Visa VDMP triggers at 0.9% + 100 chargebacks/month. Mastercard ECM at 1.5%. Once in a monitoring program, you pay per-chargeback fees, submit a remediation plan, and get audited. Excessive-tier merchants face reserve requirements and termination. Every ecommerce merchant needs to know their chargeback rate, their acquirer's cap, and how to bring the rate down when it climbs.
The thresholds
Visa Dispute Monitoring Program (VDMP):
- Standard: 0.9% chargeback rate + 100 chargebacks/month
- Excessive: 1.8% + 1,000 chargebacks/month
Mastercard Excessive Chargeback Merchant (ECM):
- Standard: 1.5% + 100 chargebacks/month
- Excessive: 3.0% + 300 chargebacks/month
Amex Enhanced Dispute Monitoring:
- Threshold varies but typically 1.0% for CNP
Rate = chargebacks this month / total transactions previous month. Note the offset — this month's chargebacks over last month's transactions. Fast growth can distort the rate.
What monitoring involves
Visa VDMP entry: Acquirer receives compliance notice. Merchant has 4 months to bring rate below 0.9%. Per-chargeback fees ($5–$25) apply during the window.
Mastercard ECM entry: Acquirer receives notice. Merchant submits a remediation plan within 30 days. Per-chargeback fees ($25 + $500/month program fees) apply.
During the program, the acquirer is also on the hook — networks escalate to acquirer-level penalties if remediation doesn't happen. Acquirers often impose reserve requirements or transaction volume caps to protect themselves.
Consequences of crossing
Standard tier is manageable — expensive but survivable: per-chargeback fees, remediation plan, acquirer scrutiny, possible reserve.
Excessive tier is severe: higher per-chargeback fees ($25+ MC), program fees, reserve almost certain, acquirer may terminate if no progress in 4–6 months, and MATCH List (Terminated Merchant File) placement for 5 years.
MATCH List placement is the ultimate consequence. Merchants on MATCH have extreme difficulty getting new acquirer accounts for 5 years.
How to bring rate down
Two levers: reduce chargebacks or increase transactions.
Reduce chargebacks:
- Enable Ethoca/Verifi alerts — pre-dispute refunds don't count as chargebacks. Fastest lever above threshold.
- Fix descriptor issues.
- Improve delivery notifications and cancellation UX.
Increase transactions:
- Grow revenue (slow).
- Split into multiple MIDs by product category.
- Move high-risk products to a separate MID.
Critically: won chargebacks still count. Rate is measured at filing, not outcome. Prevention is the only lever that reduces rate.
Frequently asked questions
What's Visa's chargeback rate threshold?
0.9% + 100 chargebacks/month for standard VDMP. 1.8% + 1,000/month for excessive tier.
What's Mastercard's threshold?
1.5% + 100 chargebacks/month for standard ECM. 3.0% + 300/month for excessive.
Does winning a chargeback reduce my rate?
No. Rate counts at filing, regardless of outcome. Only preventing chargebacks from being filed (via alerts) reduces the rate.
Post reflects public documentation, industry surveys, and Aurai's own book of disputes as of the publish date. Visa, Mastercard, American Express, Discover, Stripe, PayPal, and Shopify are trademarks of their respective owners; Aurai is independent and not endorsed by any of them. Network rules change — always verify current official rules before acting on any specific tactic.