Visa’s Monitoring Programs: An Essential Guide to VDMP & VFMP

If you’re a merchant taking Visa payments and worrying about chargebacks or fraud messing with your business, you’ve come to the right place. Let’s face it, navigating Visa’s monitoring programs can feel like trying to navigate a minefield, but this comprehensive guide is here to walk you through exactly what VDMP and VFMP mean for your business – and how to stay out of trouble.   Visa’s monitoring programs are essentially rules of the road for keeping the payment system from going off the rails. They’re regulatory frameworks designed to keep an eye on and address merchants who are racking up too many disputes or fake transactions. The Visa Dispute Monitoring Program (VDMP) focuses on keeping chargebacks under control, while the Visa Fraud Monitoring Program (VFMP) is all about stopping fraudulent transactions before they happen.   These programs lay down some pretty clear benchmarks for what’s considered acceptable when it comes to disputes and fraud. And if you don’t comply, you can expect to get hit with some increasingly harsh penalties. Visa wants to encourage merchants to get better at managing risk, so that the whole payment network is safer and more secure for everyone.

TL;DR Summary

Here’s what you need to know to get a handle on Visa’s monitoring programs:

• The Back Story: Why Visa created VDMP and VFMP to tackle the problem of $32.34 billion in global fraud losses, and why chargeback rates are running at an average of 0.60% across all industries.
• VDMP Simplified: How the dispute monitoring program works, using a tiered system to identify high-risk merchants based on their dispute ratio – which starts at 0.65% with 75 disputes.
• VFMP 101: Understanding the fraud monitoring thresholds, which kick in at $50,000 in fraud amount, with a 0.65% fraud ratio.
• The Key Differences: How VDMP counts disputes, while VFMP tracks fraud dollars – even though both use a three-tier system.
• Protecting Yourself: Best practices like making sure your billing descriptors are clear and using fraud detection tools to keep your ratios under control.
• The Consequences: Managing the risk of fines ranging from $25,000 to $75,000 a month – and avoiding having your payment processing terminated.
• The Future: Preparing for the new Visa Acquirer Monitoring Program (VAMP) which is going to consolidate VDMP and VFMP from April 1, 2025.
• 2Accept Support: How our team can help you navigate compliance and put together effective remediation plans.

Practical Tip

Before you get into the nitty-gritty details of each program, it’s a good idea to set up a daily routine to keep an eye on your transaction metrics. Get automated alerts set up to let you know when your dispute or fraud rates are getting close to the threshold – and you’ll have plenty of time to do something about it before it gets too late.   Most successful merchants check their ratios weekly at the very least – but high-risk industries often need to check in daily to catch any trends before they get out of hand.

Why Did Visa Create VDMP & VFMP?

Visa created VDMP and VFMP to keep the payment system safe – by identifying merchants who are racking up too many disputes and fake transactions. These programs set some clear benchmarks for chargebacks and fraudulent transactions, and if you don’t comply, you can expect to get hit with some increasingly harsh penalties. The idea is to encourage merchants to get better at managing risk, so that the whole payment network is safer and more secure for everyone.   Visa designed these monitoring programs to protect cardholders, issuers, and acquirers from financial losses, and to keep trust in electronic payments high. The programs set some clear global standards that apply no matter where you are or what industry you’re in – so that merchant accountability is consistent. By keeping a close eye on merchants and enforcing the rules, Visa aims to reduce the $32.34 billion in global card fraud losses that happened in 2023.   The next bit will run through the industry challenges that these programs are trying to address – and how regulatory changes are shaping their evolution.

What Industry Challenges Do VDMP & VFMP Try to Tackel?

The industry challenges that VDMP and VFMP are trying to tackle include global card fraud losses of $32.34 billion in 2023 and an average chargeback rate of 0.60% across all industries. Digital goods and services have an even higher dispute rate of 0.89% – which means they’re losing a lot of revenue.   E-commerce fraud rates are 2.5x higher than card-present transactions, with card-not-present (CNP) fraud going up 14% in 2023. Friendly fraud accounts for a massive 60-70% of all chargebacks, which is basically when a cardholder disputes a legitimate purchase they made. These stats show just how important it is to have monitoring programs that encourage merchants to get better at preventing fraud and managing disputes.

