What In The World Is Visa Fraud Monitoring Program? Can You Avoid It?

Update (September 2026): Visa retired the Visa Fraud Monitoring Program (VFMP) on April 1, 2025, consolidating it with the Visa Dispute Monitoring Program (VDMP) into a single Visa Acquirer Monitoring Program (VAMP). The mechanics below describe the retired VFMP for historical reference. For current thresholds, fees, and enforcement dates, see the VAMP guide linked above.

Like the Visa Dispute Monitoring Program (VDMP), Visa Fraud Monitoring Program (VFMP) was an aspect of Visa’s fiduciary responsibility to its stakeholders. VFMP tracked merchants that got excessive fraud cases, and merchants worked to avoid enrollment in it.

Visa tracked every vendor’s dispute activity to help curtail different forms of fraud risks and promote the use of fraud controls. If a vendor reached Visa’s excessive fraud and disputes threshold, Visa would notify the acquirer. The acquirer is a financial institution that accepts and processes credit and debit card transactions on behalf of the vendor. With that notification, Visa would place the vendor in VFMP to reduce disputes.

Below were the three stages of the legacy Visa Fraud Monitoring Program:

1. Warning Stage: As the name suggests, the early warning stage prompted merchants to take action to find the causes of rising fraud levels. No fines applied at this stage since no rules had been violated yet.
2. Standard Stage: At the standard VFMP stage, Visa gave merchants a four-month window to get fraud issues under control.
3. Excessive Stage: This final stage was for vendors that breached the excessive Visa fraud threshold. Visa automatically placed vendors in a high-risk Merchant Category Code (MCC) in this bracket.

A merchant’s Visa fraud rate, the dollar value of transactions lost to fraud over a given month relative to total transaction value for the same period, determined where the merchant fell in the strata. Mastercard runs a comparable program for merchants with excessive chargebacks, called the Excessive Chargeback Merchant program.

Mastercard also runs a separate merchant audit program, the Mastercard GMAP, which reviews risk controls directly rather than tracking chargeback ratios.

Exposé on Visa Fraud Monitoring Program (VFMP)

Visa had developed two categories of fraud monitoring programs under VFMP to keep fraud as low as possible. Tools like real-time chargeback alerts help catch disputes before they escalate today.

1. Visa Fraud Monitoring Program (VFMP)
2. Visa Fraud Monitoring Program - 3D Secure (VFMP-3DS)

The former is for everyone worldwide, while the latter is for only US merchants.

Visa reviewed merchant accounts monthly (ideally at the beginning of each month) and automatically enrolled those failing to comply with the VFMP standards into the 12-month program. Domestic and cross-border activity counted towards monthly totals for US, Europe, Canada, Australia, and Brazil users. Visa only considered cross-border transactions for merchants in other regions.

Formula For Calculating Visa Fraud Rates

Visa calculated the threshold for a merchant’s account based on the fraud amount and ratio. In other words, the formula for calculating the fraud-to-sales rate was the sum of all fraud reports (a.k.a TC40 reports) received in the current month divided by monthly sales volume. For example, if a merchant received 100 fraud reports from 10,000 transactions in a given month, the fraud-to-sales ratio (fraud rate) was determined as follows: 100/10000x100 = 1%.

Likewise, to figure out a merchant's Visa Fraud Monitoring Program - 3D Secure fraud ratio, Visa used this formula: the USD amount of fraud reported on 3D Secure transactions in the current month divided by the sales amount processed through 3DS in the same month. The best long-term fix remains to prevent chargebacks before they happen.

The level of penalty a merchant received depended on the outcome of the above calculation, which was the number of months the account had exceeded the established thresholds. For instance, exceeding thresholds for the first time became identification Month 1; the second time became identification Month 2.

Understanding Visa Fraud Monitoring Program Thresholds

On October 1, 2019, Visa switched gears on its fraud mitigation processes by revising the threshold of the VFMP. The table below shows the risk thresholds Visa used to monitor vendors' transactions before VFMP was retired on April 1, 2025.

Visa Fraud Monitoring Program - 3D Secure (VFMP-3DS) had only the early warning and standard classifications.

The standard Visa Fraud Monitoring Program enforcement period was eight months. Although Visa did not place fines on vendors for standard VFMP, merchants did not enjoy fraud liability protection privileges. Visa automatically assigned merchants liability for fraud-related disputes. More so, excessive fraud merchants spent 12 months in the VFMP, which attracted costly non-compliance fees each month they breached the acceptable threshold. A structured approach to chargeback management keeps disputes under control today.

