Changes In The Visa Europe Regulations 1 July 2016
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Introduction to Change In The Visa Europe Regulations

Fraud and chargebacks come with running online businesses and it causes a problem for many merchants. From 1 July 2016 there will be some changes in the Visa Europe regulations regarding fraud and chargeback monitoring programs. See what are the updates.

Visa Fraud Monitoring Program (VFMP)

Visa Fraud Monitoring Program (VFMP) comes with two qualifications: for standard and high-risk businesses.

It monitors only transactions other than domestic, so it is about situations when card issuer country is not the same as merchant’s country. There are the exceptions to this rule for UK and Germany, where both domestic and international transactions are monitored.

Note:

Merchants that reduce excessive chargebacks for 3 consecutive months, will exit the Visa Fraud Monitoring Program.

1. Standard Program

Regular merchants will be identified under the Visa Fraud Monitoring Standard Program when they meet or exceed both of the monthly thresholds program mentioned below:

  • USD 75,000 or local currency equivalent, fraud amount;
  • 1% fraud-to-sales ratio

Visa Fraud Monitoring Program Standard Timeline

Visa Fraud Monitoring Program Standard Timeline

2. Hi-Risk Program

Visa Fraud Monitoring High-Risk Program focus on merchants categorized as high-risk and:

  • Merchants who are not categorized as high-risk, but meet or exceed monthly thresholds, which are: USD 250,000, or local currency equivalent, fraud amount or 2% ratio of fraud dollars to sales dollars;
  • Merchant’s activities caused undue harm to the Visa Systems’ reputation.

Timeline For High-Risk Merchants

Timeline For High-Risk Merchants

Note:

When merchant tries to change or modify its name or data to overcome the Visa Fraud Monitoring Program, Visa Europe may permanently disqualify the merchant from participating in the Visa Enterprise. It comes also with fine of € 8,750 per month.

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Visa Chargeback Monitoring Program (VCMP)

1. Standard Program

Regular merchant will be included by the Visa Chargeback Monitoring Standard Program, when it meets or exceeds both of the following monthly program thresholds:

  • 100 chargebacks;
  • 1% chargebacks-to-sales ratio

Standard Program Timeline

Standard Chargeback Program Timeline

2. Hi-Risk Program

Merchants categorized as high-risk businesses will be under the Visa Chargeback Monitoring High Risk Program (which is obvious), but also when:

  • Regular merchants meet or exceed monthly program thresholds, which are 500 chargebacks, and 2% chargeback-to-sales ratio;
  • Merchant activities cause the harm to the reputation of Visa Systems.

High-Risk Timeline

High-Risk Timeline

This program also assumes that if merchant change or modify its name or data to circumvent the Visa Chargeback Monitoring Program, it may be permanently disqualified from participating in the Visa Enterprise. It may also happen when merchant continues to meet or exceed the monthly chargeback thresholds without an effective reduction plan.

Note:

If an acquirer submits transactions for a single merchant using multiple names or merchant accounts, Visa Europe may group the merchant activity performed under the multiple names.

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Lucas Dominic

Lucas Dominic

Lucas is a CEO at SecurionPay. FinTech Innovator, Payment Expert, API Fan, Startup Enthusiast & World Traveler.
Lucas Dominic

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