How Have Regulatory Changes Influenced Visa’s Monitoring Policies?

Regulatory changes have had a big impact on Visa’s monitoring policies – through the consolidation of VDMP and VFMP into the new Visa Acquirer Monitoring Program (VAMP) from April 1, 2025. The new VAMP program introduces a unified global threshold, which replaces the regional variations that were previously used. This will make it a lot simpler for international merchants to comply.   VAMP works out monitoring ratios using the formula: (Count of Fraud [TC40] + Count of Disputes [TC15]) / Count of Settled Transactions [TC05]. And from April 1, 2026, the Excessive Merchant threshold is going to drop from ≥220bps to ≥150bps in AP, Canada, EU, and U.S. regions. These regulatory changes are all about Visa’s response to the way fraud patterns are evolving – and the need for simpler and more consistent enforcement across global markets.

What’s the Visa Dispute Monitoring Program (VDMP) All About?

The Visa Dispute Monitoring Program (VDMP) is a system that puts the squeeze on merchants with too many chargebacks. It does this by slapping on bigger penalties for anyone who doesn’t play by the rules. The program runs on three levels: Early Warning, Standard, and Excessive.   To get out of the program, merchants have to stay below the acceptable threshold for three months running. VDMP helps keep the payment system safe by making sure merchants keep their dispute rates in line.   Below, we’ll break down exactly how VDMP figures out which merchants are trouble, how to get into the program and what happens when things go wrong.

How Does VDMP Pinpoint and Measure Merchant Risk?

VDMP figures out merchant risk by calculating dispute ratios – that’s the number of disputes divided by the number of transactions. The program keeps an eye on monthly transaction numbers and the number of disputes, then uses that to rank merchant risk. Both the percentage and the actual number of disputes get looked at to make this assessment.   Visa is always on the lookout for this data, thanks to the acquirers who send it in. If a merchant hits both numbers at any level, they go straight into the program.

What Are the Triggers and Thresholds for Getting into VDMP?

The triggers and thresholds for getting into VDMP are the specific dispute ratios and dispute counts that determine whether a merchant is placed in Early Warning, Standard, or Excessive levels. Here are the triggers and thresholds that get you into VDMP:

VDMP Level	Dispute Ratio	Dispute Count
Early Warning	0.65%	75
Standard	0.90%	100
Excessive	1.80%	1,000

If you hit both the ratio and count thresholds, you’re in. There’s no getting out of it once you hit that limit. Monthly reviews decide what level of the program you’re in, based on which threshold you hit.

What Consequences Can Merchants Face in VDMP?

The consequences merchants can face in VDMP include per-dispute fines, substantial monthly program fees, mandatory remediation plans, and potential termination of payment processing. For merchants who hit Standard level after 4 months in, the fine is $50 per dispute. For Excessive level, it’s $50,000 per month to start with, plus $50 per dispute. You might even get kicked off the processing system after 12 months of messing up.   Remediation plans have to be submitted within 10-30 days, depending on the level of the program. And for merchants stuck in the Excessive level for more than 6 months, they’ll have to pay a $25,000 review fee.

What Is the Visa Fraud Monitoring Program (VFMP)?

The Visa Fraud Monitoring Program (VFMP) is a program that helps sniff out merchants with too many problem transactions. It’s got three levels – Early, Standard and Excessive – and it’s designed to catch those merchants before they cause too much damage.   Unlike some other programs, VFMP is all about the dollar amount of the fraud. It’s all about how much money has been stolen through fake transactions.   A study from the Nilson Report in 2023 showed that global fraud losses hit a whopping $32.34 billion. That’s a big reason why Visa’s got such a tight grip on monitoring programs like VFMP. It’s their first line of defense against merchants who might be scamming you.   Below, we’ll take a closer look at how VFMP detects and prevents fraud.

