Network Monitoring Programs
Last Updated: 2025-02-17 Status: Complete
Card networks operate monitoring programs to identify merchants and acquirers with excessive chargebacks or fraud. Understanding these programs is essential for PayFac risk management.
Quick Reference
| Program | Network | Metric | Threshold | Fine Range |
|---|---|---|---|---|
| VAMP | Visa | Disputes + Fraud | 1.5% | $4-8/tx |
| ECP | Mastercard | Chargebacks | 1.5% + 100 | $1K-200K/mo |
| EFM | Mastercard | Fraud | 0.5% | $500-100K/mo |
| MATCH | All | Termination | N/A | 5-year ban |
Visa Acquirer Monitoring Program (VAMP)
Effective April 1, 2025: VAMP replaced both VDMP (Visa Dispute Monitoring Program) and VFMP (Visa Fraud Monitoring Program). All 2026 operations should use VAMP guidelines.
VAMP Overview
VAMP combines dispute and fraud monitoring into a single program with unified thresholds.
VAMP Ratio Calculation
VAMP Ratio = (TC40 Fraud Reports + TC15 Disputes) / TC05 Settled Transactions
Key Difference from Legacy: VAMP includes disputes that never became chargebacks (TC15), not just completed chargebacks.
Merchant Thresholds
| Region | Threshold | Transaction Count | Effective Date |
|---|---|---|---|
| North America | 1.5% (150 bps) | ≥1,500 monthly | April 1, 2026 |
| European Union | 1.5% (150 bps) | ≥1,500 monthly | April 1, 2026 |
| Asia Pacific | 1.5% (150 bps) | ≥1,500 monthly | April 1, 2026 |
| Latin America | 1.5% (150 bps) | ≥1,500 monthly | April 1, 2025 |
| Caribbean | 1.5% (150 bps) | ≥1,500 monthly | April 1, 2025 |
| CEMEA | 2.2% (220 bps) | ≥150 monthly + $75K | Current |
The reduction from 2.2% to 1.5% for North America/EU/APAC represents a 32% tightening of acceptable limits. Merchants currently between 1.5-2.2% must remediate before April 2026.
Acquirer Thresholds
| Tier | Portfolio Threshold | Enforcement Start |
|---|---|---|
| Above Standard | ≥0.5% (50 bps) | January 1, 2026 |
| Excessive | ≥0.7% (70 bps) | October 1, 2025 |
VAMP Fine Structure
| Entity | Tier | Fee per Dispute/Fraud |
|---|---|---|
| Acquirers | Above Standard | $4 |
| Acquirers | Excessive | $8 |
| Merchants | Excessive | $8 |
VAMP Grace Period
- 3 months for first-time offenders within a rolling 12-month period
- Fines begin in month 4 if thresholds not corrected
- Must remain below thresholds for 3 consecutive months to exit
VAMP Timeline
Legacy Visa Programs (Historical Reference)
VDMP (Retired April 2025)
| Tier | Ratio | Count | Fines |
|---|---|---|---|
| Early Warning | 0.65% | ≥75 | $0 |
| Standard | 0.9% | ≥100 | $0 (months 1-4), $50/dispute (5+) |
| Excessive | 1.8% | ≥1,000 | $50/dispute (immediate) |
VFMP (Retired April 2025)
| Tier | Fraud Rate | Fraud Amount | Fines |
|---|---|---|---|
| Standard | >0.9% | ≥$75,000 | $25,000/month (month 5+) |
| Excessive | >1.8% | N/A | $10,000-$75,000/month escalating |
Mastercard Excessive Chargeback Program (ECP)
ECP monitors merchants with high chargeback ratios and counts.
ECP Thresholds
| Tier | Monthly Chargebacks | Ratio | Both Required |
|---|---|---|---|
| ECM | ≥100 | ≥1.5% | YES |
| HECM | ≥300 | ≥3.0% | YES |
Mastercard uses a lagged denominator: Current month chargebacks ÷ Prior month sales
ECP Fine Schedule
| Months in Program | ECM Fine | HECM Fine | Additional |
|---|---|---|---|
| 1 | $0 | $0 | Grace period |
| 2 | $1,000 | $1,000 | - |
| 3 | $1,000 | $2,000 | - |
| 4-6 | $5,000 | $10,000 | +$5/CB after first 300 |
| 7-11 | $25,000 | $50,000 | +$5/CB after first 300 |
| 12-18 | $50,000 | $100,000 | +$5/CB after first 300 |
| 19+ | $100,000 | $200,000 | +$5/CB after first 300 |
ECP Additional Fees
| Fee Type | Amount |
|---|---|
| Reporting fee | $100 |
| Issuer Recovery Assessment | $5/chargeback (beyond first 300, month 4+) |
ECP Exit Criteria
- Below ECM threshold for 3 consecutive months
- No probationary period after exit
- Immediate re-entry if thresholds exceeded again
Mastercard Excessive Fraud Merchant (EFM)
EFM monitors merchants with high fraud rates.
