Visa is introducing significant updates to its Visa Acquirer Monitoring Program (VAMP), aimed at improving fraud prevention and compliance for acquirers and merchants. The program will become effective in April 2025 and replaces several previous initiatives, including the Visa Dispute Monitoring Program (VDMP) and the Visa Fraud Monitoring Program (VFMP). This article breaks down the critical elements of VAMP, its key updates, and the implications for those in the payment ecosystem.
Overview of VAMP: Purpose and Key Changes
VAMP’s purpose is straightforward: to monitor fraud and disputes within the payment ecosystem, holding acquirers responsible for their portfolios’ activity. The program consolidates previous fraud and dispute monitoring efforts into one unified system. By doing so, it seeks to simplify compliance, establish clearer fraud thresholds, and enforce penalties for non-compliance more efficiently.
Some notable changes in VAMP include:
- Unified global fraud thresholds for domestic and cross-border transactions.
- Consolidation of multiple programs into one fraud monitoring initiative.
- Introduction of the Visa Account Attack Intelligence (VAAI) Score, a system powered by artificial intelligence to detect fraud faster and more effectively.
Table 1: Key Changes in VAMP Compared to Previous Programs
| Feature | VAMP (2025) | Previous Programs (VDMP/VFMP) |
|---|---|---|
| Global Fraud Thresholds | Unified for better consistency | Varied across regions |
| Enumeration Attack Monitoring | Based on specific metrics | No clear enumeration criteria |
| Program Consolidation | 38 processes into 1 | Managed separately under different programs |
| Use of AI (VAAI Score) | Real-time fraud detection | Limited AI use |
| Non-Compliance Grace Period | 3-month grace period | Immediate penalties |
Key Updates in VAMP: Important for Acquirers and Merchants
The updates in VAMP introduce new fraud and dispute thresholds, stricter penalties, and the inclusion of emerging fraud tactics like enumeration attacks. Below is a detailed breakdown of these changes and what they mean for acquirers and merchants.
- New Fraud and Dispute Thresholds:
Visa has set stricter limits for card-not-present fraud. For domestic and cross-border transactions, acquirers must stay under a 1% fraud-to-sales ratio, or face penalties. Additionally, the minimum dispute threshold is set at 750 disputes or a 1% dispute ratio per month. These thresholds will help acquirers and merchants better manage risks. - Enumeration Attack Monitoring:
Enumeration attacks—where fraudsters attempt to validate stolen card details—are increasingly common. Visa’s updated VAMP metrics include an enumeration ratio, calculated by dividing confirmed enumerated transactions by total sales. Merchants exceeding an enumeration rate of 20% will be flagged for further monitoring. - Enforcement and Penalties:
The revised VAMP also introduces a tiered penalty system based on the severity of non-compliance. Acquirers or merchants that surpass thresholds will face penalties such as $5 to $10 per dispute and $25,000 for acquirers that exceed fraud or dispute limits.
Table 2: VAMP Penalties and Thresholds
| Metric | Threshold | Penalty |
|---|---|---|
| Fraud Threshold (CNP) | $500,000 or 1% fraud-to-sales ratio | $10 per dispute; possible disqualification |
| Enumeration Rate | Over 20% enumerated transactions | Warning, then increasing fines |
| Dispute Threshold | 750 disputes or 1% dispute ratio | $5 to $10 per dispute |
Compliance and Enforcement: What Happens if You Exceed Thresholds?
Non-compliance with VAMP thresholds can have severe financial consequences. Acquirers are categorized as Above Standard or Excessive depending on their performance relative to industry standards. Visa’s penalties are designed to encourage immediate corrective action.
- Above Standard: Acquirers exceeding thresholds but still within tolerable limits must rectify issues quickly to avoid further escalation.
- Excessive: Acquirers at this level face penalties of up to $10 per dispute and may be disqualified from certain Visa programs. Repeated offenses can result in additional fines, starting at $25,000 for acquirers.
To help businesses manage these risks, it’s advisable to partner with reliable fraud prevention solutions. Merchanto.org, for instance, offers tools and expertise in managing disputes and fraud prevention, making them a key partner for businesses looking to stay compliant. Merchanto is an official partner of Visa and MasterCard in chargeback prevention. Learn more by visiting their website at Merchanto.org.
Impact on Acquirers and Merchants
VAMP’s updates place a greater burden on acquirers to monitor their merchants’ activity closely. Acquirers are now expected to implement robust fraud detection systems and to hold merchants accountable for their fraudulent activities. Merchants, on the other hand, need to upgrade their risk management practices to avoid penalties.
Acquirers should consider investing in advanced fraud prevention technologies, such as the AI-driven VAAI Score, which detects fraudulent activities in real time. Merchants, meanwhile, must focus on compliance and ensure they do not trigger enumeration alerts or exceed dispute thresholds.
Here are several actions acquirers and merchants should take:
- Implement robust fraud detection tools, such as Visa’s VAAI Score for real-time alerts.
- Monitor transactions regularly to ensure fraud and dispute ratios remain within Visa’s thresholds.
- Train employees on fraud prevention and compliance measures to ensure everyone in the organization understands the new requirements.
Table 3: Recommended Tools and Actions for VAMP Compliance
| Tool/Action | Purpose | Provider |
|---|---|---|
| VAAI Score | AI-driven fraud detection | Visa |
| 3D Secure Authentication | Prevent card-not-present fraud | Visa, MasterCard |
| Fraud Prevention Training | Ensure compliance with VAMP | Internal training; external consultants |
| Regular Monitoring of Transactions | Stay below fraud/dispute thresholds | Payment platforms like Checkout.com |
Fraud Prevention Tools and Strategies
To stay compliant under VAMP, merchants and acquirers must adopt strong fraud prevention tools and strategies. With stricter thresholds and penalties, having the right systems in place is essential.
- Real-Time Fraud Detection:
Visa’s VAAI Score uses AI to identify fraud faster than older static systems. This technology is vital for acquirers and merchants dealing with high volumes of card-not-present transactions. - Enhanced Authentication:
3D Secure is recommended for card-not-present transactions, adding an additional layer of security during the payment process. This authentication method reduces fraud significantly by verifying cardholders before completing the transaction. - Regular Monitoring:
Merchants and acquirers should continuously monitor their transaction volumes and dispute ratios to avoid triggering penalties. Payment platforms like Checkout.com and Braintree offer tools that help with monitoring and compliance reporting.
Conclusion: Preparing for VAMP 2025
The updated Visa Acquirer Monitoring Program introduces stricter thresholds and penalties aimed at reducing fraud and improving compliance. Acquirers and merchants must be proactive in implementing fraud detection tools, monitoring their transactions, and ensuring compliance with Visa’s new guidelines.
To mitigate risks, acquirers and merchants are encouraged to invest in advanced fraud prevention technology, train staff on best practices, and partner with reliable chargeback prevention solutions like Merchanto.org, an official Visa and MasterCard partner. Staying informed and compliant with these new standards will help businesses avoid fines and penalties while ensuring the security of their payment systems.
By adopting these tools and strategies, businesses can effectively manage fraud, remain compliant, and avoid the financial consequences of non-compliance with VAMP.