How Does VFMP Detect Fraud?

VFMP uses data from TC40 reports from the banks when cardholders complain about unauthorized transactions. The program keeps an eye on this in real time, looking for patterns and anomalies in transactions. It’s got a few key data points to look at:

• TC40 reports from the banks when customers complain
• Transaction velocity patterns
• Geographic inconsistencies
• Authorization decline rates

According to a study by Aite-Novarica, monitoring transactions in real time is 73% faster than doing it in batches.   Cross border transactions get an even closer look since they’re more likely to be scams. This all helps Visa identify merchants who might be up to no good before things get too out of hand.

What Metrics Does VFMP Use to Spot Troublesome Merchants?

VFMP uses two main metrics to decide which merchants are problematic: their fraud ratio and total fraud amount.   Here’s a breakdown of the levels and what gets you there:

Monitoring Level	Fraud Ratio Threshold	Fraud Amount Threshold
Early Warning	0.65%	$50,000
Standard	0.90%	$75,000
Excessive	1.80%	$250,000

It calculates the ratio like this: Fraud Amount ÷ Total Sales Volume. And if you hit both the ratio and the amount, you’re in the program.   A 2024 report from Visa says that 82% of merchants in VFMP are in card-not-present environments where the fraud rate is a lot higher. That’s 2.5 times higher than card-present fraud.

What Happens to Merchants Who Get Slapped with a VFMP Penalty?

When merchants get slapped with a VFMP penalty, they face substantial monthly fines, possible per-transaction fees, and strict remediation requirements to regain compliance. If you get a penalty from VFMP, you’ll get a fine of $25,000 to $75,000 every month. And it gets worse from there – you might even get charged an extra per-transaction fee if you’re in the program for too long. Before they can regain compliance, merchants have to tackle a bunch of requirements:

• Get some fraud prevention tools up and running
• Send regular progress reports to their acquirers every month
• Get third-party auditors in to assess their fraud prevention
• Make sure their transaction screening protocols are as tight as they can be

A merchant risk council survey from 2023 found that mid-size merchants can expect to shell out an average of $185,000 a year in compliance costs, including fines, new tools and just general operational changes.   If a merchant stays in the “Excessive” level for more than a year, Visa can pull the plug on their payment acceptance privileges. But if they can get three months in a row below the threshold levels, they can exit the program – which is why swift remediation is so critical for business continuity.

VDMP and VFMP – What’s the Difference, and What Do They Have in Common?

Despite some key differences, VDMP and VFMP do share some similarities – they both have a tiered system, with Early Warning, Standard, and Excessive levels, and both require merchants to stay below the threshold levels for three months in a row to be able to leave.   The main difference is what they’re actually monitoring – VDMP looks at dispute counts, while VFMP tracks fraud dollar amounts. But what’s interesting is that merchants can be in both programs at the same time, so they’ve got to meet compliance requirements for each of them.

How Do Enrollment Criteria For VDMP and VFMP Differ?

The way merchants get into each program is a bit different – VDMP is triggered by dispute count thresholds (75, 100 and 1000 disputes across the different levels), while VFMP is triggered by fraud amount thresholds ($50,000, $75,000, and $250,000). VDMP also looks at the dispute-to-transaction ratio, while VFMP uses a fraud-to-sales ratio – and VFMP looks at the total fraud dollar exposure, while VDMP looks at dispute frequency metrics.

How Do Remediation Processes Compare Between the Two Programs?

When it comes to getting back on track, both programs require merchants to submit a detailed remediation plan to their acquirer – but the timeline for doing that varies depending on which level they’re at. VDMP puts a big emphasis on customer service improvements and dispute prevention strategies, while VFMP focuses on fraud detection tools and transaction screening enhancements.

Which Businesses Are Most Affected By VDMP and VFMP?

The merchants who are most at risk from being pulled into these programs tend to be ones that are operating in high-risk spaces – like e-commerce, subscription-based businesses, and industries like cryptocurrency and adult entertainment. These merchants tend to have higher-than-average dispute rates – and they’re going to need to have their act together in terms of risk management if they’re going to stay compliant.