EFM Entry Criteria (ALL must be met)
| Criterion | Threshold |
|---|---|
| Transaction volume | ≥1,000 Mastercard transactions/month |
| Fraud amount | ≥$50,000 USD/EUR (reason code 4837) |
| Fraud ratio | ≥0.5% (50 bps) |
| 3DS usage (non-regulated) | <10% |
| 3DS usage (regulated - EU) | <50% |
Australian Exception: <0.2% ratio AND <$15,000 USD fraud claims
EFM Ratio Calculation
Fraud Ratio = Current month fraud chargebacks / Prior month sales volume
EFM Fine Structure
| Month | Fine Range |
|---|---|
| 1 | $0 (grace period) |
| 2+ | $500 - $100,000 (escalates monthly) |
EFM Exit Criteria
- Below ALL EFM thresholds for 3 consecutive months
MATCH List
MATCH (Member Alert to Control High-Risk Merchants) is an industry-wide database of terminated merchants.
MATCH Overview
MATCH Duration
- 5 years from placement date
- Automatic removal after 5 years (unless re-added)
MATCH Placement Timeline
Acquiring banks must add merchant within 5 days of account termination for qualifying violations.
MATCH Reason Codes
| Code | Reason | Early Removal |
|---|---|---|
| 01 | Account Data Compromise | No |
| 02 | Common Point of Purchase | No |
| 03 | Laundering | No |
| 04 | Excessive Chargebacks | No |
| 05 | Excessive Fraud | No |
| 07 | Fraud Conviction | No |
| 09 | Bankruptcy/Liquidation/Insolvency | No |
| 10 | Violation of Standards | No |
| 11 | Merchant Collusion | No |
| 12 | PCI-DSS Non-Compliance | Yes (with compliance verification) |
| 13 | Illegal Transactions | No |
| 14 | Identity Theft | No |
MATCH Impact
| Impact | Description |
|---|---|
| Processing denied | Cannot obtain new merchant account |
| Industry-wide | All Mastercard member banks see listing |
| Visa awareness | Visa processors often check MATCH too |
| High-risk option | Some high-risk processors work with MATCH merchants (higher fees) |
MATCH Removal
| Scenario | Removal Possible |
|---|---|
| PCI non-compliance (code 12) | Yes, with compliance proof |
| All other codes | No, must wait 5 years |
| Error/dispute | Appeal process available |
Program Comparison
| Factor | VAMP | ECP | EFM |
|---|---|---|---|
| Network | Visa | Mastercard | Mastercard |
| Metric | Disputes + Fraud | Chargebacks | Fraud |
| Base Threshold | 1.5% | 1.5% + 100 | 0.5% |
| Fine Start | Month 4 | Month 2 | Month 2 |
| Exit Requirement | 3 months below | 3 months below | 3 months below |
| Grace Period | 3 months | 1 month | 1 month |
PayFac Program Management
Monitoring Dashboard
| Metric | Calculation | Alert Level |
|---|---|---|
| Portfolio VAMP ratio | Total disputes/fraud ÷ Total transactions | > 0.5% |
| Portfolio ECP ratio | Total chargebacks ÷ Total sales | > 1.0% |
| Individual merchant ratio | Per-merchant calculation | > 0.75% |
| Program proximity | Current ratio ÷ Threshold | > 70% |
Remediation Actions
Sub-Merchant Communication
| Stage | Communication |
|---|---|
| Onboarding | Explain thresholds and consequences |
| Warning | Formal notice with remediation deadline |
| Breach | Suspension notice with appeal option |
| Termination | Final notice with MATCH warning |
Related Topics
- Merchant Monitoring - Internal monitoring systems
- Reserve Management - Financial protection
- Chargeback Management - Reducing chargebacks
Ecosystem Context:
- PayFac Model - PayFac risk management overview
- Acquiring Banks - Acquirer compliance obligations
- Card Network Role - Network rule enforcement
Onboarding Context:
- Merchant Agreements - MATCH listing and termination procedures
- Ongoing Monitoring - Preventing program entry through monitoring