Visa Dispute Monitoring Program

The Visa Dispute Monitoring Program (VDMP) is Visa's global program that monitors disputes, defines non-compliance thresholds, identifies when merchant accounts have excessive dispute activity, and requires merchants to reduce disputes to remain compliant with Visa's standards.

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Before October 1, 2019, the Visa Dispute Monitoring Program was called the Visa Chargeback Monitoring Program (VCMP).

Visa identifies a merchant by descriptor and will review the activity under all descriptors monthly for merchant accounts exceeding the thresholds.

For general information about card brand monitoring programs and important terms, visit the Card Brand Monitoring Program's Overview article.

Visa Dispute Monitoring Program details

The Visa Dispute Monitoring Program monitors your merchant account. It uses the dispute count and ratio to determine which threshold your account meets. Based on the threshold and identification month, you will be assessed different levels of fines. The violation statuses dictate whether the account is eligible for fines or other adverse actions.

Identification month refers to the number of months your account has exceeded the established thresholds. For example, the first month over thresholds, your identification month is Month 1, the second month exceeding thresholds, your identification month is Month 2.

The formula the Visa Dispute Monitoring Program uses to calculate your Visa dispute ratio is the count of disputes received in a given month divided by the count of sales processed in the same month (example: June disputes / June sales).

Thresholds

If your merchant account meets the non-compliance thresholds, you could be flagged with one of the following statuses: Early Warning, Standard, Excessive, or High-Risk.

Both dispute count and dispute ratio must be met in order to be flagged in one of these thresholds:

* The Early Warning threshold is not a violation and is not associated with any fine assessments. It is merely an alert that your merchant account is getting close to the violation, which starts at the Standard threshold.

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Before October 1, 2019, the threshold ratios for the Visa Dispute Monitoring Programs were different:

• Early Warning threshold - 0.75%
• Standard threshold - 1.0%
• Excessive threshold - 2.0%

Violation statuses

There are three violation statuses in the Visa Dispute Monitoring Program:

• Notification: The first month that your account is identified in the Standard threshold - there are no fines in this stage
• Workout: The series of months following the Notification that your account is meeting the thresholds where Visa provides time to address the issue of the dispute - there are no fines in this stage
• Enforcement: The first month and any subsequent months that your account is meeting the thresholds and eligible for fines as well as other potential adverse actions sanctioned by Visa

Fines

The fine assessments for the Visa Dispute Monitoring Program are:

* Disqualification means your merchant account would no longer be able to process Visa payments.

Visa can decide to place you in the High-Risk threshold at any time, typically due to high-risk Merchant Category Codes (MCC) or risky processing behaviors. After being flagged in the Excessive or High-Risk thresholds, you will remain at that enforcement level until you exit the program completely. This means that even if your figures reduce to the Standard threshold, you will remain at the Excessive or High-Risk enforcement assessments. Additionally, Visa can require a third-party audit when in these programs.

Note that Visa does offer a non-compliance fine appeal process. However, to appeal an already assessed fine, be sure to be able to present new and compelling information not already shared with Visa in a prior remediation plan. Additionally, there is a USD 5,000 appeal filing fee. Any Visa appeal must be submitted within 30 days of the fine assessment date. Appeals can be incredibly challenging to win. Only consider this option if new information was discovered that would have prevented the violation.

Remediation plan

If you have been identified in the Visa Dispute Monitoring Program, a remediation plan may be requested by Visa. A remediation plan aims to show Visa what actions you are taking to remedy the situation and regain compliance. Information communicated through a remediation plan is reviewed and considered when the card brand issues fine assessments.

The main details you should provide for your remediation plan include, but are not limited to:

• Business description
• Events leading to the increased disputes
• Actions taken to reduce disputes, including implementation dates
• Description of all fraud tools currently enabled

How to exit the program

To exit the Visa Dispute Monitoring Program, your merchant account must be below the Standard threshold for 3 consecutive months. After your merchant account has fully exited the program any subsequent flaggings would start over at Month 1 of that program.

If you have any questions regarding these programs, check out our FAQ or Contact us.