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Visa Dispute Monitoring Program

Like merchants and acquirers, card brands suffer consequences from chargebacks. Card brands also have the authority to try to force merchants to try to limit those consequences. Visa has a multi-tiered program to incentivize merchants and acquirers to reduce chargebacks by punishing those who allow their chargeback ratios and volumes to exceed predetermined limits. This program is called the Visa Dispute Monitoring Program (VDMP) and can be burdensome for merchants who are enrolled in it. Merchants would be well served to understand the VDMP in order to avoid it, if possible, or navigate it, when it is unavoidable.

What Is the Visa Dispute Monitoring Program?

The VDMP is a three-tiered program that Visa uses to encourage merchants who are exceeding allowable chargeback ratios to make changes to reduce the amount of chargebacks they receive. Visa imposes additional fees and requirements on both the merchants and their acquirers. It is essentially a yearlong program with escalating requirements as the year progresses. Merchants can exit the program at any point in the year if they reduce their chargebacks according to Visa’s standards. 

The tiers in the VDMP are similar to those in the related but distinct Visa Fraud Monitoring Program (VFMP). Those tiers are VDMP Early Warning, VDMP Standard, and VDMP Excessive.

How Does a Merchant Get Put Into the Visa Dispute Monitoring Program?

The main criteria for each tier of the VDMP are total chargebacks in a month and chargeback ratio. Chargeback ratio is calculated by dividing the number of Visa chargebacks filed in a given month by the total number of Visa transactions processed in that same month. Visa only counts the first ten chargebacks filed by any particular cardholder in a given month when calculating chargeback rate.

Merchants are placed in VDMP Early Warning if their chargeback ratio exceeds 0.65% and they receive 75 total disputes in a month. Merchants are placed in VDMP Standard if their chargeback ratio exceeds 0.9% and total disputes exceed 100. Merchants are placed in VDMP Excessive if their chargeback ratio exceeds 1.8% and the total number of disputes exceeds 1,000. Some merchants with high risk merchant category codes (MCCs) may be automatically placed in the VDMP Excessive tier if they merely exceed the VDMP Standard thresholds.

What Are the Consequences of Being In the Visa Dispute Monitoring Program?

The consequences for being placed in the VDMP vary depending on the tier. For example, Early Warning VDMP does not actually carry any consequences. As the name implies, it is merely a warning to the merchant that they are approaching the VDMP thresholds.

Merchants placed in the VDMP are also given something of a grace period as no fees are charged for the first four months of the program. After that grace period, merchants are charged a fee of $50 for each disputed charge. At month two, the merchant and its acquirer will be required to submit a remediation plan that outlines how they expect to reduce their chargebacks below acceptable thresholds. If the merchant remains in this tier of the VDMP for nine months, they may be charged a $25,000 review fee and may be required to undergo an audit. If the merchant has not managed to exit the VDMP after a full year, Visa may revoke the merchant’s authorization to accept Visa payments.

VDMP Excessive merchants face the same basic fee structure as VDMP Standard merchants except they do not receive the initial four-month grace period.

How Does a Merchant Exit the Visa Dispute Monitoring Program?

Merchants in VDMP Standard or VDMP Excessive can exit the program only if they manage to stay below the VDMP Standard thresholds for three consecutive months. If the merchant stays below the thresholds for one or two months but then exceeds them again in the following month, the three-month counter resets. Merchants in the Early Warning tier are not facing any concrete consequences, so they do not necessarily need to stay below the thresholds. But they would be well served to monitor their chargebacks and consider changes.


Exiting the VDMP requires merchants to reduce their chargebacks. Perhaps more importantly, avoiding the VDMP entirely requires merchants to prevent Visa chargebacks as much as possible. Fortunately, Visa provides numerous chargeback prevention tools. These include Verifi chargeback alerts, Verifi Rapid Dispute Resolution (RDR), Verifi Order Insight, and 3-D Secure.

Implementing these tools can sometimes involve complex technical integrations. Maximizing the tools can be facilitated through a technological partner offering expertise and chargeback analytics dashboards. MidMetrics is well-suited to assist merchants of all varieties reduce their chargebacks, prevent chargebacks, and generally avoid the most deleterious consequences of the VDMP.

Chargeback Prevention

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