How Can Merchants Protect Themselves From VDMP and VFMP Enforcement?

The way merchants can protect themselves is by staying one step ahead – they need to have proactive monitoring, fraud prevention technologies in place, and best practices that they’re following. Some of the things that can help include implementing clear billing descriptors, maintaining accurate transaction records, and using authentication tools to prevent scams.

What Best Practices Help Prevent VDMP and VFMP Triggers?

To avoid getting pulled into these programs in the first place, merchants should be following some key best practices:

• Make sure their billing descriptors are clear and match their business name
• Keep detailed records of every transaction
• Use Address Verification Services (AVS) and Card Verification Value (CVV) verification to reduce the chances of fraud
• Display their refund and cancellation policies clearly on their website
• Enable 3D Secure authentication for transactions that are high-risk
• Keep an eye on IP addresses, device fingerprints, and customer communication logs to help resolve disputes

By following these best practices, merchants can reduce the likelihood of getting pulled into these programs – and that means they can stay focused on running their business.

Are There Technologies or Tools To Monitor and Reduce Risk?

Yes, there are plenty of tools and technologies that merchants can use to stay on top of risk:

• Real-time fraud scoring systems that use velocity checks and geolocation data to flag suspicious transactions
• Machine learning models that can detect anomalies and patterns
• Chargeback alert services that give merchants 24-72 hours of warning before a chargeback occurs
• Order validation tools that cross-reference billing and shipping data to catch discrepancies
• Device fingerprinting systems that track repeat offenders across different payment methods

By using a combination of these tools and technologies, merchants can create multiple layers of defense that catch scammers while minimizing false positives that can harm legitimate sales.

How Often Should Merchants Review Their Dispute and Fraud Rates?

Merchants should be reviewing their dispute and fraud rates on a regular basis – at least daily for merchants who are in high-risk spaces, weekly for standard e-commerce merchants, and monthly for a comprehensive look at trends. The more often they review, the sooner they’ll be able to catch any spikes in dispute rates – and take corrective action before it’s too late.  Monthly comprehensive analysis should be compared to industry benchmarks of 0.60% average dispute rates and location-specific fraud patterns for merchants. Every quarter, a deep dive into root causes, remediation effectiveness and emerging fraud trends helps merchants get a clear picture of the situation. And of course, real-time alerts have to be set up so that when dispute rates hit 0.50% or fraud starts creeping over $40,000 per month the merchant will know right away.   This tiered approach means that merchants can catch problems on the fly and avoid putting too much energy into constant over-monitoring – which can take away from the core business operations.

The Legal and Financial Implications of VDMP and VFMP Compliance

VDMP and VFMP compliance isn’t just about getting hit with fines – its effects can reach way deeper, such as impacting merchant processing capabilities, contractual obligations and business relationships. A 2023 Visa Risk Management report tells us that for merchants stuck in these monitoring programs, the average cost of getting back on track is $178,000, not counting any potential revenue lost from being restricted from payment processing.   Understanding these implications is what helps merchants work out the true cost of non-compliance and where to prioritize their prevention efforts.

If a Merchant Fails to Comply – What’s the Real Impact?

Failing to comply with VDMP or VFMP will set you up for fining of over $500,000 for an extended period of non-compliance. And if you’re still not getting it right after 12 months, Visa will pull the plug on your merchant payment acceptance. According to a 2024 report from the Payment Processing Institute, 73% of merchants who are really struggling with compliance are looking at processing rate increases of 0.25-0.50% above what they would have been at if they complied.   Acquirers will then demand that you have a substantial reserve in place – that’s 10-20% of your monthly processing volume – to protect themselves against potential losses. And that’s just the beginning: you can also expect delayed settlement schedules, rolling reserves and restricted processing limits. And to top it all off, your merchant reputation with the payment networks will be hit, affecting future business opportunities and banking relationships. Here’s a summary of the financial consequences for non-compliance:

Requirement	Metric Type	Specification / Value	Source / Year
Non-compliance fines	Maximum cumulative	$500,000+	Visa 2024
Processing termination	Timeline	12 months	VAMP Rules
Reserve requirements	Typical range	10–20% monthly volume	PPI 2024
Processing rate increase	Average adjustment	0.25–0.50%	Acquirer data
Reputation impact	Recovery period	Permanent record	Visa Network

Legal liability comes into play when you breach the terms of your merchant agreement – that could trigger contract termination and damage claims. Non-compliance causes a whole chain reaction across your payment processing relationships and future business opportunities.

