Online transactions have made payments faster and more convenient, but also more attractive to a new generation of fraudsters. To protect both consumers and merchants, payment providers like Visa employ a series of programs to detect fraud early, handle chargebacks, and manage disputes.
One of the more recent implementations of Visa’s fraud detection efforts was the VAMP Program (Visa Acquirer Monitoring Program), which lowered risk thresholds to their lowest ratios yet and simplified what metrics merchants have to track. The initial program took effect in April 2025, with enforcement beginning in October and stricter thresholds beginning in 2026.
Besides VAMP, we’ll cover everything you need to know as a merchant with regards to how Visa handles disputes, records and settles chargebacks, and about Visa fraud detection.
What is Visa’s Fraud Monitoring Program?
Visa’s fraud monitoring programs—largely represented by VAMP—are a series of tools and metrics that helps merchants detect and reduce fraudulent transactions by using advanced algorithms to monitor card transactions in real time. These programs are designed to track suspicious patterns, including excessive chargebacks, unusual transaction volumes, or discrepancies in transaction data. When merchants reach certain thresholds for fraud or chargeback activity, Visa flags their account for additional scrutiny.
Acquirers (which VAMP primarily targets) and merchants who exceed Visa’s fraud thresholds are enrolled in the program and must take corrective actions to avoid further penalties, such as implementing additional fraud detection tools (like Sift) or improving transaction security measures. Visa’s fraud monitoring provides various tools to help merchants identify suspicious transactions early, including address verification, CVV checks, and 3D Secure (3DS), a service that adds an extra layer of authentication during the transaction process.
Merchants flagged by VAMP typically face increased fees and penalties, eventually leading to a suspension of their ability to accept Visa payments. To avoid falling under the program, merchants are encouraged to monitor their chargeback ratios carefully and implement preventative measures like using fraud detection solutions such as Sift and Visa’s own Advanced Authorization and Risk Manager.
What Was the Visa Chargeback Program (VDMP)?
The Visa chargeback program was referred to as the Visa Dispute Monitoring Program (VDMP), but has now been replaced with VAMP. The new program combines both fraud monitoring and disputes, effectively putting both Visa fraud detection and the Visa chargeback program into a single easy-to-read metric for merchants.
VAMP offers a set of tools designed to prevent first-party fraud, which is when a user requests a chargeback for services rendered or a product delivered despite receiving what they ordered. By verifying the legitimacy of a transaction, VAMP helps merchants understand when a transaction was authorized, reducing the likelihood of a fraudulent chargeback claim.
Another aspect of Visa’s chargeback process is chargeback alerts, which tells a merchant when a chargeback has been initiated. This gives the merchant time to address the claim and present relevant evidence that can show when a chargeback is fraudulent.
How Does Visa’s Fraud Monitoring Program Help Prevent Fraud?
The Visa fraud monitoring program—also part of VAMP—uses several processes to help prevent fraud for merchants and customers alike.
- Real-time transaction monitoring: Visa continuously monitors all transactions to identify unusual patterns, including looking for signs of card-not-present fraud, unusual spending behaviour, geographical inconsistencies, and rapid transaction volumes.
- Automated fraud detection tools: Visa uses automated fraud detection tools like Visa Advanced Authorization and Visa Risk Manager to analyze transaction data against historical trends. Today, these tools use machine learning algorithms to look for suspicious transaction patterns and provide merchants with alerts for flagged users.
- Thresholds for fraud: Sometimes a merchant becomes too lax with fraud detection, so Visa employs thresholds for merchants that exceed certain thresholds that can result in increased fees and scrutiny from the payment provider. This tells the merchant that corrective action, such as integration of further fraud detection solutions, is necessary to protect themselves and their customers.
- Prevention of unauthorized transactions: Through Visa’s 3DS technology, merchants can prevent unauthorized transactions by requiring extra steps for certain transactions. This includes requesting a one-time password (OTP), which must be entered before the transaction is approved. This helps further guarantee that the customer is the card holder.