In essence, moving a merchant into the excessive fraud bracket signaled that Visa considered their margin of error in avoiding fraudulent transactions intolerable. The good news was that Visa tracked only the first ten fraudulent transactions or ten chargebacks (for VDMP) from a specific cardholder. If a scammer used one card to run twenty attacks on a business in one month, Visa only considered ten transactions.

What are the Consequences of Breaching Visa Fraud Monitoring  Program Thresholds?

Crossing the VFMP threshold used to raise operational costs exponentially, and it could also kill your business. For example, excessive fraud merchants incurred non-compliance fees for every month they breached the acceptable threshold, as shown below:

Merchants could only exit the Visa Fraud Monitoring Program after maintaining their fraud rate below the established threshold for three consecutive months. If a merchant navigated two months successfully and then breached the threshold again, Visa reset the count back to zero. Automating chargeback recovery can recover revenue that would otherwise stay lost.

Further, a merchant could only be transferred from a standard VFMP to an excessive-risk VFMP, not vice versa. Visa did not reclassify a vendor from the excessive risk monitoring program to the standard monitoring program, irrespective of their fraud resolution progress.

NOTE: Besides Visa, other parties are involved in chargeback and fraud mediation processes. Whenever a client or their bank files a transaction dispute, Visa first overturns the transaction from your acquirer. Your bank will then withdraw the transaction value from your account to compensate for its loss.

Even though banks know there are unavoidable chargebacks and fraud cases, acquirers and processors often see vendors that get excessive disputes as high risks. They’d instead drop such vendors, freezing or canceling their accounts before they even breach thresholds. First, calculate your chargeback ratio to know where you stand.

Without an active merchant account, there’s no way you can process card payments. And you cannot receive new transactions or withdraw available funds either. As one payments expert noted, “They feel you can’t handle your persistent issue of fraud, and by that, do not deserve the benefit of the doubt when a customer claims criminal fraud."

Here's more: if a merchant failed to remedy the situation, Visa could block it from accepting Visa payments altogether and permanently ban it from the network, which was a probable nail in the coffin for the business. Hence, merchants had to take every precautionary measure in the book to reduce fraud exposure risk. That principle still holds today under VAMP, which absorbed VFMP's monitoring role.

How to Avoid the Visa Fraud Monitoring Program

The average eCommerce merchant in the United States deals with over 1,200 monthly fraud attacks. Being one of the defacto card networks, Visa is not lenient on fraud cases. Failure to keep a fraud rate low still means losing access to the platform. Today, that monitoring happens under VAMP, which replaced VFMP, so keeping your fraud rate low should remain a priority for your team.

Below are some recommendations to help you get started: Card networks enforce chargeback threshold limits strictly.

Get an Education on Online Fraud

If you don’t know what constitutes fraud, you will always be their prey. Do you know how to recognize suspicious email addresses? Are you conversant with order anomalies, fraud pattern recognition techniques, and the latest developments in the industry? Do you have active SSL certificates and tools to block potentially fraudulent accounts from accessing your eCommerce store? You can’t safeguard your business effectively if you don’t know how to spot and stop fraud.

Review Flagged Transactions Manually

Manually reviewing transactions is daunting, considering the volume of work a merchant must do to get your business going. However, pairing a digital assessment with a manual review helps increase better judgment. If you receive a transaction from a suspicious IP address that seems potentially fraudulent, you might panic and block all subsequent transactions. However, it's vital to remember that not all transactions flagged as doubtful by fraud detection software are actually fraudulent. In fact, most of these flagged transactions could be legitimate. That's why merchants using Chargeflow's dispute and fraud automation service are getting an unbelievable value for money as the system pairs its powerful analytics with human intelligence to maximize outcomes.

Get Support from Fraud Experts

Digital fraud is highly sophisticated these days. If you don't have the budget to build sophisticated, high-tech fraud detection mechanisms, you will most likely fall prey to their tricks every time. And even if you have a team of quick-eyed analysts to sift out every fraudulent transaction, it's an expensive task. It makes more business sense to get dedicated external support with reliable tools like Chargeflow. Card-network chargeback rules shape every dispute.

Chargeflow’s highly sophisticated, industry-first Fraud Scoring Technique can help you score transactions based on your requirements. You can quickly categorize transactions based on industry standards, recurrent fraud issues, client zones, etc.

Learn how Chargeflow can help you build a brand that nourishes the world without the risk of fraud hampering your growth prospects.