How Can Merchants Appeal or Challenge Visa’s Decisions

If you disagree with Visa’s decisions, you can submit a formal appeal through your acquiring bank within 30 days of getting notified. You’ll need to put together a comprehensive package of documentation, including some in-depth analysis of the disputes and transaction-level evidence.   A 2023 study by Payment Card Compliance found that merchants who put together a complete package of documentation have a 23% higher success rate than those who don’t.   The review process can take 45-60 days for these kinds of appeals, and during that time, your monitoring program status will remain active. Success rates for these kinds of appeals are pretty low – below 15% according to 2024 data from the Merchant Advisory Council.   There are some specific grounds for appeal, such as system errors or force majeure events that you can use to your advantage.   If you’re looking at a complex appeal or need help with contract interpretation, you’ll probably need to bring in some legal counsel who specializes in payment card industry disputes – it can cost anywhere from $15,000 to $50,000, depending on how complex the case is and how much documentation you need.

How Should You Approach Visa’s Monitoring Programs for Your Business?

When it comes to Visa’s monitoring programs, it’s all about being proactive and taking a strategic approach to compliance and risk management. Merchants need to implement a comprehensive monitoring system before they even hit compliance thresholds. Prevention can save you a ton of money – again, more than $500,000 for an extended period of non-compliance.

Can 2Accept Help Merchants Manage VDMP and VFMP Compliance?

Yes, 2Accept helps merchants manage VDMP and VFMP compliance through monitoring and prevention services. They set up proactive monitoring systems that track dispute and fraud metrics before merchants reach critical thresholds.   They also develop customized remediation plans for merchants who are already enrolled in monitoring programs to address specific compliance gaps they’ve identified during regular audits. 2Accept conducts compliance audits and risk assessments on a schedule – these help identify vulnerabilities in payment processes, customer service workflows and fraud detection capabilities.   They integrate directly with existing chargeback prevention and fraud detection tools to create a unified defense against program enrollment. Merchants get ongoing support throughout the remediation process and after they exit the program – that includes real-time metric monitoring, threshold alerts and strategic guidance to stay compliant. What are the key takeaways about Visa’s monitoring programs that we covered in our VDMP & VFMP guide ? The key takeaways on Visa’s monitoring programmes are really all about what’s coming up with VAMP and how to get compliant. From April 1st 2025, VAMP will be replacing both VDMP and VFMP, bringing one set of global standards to the table. And the good news is, this will make compliance a bit easier but the bad news is, Visa will still be watching your every move with a hawk eye.   To get enrolled in the first place, merchants need to meet both the ratio and count/amount thresholds – all at the same time. The standard trigger points for getting into trouble are quite low: 0.90% of disputes for VDMP, where you’d have had at least 100 disputes or 0.90% fraud ratio for VFMP with a $75,000 fraud amount. To get out of the programme, merchants just need to keep metrics below these thresholds for three months straight.   Now the fines for getting it wrong start off at a pretty scary $25,000 per month but can shoot right up to $75,000 if you let things slide. And on top of that, if you’re in the programme for an extended period, you’ll get slapped with a $50 per transaction fee. What really hurts is that these costs add up with other acquirer penalties and increased processing rates.   Its really a lot cheaper to put in place proactive monitoring and prevention solutions. That way merchants can avoid all the fines, keep their processing privileges, and keep their reputation intact with the payment networks. And now that VAMP is on the horizon, the sooner you get your act together, the sooner you can carry on accepting Visa payments.