- Support for high-risk merchants: Visa provides additional support to high-risk merchants by offering specific fraud prevention tools, programs, and techniques. E-commerce businesses, digital retailers, and subscription-based services are all at increased risk because of their tendency to be “card-not-present” transactions.
- Chargeback management: Visa’s VAMP includes mechanisms to manage and reduce chargeback rates and the impact of chargebacks. Most of this is achieved through early warnings of chargeback initiations, which helps merchants understand why a chargeback happened or give them time to present evidence if the chargeback is fraudulent.
What Can I Do to Keep my VAMP Ratios Low?
Keeping your VAMP ratios low is more important than ever.
With merchant thresholds for fraudulent transactions dropping to just 0.9% and fees for “excessive merchants” sitting between $5 and $10 per fraudulent or disputed charge, using Visa as a payment provider can get quite expensive if you don’t monitor fraud and chargebacks.
Payment protection solutions like Sift are a good first step to stopping fraud in its tracks and halting first-party fraud before it can get a transaction through, and there are other best practices businesses can follow to keep VAMP ratios low.
Monitor Your Ratios
The first step is understanding and monitoring your fraudulent transaction ratios. Any fraudulent or disputed transaction counts against your ratio, and when you’re processing thousands of purchases, this percentage can sneak up on you. For example, if you have 1,000 transactions in a given month, the 0.9% threshold from Visa goes into effect after just 9 disputed or fraudulent charges. Be proactive about solving disputes to avoid chargebacks, always collect evidence to prevent first-party fraud, and use payment protection solutions to identify suspicious users before they can commit fraud.
Implement Strong Fraud Prevention Tools
Visa offers fraud prevention tools, but the best policy is to have a dedicated fraud prevention solution. Platforms like Sift offer expansive databases of user signals and history that their AI-powered solutions use to identify suspicious activity before it occurs. Sift also provides a Clearbox Decisioning approach, which lets you know why a user is flagged so you can let legitimate customers through and adjust your fraud tolerance to your industry needs and VAMP ratios. While payment protection solutions are a good way to avoid the dreaded “excessive merchant” label, Sift actually spurs growth by providing frictionless experiences for legitimate customers while stopping fraudulent transactions and chargeback fraud in its tracks.
Adopt Fraud Detection Strategies
Monitor transactions for patterns such as unusually large purchases, rapid and multiple transactions, or purchases coming from unusual areas. High or large transaction volumes may indicate a fraudster trying to get as much as they can before their unauthorized use of a card is discovered.
Educate Your Staff
As in most cases, education is the best policy. Train your staff to be aware of potential fraud signs and explain how Visa’s VAMP thresholds work and what they mean for the company. Keep them up-to-date on recent fraud trends and how to handle fraud when discovered. Finally, a good customer service staff is crucial: handling customer complaints with grace and understanding is the best way to stop a potential chargeback. Remember, VAMP ratios apply to legitimate chargebacks as well as fraudulent ones.
Visa Fraud Monitoring Program Helps Those Who Help Themselves
Visa’s best interest is to keep their client merchants low-fraud, service-oriented, and honest, and that is a large part of why VAMP was implemented. The best policy to keep VAMP ratios low is to favor transparency when selling and employ top-tier customer service, but having a payment protection solution is just as critical.
Sift is already used globally by some of the largest businesses across industries. Our Global Data Network is cross-industry and “self-learning,” with every new transaction further increasing our ability to identify and flag suspicious users and fraudulent transactions. We trust our customers to know what’s best for their company and in their industry, so we keep our decisioning transparent and adjustable, making your Sift experience fit your specific business needs. Through market-leading AI-powered fraud detection and industry-specific customizability, Sift helps protect your bottom line while providing frictionless experiences for your loyal customers.
