Marginal Gains #4: Recovering payments
To eliminate the 60-to-90 day reporting lag, all programs will be based on reported fraud and sales of the previous month.
Uniform program ratios and timelines
This change will help merchants to align domestic and global metrics, timelines and fees across all markets.
New rules and policies
Merchants will be defined as either ‘Standard merchants’ or ‘High-Risk merchants’ There are separate programs for each classification (details of classification below).
The purpose of this change is to better align programs across all regions
The purpose of this change is to better align programs across all regions, thereby making it easier for merchants to adjust their practices within the given timeframes.
The changes are as follows:
Legacy programs discontinued
Programs such as: Visa Risk Identification Service Program (RIS) and Visa Merchant Chargeback Monitoring Program (MCMP) will no longer exist.
Domestic and international transactions will be monitored in Australia, Brazil, Canada and the US. In all other Visa Inc. markets only international transactions will be monitored.
High-Risk vs Standard timelines
All merchants qualified as ‘High-Risk Merchants’ will enter the enforcement period directly and incur fines immediately. ‘Standard Merchants’ will have a notification period of one month followed by a three-month period to get below the threshold.
High risk merchants fulfill at least one of the following criteria:
1. Those who have a high-risk merchant category code (MCC):
5962 - Direct Marketing - Travel-Related Arrangement Services
5966 - Direct Marketing - Outbound Telemarketing Merchants
5967 - Direct Marketing - Inbound Telemarketing Merchants
7995 - Betting, including Lottery Tickets, Casino Gaming Chips, Off-Track Betting and Wagers at Race Tracks
2. Merchants that have been moved from the standard timeline to the high-risk timeline, at Visa's discretion, based on a review of the merchant’s performance or inappropriate business practices (e.g., use of abusive free trial policies, negative renewal options etc).
3. Merchants that reach or exceed the program’s ‘excessive threshold’:
All merchants not defined as ‘High-Risk merchants’ are defined as ‘Standard merchants’
New Visa Fraud Monitoring Program Thresholds:
|Fraud Rate||Fraud $||Fees|
|Standard threshold||1%||$75k||No fees*|
|Excessive threshold||2%||$250k||Month 1-3: $10kMonth 4-6: $25kMonth 7-9: $50kMonth 10-12: $75k*|
|Early warning threshold||0.75%||$50k||N/A|
New Visa Chargeback Monitoring Program Thresholds:
|CB Rate||CB Count||Fees|
|Standard threshold||1%||100||Month 1-4: No feesMonth 5-7: $50 per CBMonth 8-9: $100 per CB & $25k review fee|
|Excessive threshold||2%||500||Month 1-6 $100 per CBMonth 7-12: $100 per CG & $25k review fee|
|Early warning threshold||0.75%||75||N/A|
*The merchant may be subject to chargeback liability for fraudulent transactions (Chargeback Reason Code 93).
Please note that this relates to Visa Inc., and programs for Visa Europe will not change at this moment.
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