Card Monitoring Programs

Card Networks monitoring programs

As part of your financial obligations to the card networks, you must ensure that disputes (chargebacks) and fraud are kept at acceptable levels. If these exceed the thresholds dictated by each network (e.g. Visa or Mastercard), you’re placed into one of their monitoring programs. As part of a program, you can incur monthly fines and additional fees until you reduce your dispute or fraud levels.

Circle can work with you on a remediation plan to reduce the levels of disputes or fraud related to your account. We also communicate directly with the networks and relay information on a monthly basis. Download our remediation template to get started.

Failure to comply with the requirements of a program within the specified time period (what the networks call a timeline) can result in the network refusing to process further payments using their cards.

Visa monitoring programs

The Visa Fraud Monitoring Program (VFMP) and Visa Dispute Monitoring Program (VDMP) apply to users in all of our supported countries. The timelines used by either program depend on which threshold—Standard or Excessive—has been exceeded.

Each timeline spans a 12-month period and determines what actions to take on a monthly basis. At the beginning of each month Visa reviews your previous month’s activity to see if it has exceeded any of their established thresholds. If so, we’ll reach out and discuss this with you.

Early warning notifications
Visa operates an early warning system that warns users—through Circle—who are at risk of being placed into a monitoring program. Users who meet the early warning threshold aren’t immediately placed into the program. Instead, they’re given the opportunity to reduce the level of fraud on their account to avoid placement.

Early warning notifications may not occur if your account immediately matches or exceeds the Standard or Excessive thresholds of either program.

Remediation
Visa removes you from their programs when your level of disputes or fraud drops below the Standard threshold for three consecutive months. The following three months are considered a “tracking” period. If you exceed any of the thresholds in this period, you’re immediately placed back into the program and the original timeline resumes—a new timeline doesn’t start. Additionally, if you exceed the Excessive threshold, you’re removed from the program only when your fraud or dispute levels fall below the Standard threshold.

As part of the remediation process, you may be required to provide Circle with details on the steps you’re taking and your timeline for implementation.

VDMP: Visa Dispute Monitoring Program

VDMP applies to users with an unusually high level of disputed payments on their account. Users are placed into this program if they meet or exceed the thresholds for the following criteria:

  • The total number of payments that have been disputed (dispute count)
  • The ratio of disputed payments to all payments (dispute rate)

Level

Dispute Count

Dispute Rate

Fines

Early Warning

75

0.65%

None. You have the opportunity to take action that reduces your dispute level before it exceeds a threshold where fines are incurred.

Standard

100

0.9%

Fines begin after four months and continue on a monthly basis until removal from the program.

Excessive

1,000

1.8%

Fines begin immediately and continue until removal from the program.

VFMP: Visa Fraud Monitoring Program

VFMP applies to users with an excessive level of fraud on their account, which is calculated using both fraudulent chargebacks and TC40 data. You’re placed into this program if you exceed the thresholds for the following criteria:

  • The total volume in U.S. dollars of Visa payments that are fraudulent (Fraud Volume)
  • The ratio of the volume in fraudulent Visa payments to all payments (Fraud Rate)

Level

Fraud Volume

Fraud Rate

Fines

Early Warning

$50,000

0.65%

None. You can take action that reduces your fraud level before it incurs penalties.

Standard

$75,000

0.9%

None. You can take action that reduces your fraud level before it incurs penalties.

Excessive

$250,000

1.8%

Fines begin immediately and continue on a monthly basis until removal from program.

Mastercard monitoring programs

Mastercard’s Excessive Chargeback Program (ECP) consists of two levels: Excessive Chargeback Merchant (ECM) and High Excessive Chargeback Merchant (HECM), and it applies to users in all supported countries. The Excessive Fraud Merchant (EFM) Compliance Program is a separate program that applies to users in all supported countries besides Germany, India, and Switzerland.

If your account exceeds program thresholds, Mastercard places you into this program and Circle notifies you. If you exceed both EFM and ECP thresholds, you’re placed in EFM but not ECP. For example, you exceed EFM and ECP thresholds in March and April but only exceed ECP thresholds in May. In April, you’d be placed in month 2 of EFM and fined accordingly. In May, you’d be placed in month 3 of ECP despite the EFM identifications taking precedent in prior months.

If your account exceeds program thresholds, Mastercard places you into this program and Circle notifies you.

Remediation
You exit ECM as soon as your level of disputes drops below the ECM threshold for 3 consecutive months. If you’re in HECM and your dispute level drops but still exceeds ECM thresholds (between 1.5-2.99%), you move to that program.

As part of the remediation process, you must provide Circle with details on the steps you’re taking to prevent disputes and your timeline for implementation.

Mastercard Excessive Chargeback Program (ECP)

Users are placed into ECP if they meet or exceed the thresholds for the following criteria:

  • The total number of Mastercard payments that have been disputed (chargeback count)
  • The chargeback-to-transaction ratio (chargeback rate)

The chargeback rate is a ratio of disputed payments to all payments. It’s calculated as the number of Mastercard disputes received in a calendar month compared to the total number of Mastercard payments from the preceding month. You must exceed both thresholds to qualify for ECM.

Mastercard Excessive Chargeback Merchant (ECM)

Dispute Count

Chargeback Rate

Fines

100-299

1.5–2.99%

Fines begin in month two and continue at increasing rates in subsequent months. See the timeline below for details.

Mastercard High Excessive Chargeback Merchant (HECM)

Dispute Count

Chargeback Rate

Fines

300+

3%

Fines begin in month two and continue at increasing rates in subsequent months. See the timeline below for details.

Mastercard Excessive Fraud Merchant Compliance Program (EFM)

You’re placed into the EFM program if you meet or exceed the thresholds for the following criteria:

  • Number of e-commerce Mastercard payments
  • The total volume in U.S. dollars of Mastercard payments that result in fraudulent chargebacks (net fraud volume) calculated by dispute reason code (reason code 4837 and 4863)
  • The fraud-count-to-transaction ratio (fraud chargeback rate)
  • The ratio of 3DS Mastercard payments to all Mastercard payments

The fraud chargeback rate uses a similar calculation to the chargeback rate found in ECM or HECM. The only difference is that the fraud chargeback rate is calculated using only fraudulent chargebacks.

EFM applies to users who meet all of the following conditions:

  • Minimum of 1,000 e-commerce Mastercard payments
  • Net fraud volume is greater than 50,000 USD
  • Fraud chargeback rate is greater than 0.50%

Circle monitoring programs

Circle also has separate independent monitoring programs from those of the card networks. The Circle Chargeback Monitoring Program (CCMP) and Circle Fraud Monitoring Program (CFMP) apply to all Circle users.

Circle Chargeback Monitoring Program (CCMP)

CCMP applies to users with an unusually high level of disputed payments on their account. Users are placed into this program if they meet or exceed the thresholds for the following criteria:

  • The total number of payments that have been disputed (dispute count)
  • The ratio of disputed payments to all payments (dispute rate)

Chargeback Count

Chargeback Rate

50

0.6%

Circle Fraud Monitoring Program (CFMP)

CFMP applies to users with an excessive level of fraud on their account, which is calculated using both fraudulent chargebacks and TC40 / SAFE data. You’re placed into this program if you exceed the thresholds for the following criteria:

  • The total volume in U.S. dollars of payments that are fraudulent (Fraud Volume)
  • The ratio of the volume in fraudulent payments to all payments (Fraud Rate)

Fraud Volume

Fraud Rate

$50,000

0.6%


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