The Visa fraud monitoring programs and chargeback process is, in the end, here to help both merchants and customers alike to make commerce a safe, streamlined experience for all. Understanding how these programs work is the first step, but knowing how to address fraud, chargebacks, and unhappy customers is the next. If you’re running a business, make sure you understand these steps, and you’re well on your way to a bright, and lucrative, future.
FAQs
How Visa Fraud Detection Works
Visa fraud detection works with:
Real-Time Transaction Monitoring: Visa monitors transactions in real-time, analyzing them for unusual spending patterns, large transactions, or geographical inconsistencies.
Advanced Fraud Detection Tools: Visa Advanced Authorization (VAA) uses machine learning to assess fraud risk in real time based on transaction history. Visa Risk Manager allows merchants to set custom fraud detection rules.
Fraud Detection Algorithms: Visa uses machine learning to detect suspicious activity by analyzing transaction data for unusual patterns and assigning risk scores.
Cross-Border Transaction Analysis: Transactions from unfamiliar locations or sudden international purchases are flagged for further review.
Visa’s Secure Payment Methods: Tokenization replaces sensitive data with tokens to prevent fraud. 3D Secure 2.0 adds additional authentication steps for online transactions.
Fraud Alerts and Notifications: When a suspicious transaction is detected, Visa issues alerts to issuers and cardholders for review.
Collaboration with Issuers and Merchants: Visa works with banks and merchants to quickly identify and prevent fraud.
How can Sift Help Prevent Visa Chargebacks?
The Visa chargeback monitoring program (part of Visa’s VAMP) helps merchants manage and reduce chargebacks by monitoring their chargeback ratios. If a merchant exceeds Visa’s fraud and dispute thresholds, they are flagged for the program. Merchants must then take corrective actions, such as improving fraud prevention measures and enhancing customer service to reduce chargebacks. If the chargeback ratio remains high, merchants may face penalties or be temporarily suspended from processing Visa payments.
What is the Visa Chargeback Process?
Visa Chargeback rules take effect when a cardholder disputes a transaction with their issuing bank, citing reasons like fraud, billing errors, or non-delivery of goods. The issuing bank investigates the claim, and if valid, reverses the transaction and credits the cardholder.
The merchant’s bank (known as an acquirer) is then notified and informs the merchant, who can either accept the chargeback or dispute it. If the merchant disputes the chargeback, they provide evidence to the issuing bank, which reviews it and makes a final decision. If the chargeback is upheld, the funds remain with the cardholder, and the merchant may face fees or penalties. Merchants with high chargeback ratios may be placed in Visa’s VAMP, potentially resulting in higher fees or loss of processing privileges.
What is the Visa Dispute Time Frame?
The Visa Dispute Time Frame refers to the specific period within which a cardholder or merchant must initiate or respond to a chargeback or dispute. Missing deadlines can result in losing the ability to resolve the issue.
For cardholders:
The cardholder typically has 120 days from the transaction date to initiate a dispute with their issuing bank. This period may vary based on the type of dispute.
For merchants:
Merchants are usually given 20 to 30 days to respond to a chargeback and provide evidence to dispute it. Typically, the faster a merchant can respond to a disputed transaction, the better, as it usually results in lower fees. The exact time frame depends on the acquirer’s requirements and the specific chargeback reason. If the merchant fails to respond within this time, the chargeback is upheld, and the funds are returned to the cardholder.
What is the New Fraud Program For Visa?
Visa’s fraud monitoring program (VAMP or Visa Acquirer Monitoring Program) is designed to help merchants simplify the calculation of acquirer and merchant fraud rates by monitoring chargebacks and fraud activity. This program targets merchants who have high levels of chargebacks, potentially indicating issues with fraud or other transaction disputes. The main goal of VAMP is to reduce fraud, chargebacks, and related penalties by providing merchants with tools to manage and prevent fraudulent activity.
To learn more about VAMP, read Sift’s article about VAMP and what merchants and acquirers should be aware of as VAMP policies go into effect during 2025.
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