Beating payments fraud in 2020
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
The Visa Merchant Fraud Program (intra- and interregional) and Visa Global Merchant Chargeback Monitoring Program (GMCMP) will no longer exist.
By default, the new program structure only takes international transactions into account.
The exceptions to this rule are Germany and UK. Domestic and international transactions will be monitored for those countries, in all other Visa Europe 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 once they get above the defined thresholds. ‘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):
5122 – Drugs, Drug Proprietors, and Druggists Sundries
5912 – Drug Stores, Pharmacies
5962 – Direct Marketing – Travel-Related Arrangement Services
5966 – Direct Marketing – Outbound Telemarketing Services
5967 – Direct Marketing – Inbound Telemarketing Merchants
5993 – Cigar Stores and Stands
7995 – Gambling Transactions
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’:
High-risk program thresholds apply to high-risk merchants (see below).
All merchants not defined as ‘High-Risk merchants’ are defined as ‘Standard merchants’. Standard program threshold applies to Standard merchants.
New ‘Visa Fraud Monitoring Program' (VFMP) thresholds:
|Fraud rate||Fraud $||Fees and timelines|
|Standard threshold||1%||$75k||Chargeback reason code 93 *|
|High risk threshold||2%||$250k||Chargeback reason code 93 *<br> Month 1-3: $10k<br> Month 4-6: $25k<br> Month 7-9: $50k<br> Month 10-12: $75k*|
New ‘Visa Chargeback Monitoring Program’ (VCMP) thresholds:
|CB rate||CB count||Fees and timelines|
|Standard threshold||1%||100||Month 1-4: No fees<br> Month 5-7: €45 per CB<br> Month 8-9: €85 per CB<br> Month 10-12: €85 per CB plus €21,750 review fee|
|High risk threshold||2%||500||Month 1-6: €85 per CB<br> Month 7-12: €85 per CB plus €21,750 review fee|
*The merchant is subject to chargeback liability for fraudulent transactions (Chargeback Reason Code 93).
To learn more about the full impact of these changes, including details of timelines, fines and more, please download the manual below:
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