excessive thresholds of VCMP.
| Number of Disputes | Dispute Rate | Fines |
|---|---|---|
| 100 | 1% | Fines begin after four months and continue on a monthly basis until removal from the program. See timeline for more information. |
The following timeline applies to the 12-month period that a user is part of a card monitoring program.
| Months 1–4 | Months 5–7 | Months 8–9 | Months 10–12 |
|---|---|---|---|
| Workout period | $50 per dispute | $100 per dispute $25,000 review fee |
$100 per dispute $25,000 review fee |
During the workout period, you have the opportunity to take action that reduces your dispute level before fines are incurred.
| Number of Disputes | Dispute Rate | Fines |
|---|---|---|
| 1,000 | 2% | Fines begin immediately and continue until removal from the program. See timeline for more information. |
The following timeline applies to the 12-month period that a user is part of a card monitoring program.
| Months 1–6 | Months 7–12 |
|---|---|
| $50 per dispute | $50 per dispute $25,000 review fee |
Mastercard monitoring programs
The Mastercard Chargeback-Monitored Merchant (CMM) and Mastercard Excessive Chargeback Merchant (ECM) programs apply to users in all of our supported countries. If your account’s dispute level exceeds the thresholds for CMM, you’re placed into this program and notified by Stripe. If your dispute level continues to rise and it exceeds a higher threshold for two consecutive months, you are then placed into ECM.
Each program has a different threshold for the following two criteria, both of which must be met or exceeded:
- The total number of payments that have been disputed (Dispute Count)
- The Chargeback-to-Transaction Ratio (CTR)
The CTR is a ratio of disputed payments to all payments. It’s calculated as the number of Mastercard disputes received in a calendar month compared to the total number of Mastercard payments from the preceding month.
Remediation
Users in these programs are removed once their level of disputes drops below the CMM threshold for two consecutive months. If a user is part of ECM and their dispute level is reduced to a level that still exceeds the threshold for CMM (e.g., a CTR between 1-1.5%), they are moved back to that program.
As part of the remediation process, you may be required to provide Stripe with details on the steps you are taking and when these have been, or will be, implemented.
CMM: Mastercard Chargeback-Monitored Merchant
CMM applies to users with an excessive level of disputed Mastercard payments on their account.
| Dispute Count | CTR | Fines |
|---|---|---|
| 100 | 1% | None. You have the opportunity to take action that reduces your dispute level before it exceeds a threshold where fines are incurred. |
There is no timeline for users who meet or exceed this threshold. Users must still take action to reduce their dispute level before it exceeds a threshold where fines are incurred.
ECM: Mastercard Excessive Chargeback Merchant
ECM applies to users who are already part of the Chargeback-Monitored Merchant (CMM) program with a dispute level that has continued to rise. The threshold for ECM is slightly higher than CMM, and must be exceeded for two consecutive calendar months.
| Dispute Count | CTR | Fines |
|---|---|---|
| 100 | 1.5% | Fines vary from user to user and are calculated based upon an amount set by Mastercard, the user's operating dispute rate and volume of disputes. |
ECM operates on a 12-month timeline that determines what fines and actions take place. If a user becomes part of this program, Mastercard communicates—via Stripe—the actions and fines that apply.
Next steps
You may want to learn more about disputes and fraud, how to manage them, and how to prevent them from happening: