In today’s digital economy, businesses increasingly rely on card-based transactions to drive revenue, but with that growth comes a rising threat of fraud. To maintain integrity and security across the payments ecosystem, Visa has implemented the Visa Acquirer Monitoring Program (VAMP).
This program introduces a structured approach to monitoring acquirers and merchants for fraud and dispute activity. For merchants, understanding the mechanisms behind VAMP is essential not only to avoid penalties but also to foster sustainable business operations.
Purpose and Origins of the Visa Acquirer Monitoring Program
Visa introduced VAMP in response to escalating instances of fraud, especially in eCommerce and card-not-present transactions. The goal is to identify high-risk merchants and acquirers early and encourage them to adopt better fraud prevention strategies. By monitoring fraud trends and dispute ratios, Visa aims to reduce financial risk, protect cardholders, and ensure that participants in the payment ecosystem uphold specific security and integrity standards.
The program enforces accountability among acquiring banks and their merchant clients. If a merchant’s activity surpasses the acceptable fraud and dispute thresholds, the acquirer may be subjected to additional monitoring requirements or even fines. For merchants, this could result in increased scrutiny, higher operational costs, and in severe cases, termination of processing privileges.
Understanding the VAMP Ratio
Central to the Visa Acquirer Monitoring Program is the VAMP ratio, a metric used to assess the relative risk of a merchant based on fraud and non-fraud disputes. This ratio is calculated by taking the number of fraudulent and non-fraudulent disputes and dividing it by the total number of settled transactions within a specific time frame. This figure provides a comprehensive snapshot of a merchant’s risk profile.
Fraudulent disputes often stem from unauthorized transactions reported by cardholders, while non-fraud disputes can arise from customer service issues, fulfillment problems, or billing errors. What makes this ratio particularly impactful is that it does not allow for double counting. If a transaction initially flagged in an early fraud warning later results in a chargeback, it will only count once in the VAMP calculation.
How TC40 Reports Factor Into VAMP
An important component of the VAMP ratio is data derived from TC40 reports. These reports are generated by Visa based on information submitted by issuing banks when cardholders report unauthorized transactions. TC40 reports serve as an early indicator of fraud, helping acquirers and merchants address issues before they escalate.
Included in these reports are details of specific transactions flagged as fraudulent. Additionally, they often contain early fraud warnings (EFWs), which notify acquirers and merchants about potentially fraudulent activity before a chargeback is filed. These EFWs are critical for proactive fraud mitigation, allowing businesses to investigate and take corrective action immediately.
Transactions identified in EFWs are incorporated into the fraud portion of the VAMP ratio. Since they indicate suspicion of fraud from the card issuer’s perspective, they are considered legitimate risk factors even if they don’t lead to disputes. Therefore, it’s imperative for merchants to monitor these alerts closely and respond accordingly.
Why Transactions Are Only Counted Once
A common concern among merchants is the possibility of a transaction being counted multiple times against them in the VAMP ratio. However, Visa’s policy ensures that each transaction is counted only once. If a transaction appears in a TC40 report and later becomes a chargeback, it is not duplicated in the metrics.
This practice prevents inflated fraud ratios and provides a fairer evaluation of a merchant’s true risk profile. While this approach is equitable, it also means that merchants cannot rely on post-fraud actions like refunds to erase a transaction from the record. Once a transaction is settled, it becomes part of the data set used to calculate the VAMP ratio.
Role of Settled Transactions in VAMP
The VAMP ratio is based exclusively on settled transactions. This means that any transaction that completes the settlement process, regardless of its outcome later, contributes to the total transaction count. Issuing a refund after a transaction is settled does not remove it from the VAMP equation.
Some merchants have attempted to mitigate fraud metrics by quickly refunding suspicious transactions flagged in EFWs. However, since refunds do not erase settled transactions from the VAMP ratio, this tactic has no impact on the merchant’s standing in the monitoring program. It may, however, reduce the likelihood of a chargeback, which could still be beneficial from a customer satisfaction standpoint.
Implications of Being Placed Under VAMP Monitoring
Merchants whose fraud or dispute ratios exceed Visa’s thresholds may be placed under monitoring. This can range from standard observation to more rigorous scrutiny, depending on the severity and persistence of the issue. The consequences of being in the program can include mandatory reporting, system audits, implementation of additional fraud prevention tools, and potential financial penalties.
For high-risk merchants, prolonged inclusion in VAMP could result in reputational damage, increased processing fees, or even termination of their merchant account. Acquirers may also decide to limit transaction volumes or restrict certain types of payments as a risk management measure.
Factors That Increase VAMP Risk Exposure
Several factors can elevate a merchant’s VAMP ratio and risk status. These include:
- Poor fraud prevention systems
- Lack of transaction monitoring
- High chargeback rates
- Misleading or confusing billing descriptors
- Inadequate customer service
- Poor fulfillment practices leading to customer dissatisfaction
Addressing these issues requires a coordinated approach that includes technology, staff training, and operational adjustments.
Best Practices for Reducing Risk Under VAMP
To minimize exposure and stay compliant under the Visa Acquirer Monitoring Program, businesses should adopt a comprehensive fraud management strategy. This starts with leveraging fraud detection tools that analyze transaction patterns, assess risk scores, and block high-risk activity in real-time.
Regularly reviewing TC40 data and responding to early fraud warnings helps merchants stay ahead of potential disputes. Establishing clear billing practices, setting accurate customer expectations, and maintaining open communication channels with buyers can further reduce non-fraud disputes.
Customer service teams should be trained to resolve issues before they escalate into chargebacks. Empowering these teams to issue refunds or replacements when necessary can make a measurable difference. Merchants should also maintain documentation of all transactions, customer communications, and shipping confirmations to support dispute resolution if needed.
Importance of a Reliable Payment Partner
Finally, working with a knowledgeable and proactive payment provider can greatly influence a merchant’s success in managing fraud. A good acquiring partner will offer insights into VAMP trends, provide fraud mitigation tools, and assist in navigating Visa’s compliance landscape. By collaborating with an experienced payment provider, merchants can enhance their fraud prevention efforts while maintaining high authorization rates.
Deep Dive Into TC40 Reports and Early Fraud Warnings
Fraud is one of the most pressing threats in the digital payments space, and mitigating it requires detailed data, proactive tools, and deep operational awareness. One of the foundational data sources used in fraud management across Visa’s ecosystem is the TC40 report.
TC40 data, along with Early Fraud Warnings (EFWs), plays a central role in Visa’s risk monitoring programs—including the Visa Acquirer Monitoring Program (VAMP). Understanding how TC40 reports work and how to use them effectively is essential for any merchant striving to reduce fraud, maintain compliance, and preserve their reputation.
What Is a TC40 Report?
A TC40 report is a standardized data file generated by Visa whenever a cardholder reports a transaction as fraudulent to their issuing bank. This happens before a chargeback is officially filed. The report consolidates fraud-related transaction data and is shared with acquiring banks and payment processors. Its main purpose is to alert stakeholders—particularly acquirers and their merchants—about potentially fraudulent transactions, allowing them to take action before fraud proliferates or escalates to disputes.
Each TC40 report includes detailed information such as the card number, merchant information, transaction timestamp, the fraud type (categorized under Visas fraud reason codes), and additional metadata. The data is anonymized in a way that protects cardholder privacy but provides enough context for merchants and acquirers to identify problematic patterns.
How Do Early Fraud Warnings (EFWs) Fit In?
Early Fraud Warnings are a proactive feature of the TC40 process. When a card issuer suspects that a transaction is fraudulent but before initiating a chargeback, they submit an alert through Visa’s system. This EFW is transmitted in real time, giving the acquiring bank and merchant an opportunity to address the transaction.
EFWs are one of the most valuable tools in fraud prevention because they enable merchants to cancel or refund a transaction, communicate with the cardholder, or flag similar transactions before they process further. Even if the EFWed transaction cannot be reversed, it allows for internal controls to be triggered that can help detect related fraudulent activity across other transactions or accounts.
Connection Between TC40 Data and the VAMP Program
Visa’s Acquirer Monitoring Program leverages TC40 reports extensively. Any transaction that appears in a TC40 report, including those flagged as EFWs, is counted toward the fraud portion of the VAMP ratio. This is because Visa considers any transaction reported by an issuer as suspected fraud to be a credible signal, regardless of whether a chargeback is eventually filed.
The inclusion of TC40 data in VAMP calculations means that merchants must treat these reports seriously. Ignoring early warnings or failing to analyze fraud trends can result in crossing fraud thresholds, which may trigger VAMP enrollment and increase operational scrutiny.
Common Types of Fraud in TC40 Reports
TC40 reports classify fraud incidents using a range of codes that help identify the type and source of the fraud. These include:
- Counterfeit card fraud, often associated with compromised point-of-sale systems
- Lost or stolen card fraud, where the legitimate cardholder has lost control of their physical card
- Card-not-present fraud, frequently occurring in online or remote transactions
- Friendly fraud, where the cardholder claims fraud but actually authorized the transaction
- Account takeover, where fraudsters gain access to and use a legitimate customer’s account details
Each of these categories requires a different response strategy, so understanding the breakdown of fraud types in a merchant’s TC40 data is key to developing an effective fraud mitigation plan.
Why Merchants Should Monitor TC40 Reports
Regularly reviewing TC40 reports allows merchants to identify vulnerabilities in their transaction flows. For example, repeated incidents of card-not-present fraud may indicate weak authentication procedures, while spikes in lost/stolen card fraud might signal the need for better physical security or point-of-sale updates.
Moreover, TC40 data can be used to inform the configuration of fraud filters and rules in fraud detection platforms. By studying the timing, card types, countries of origin, or purchase channels of flagged transactions, merchants can refine their defenses and minimize future fraud.
Monitoring TC40 reports also prepares merchants for conversations with acquirers of payment providers. If a merchant’s fraud ratio begins to climb, having a well-documented understanding of their TC40 exposure enables them to demonstrate that they are addressing the issue proactively.
Limitations and Misconceptions About TC40 Reports
Despite their value, TC40 reports are not perfect fraud detection tools on their own. They reflect only the data that issuers report—some issuers may report suspicious activity aggressively, while others may be more reserved. This variability means that two merchants with identical fraud experiences could appear quite different in Visa’s monitoring systems depending on how their customers’ issuers behave.
Another common misconception is that TC40 reports directly lead to chargebacks. While they often precede disputes, they are not themselves chargeback notices. Instead, they serve as a warning mechanism. Merchants who receive an EFW should not assume a chargeback is inevitable; instead, they should use the alert as an opportunity to investigate and resolve the issue.
TC40 Reports vs. Chargeback Reports
It’s important to distinguish between TC40 reports and chargeback reports. TC40s are initiated by issuers based on cardholder claims of unauthorized activity and are focused on fraud identification. Chargeback reports, on the other hand, are formal requests to reverse a transaction and can stem from both fraud and non-fraud reasons, including product dissatisfaction, delivery issues, or billing errors.
Understanding this difference helps merchants tailor their response. TC40 alerts should prompt fraud mitigation efforts, while chargeback reports may require customer service intervention, order fulfillment reviews, or clarification of business terms.
Strategies for Using TC40 Data Effectively
To derive value from TC40 data, merchants should integrate report analysis into their regular fraud review cycles. Key strategies include:
- Cross-referencing TC40 entries with internal order records to detect anomalies
- Identifying high-risk geographies, IP addresses, or device fingerprints
- Adjusting fraud filters based on frequently flagged transaction characteristics
- Creating internal alerts when transactions meet criteria similar to past TC40 entries
- Collaborating with fraud detection vendors to feed TC40 insights into machine learning models
Additionally, some merchants create internal dashboards or scoring systems to track the volume and type of TC40 entries over time. This allows for visualizing trends and pinpointing specific time frames or campaigns that may have elevated fraud risk.
Responding to Early Fraud Warnings
When a merchant receives an EFW, swift and thoughtful action is required. The ideal response process includes:
- Reviewing the transaction details and validating against order logs
- Attempting to contact the customer for confirmation (if contact information is available)
- Issuing a refund or blocking shipment if fraud is suspected
- Recording the case in a fraud incident log for trend analysis
Even if no action is taken (for example, if the transaction has already been fulfilled), the merchant should use the data to refine future fraud checks. Repeated inaction in response to EFWs could signal to Visa that a merchant is not engaged in active fraud prevention.
How Payment Providers Can Assist With TC40 Management
Many modern payment processors and acquiring partners offer tools that simplify TC40 report analysis. These platforms may automatically flag transactions that appear in TC40 reports, present the data in readable formats, or offer suggestions for actions based on fraud type and customer behavior.
Merchants should work closely with their providers to customize fraud prevention strategies using TC40 data. A knowledgeable partner will also help interpret VAMP metrics and ensure compliance with Visa’s guidelines.
Managing Non-Fraud Disputes in the Visa Acquirer Monitoring Program
While fraud is a critical focus within Visa’s Acquirer Monitoring Program (VAMP), it is not the only metric merchants must monitor. Non-fraud disputes also play a significant role in determining a merchant’s risk profile. These disputes—arising from issues such as customer dissatisfaction, unrecognized billing descriptors, or operational errors—are counted in the same VAMP ratio used to monitor fraud-related cases.
Understanding how non-fraud disputes affect VAMP compliance and taking proactive steps to minimize them is essential for businesses looking to safeguard their merchant standing and reduce unnecessary operational costs.
Understanding Non-Fraud Disputes
Non-fraud disputes, often referred to as chargebacks for service-related issues, differ from fraud in that the cardholder typically recognizes the transaction but contests it for another reason. These disputes fall under Visa’s dispute categories that include processing errors, duplicate charges, cancelled subscriptions, goods not received, services not rendered, or merchandise not as described.
Although these disputes are not based on fraud, they can still negatively impact a merchant’s VAMP ratio. When a transaction is contested for any reason—fraudulent or otherwise—and escalates into a formal chargeback, it contributes to the total number of dispute cases monitored by Visa.
Why Non-Fraud Disputes Matter in VAMP
Visa’s VAMP calculation considers both fraud and non-fraud disputes because both represent potential weaknesses in a merchant’s operational controls, customer service practices, or overall transaction management. A high number of non-fraud disputes can signal customer dissatisfaction, unclear return or cancellation policies, misleading advertising, or inconsistent fulfillment practices.
Including non-fraud disputes in the VAMP metric also reflects Visa’s goal of encouraging merchants to create smoother, clearer, and more trustworthy customer experiences. From a risk management perspective, non-fraud disputes can still result in financial losses, penalties, increased processing fees, and strained relationships with acquirers.
Common Types of Non-Fraud Disputes
To reduce their impact, merchants must first understand the most frequent causes of non-fraud disputes:
- Product or Service Not Received: The customer claims they did not receive what they paid for, whether it’s a physical product or digital service.
- Cancelled Recurring Transaction: The cardholder was charged after attempting to cancel a subscription or recurring billing.
- Merchandise Not as Described: The product received did not match what was advertised or promised during the sale.
- Refund Not Processed: The customer returned an item or cancelled an order but did not receive a refund.
- Duplicate or Incorrect Charges: Customers are billed more than once or for the wrong amount.
- Credit Not Issued: The cardholder was promised a credit or discount that was never applied.
VAMP Ratio and Non-Fraud Disputes
The VAMP ratio is a measure of total fraud and non-fraud disputes divided by the number of settled transactions within a given timeframe. This includes chargebacks arising from both genuine unauthorized use and customer complaints or errors.
Because each dispute counts against the merchant—even when it stems from operational oversights—it is critical to address non-fraud issues with the same urgency and strategic intent as fraud. Even merchants with strong fraud controls may fall into VAMP monitoring if their non-fraud dispute volume remains high.
Best Practices to Minimize Non-Fraud Disputes
Merchants can take several steps to reduce non-fraud disputes and maintain a healthy VAMP ratio. These include improvements in customer service, communication clarity, and fulfillment accuracy.
Use Clear Billing Descriptors
Use Clear Billing Descriptors One of the most common causes of non-fraud disputes is unrecognized billing descriptors. If a customer does not immediately recognize a charge on their statement, they may initiate a dispute thinking it is fraudulent. Merchants should ensure that billing descriptors match the brand name the customer expects to see. Including a support phone number or website in the descriptor can also help clarify the charge.
Improve Product and Service Descriptions
Improve Product and Service Descriptions Disputes often arise when customers feel misled by vague or inaccurate descriptions. Ensure that all product details, terms of service, pricing, and delivery expectations are clearly presented at the point of purchase. Use real photos, detailed specs, and FAQs to eliminate confusion.
Streamline Order Fulfillment
Streamline Order Fulfillment Slow or inconsistent delivery can quickly lead to chargebacks. Track shipping times, provide reliable tracking numbers, and keep customers informed if delays occur. For digital products, confirm delivery with a confirmation message or email.
Make Cancellation and Refund Policies Transparent
Make Cancellation and Refund Policies Transparent Customers are less likely to dispute charges when they understand how to cancel or request a refund. Make policies accessible and easy to understand. If offering subscriptions, send reminder emails before each billing cycle and allow cancellations via multiple channels.
Respond to Customer Complaints Promptly
Respond to Customer Complaints Promptly Quick responses to complaints can prevent disputes from escalating. Provide responsive customer support through multiple channels—email, chat, phone—and ensure inquiries are resolved before customers feel the need to contact their bank.
Monitor Dispute Trends
Monitor Dispute Trends Track reasons for chargebacks and analyze patterns. If disputes spike after a specific promotion, product release, or operational change, investigate the root cause. By using internal data and customer feedback, merchants can identify areas for improvement.
Role of Payment Providers in Managing Non-Fraud Disputes
Experienced payment providers play a vital role in helping merchants identify, manage, and reduce non-fraud disputes. Many offer tools that flag high-risk transactions, send real-time alerts about customer complaints, or track chargeback reasons. They may also provide dispute response services, helping merchants submit compelling evidence in representation processes.
Payment providers can also serve as advisors, guiding merchants through VAMP thresholds and recommending practices tailored to industry-specific risk factors. With data analytics and historical insight, they help predict when non-fraud dispute volumes may increase and support mitigation strategies.
Leveraging Dispute Resolution Tools
Merchants can also reduce the financial and operational burden of non-fraud disputes by using resolution platforms like Visa’s Rapid Dispute Resolution (RDR) or third-party platforms integrated with their acquiring partner. These tools allow for automatic refund decisions based on predefined criteria, often avoiding formal chargebacks altogether.
For instance, if a cardholder files a dispute for a minor amount and the merchant has opted into RDR with a rule to auto-refund such claims, the dispute is resolved instantly. While this results in a refund, it prevents a chargeback from affecting the VAMP ratio, keeping the merchant’s standing intact.
Training Customer Service Teams
Your customer support team is on the front line of dispute prevention. Regular training should emphasize empathy, product knowledge, and clear communication. Equip teams with scripts, escalation paths, and refund policies that empower them to resolve complaints before they turn into chargebacks.
Customer service staff should also understand how their performance affects broader fraud and dispute metrics. Linking resolution speed and satisfaction scores to dispute rates can reinforce the importance of their role in risk management.
Tracking and Reporting Non-Fraud Dispute KPIs
Merchants serious about maintaining low dispute ratios should track KPIs related to non-fraud issues. These include:
- Dispute volume by reason code
- Average dispute resolution time
- Refund rate and refund time
- Customer satisfaction and NPS scores
- Repeat dispute customers or accounts
Use this data to generate internal scorecards, performance reports, and monthly reviews. Share insights with product teams, logistics, and marketing to align everyone around reducing dispute risks.
Common Pitfalls and Solutions
Consider a subscription-based fitness app that saw an increase in chargebacks due to auto-renewals not being clearly communicated. By adding pre-renewal email reminders and an easy cancellation flow, the company cut its non-fraud disputes by over 60% in one quarter.
In another case, a merchant selling beauty products faced disputes related to shipments arriving damaged or late. By upgrading to more reliable shipping partners and adding quality control for packaging, they reduced service-related chargebacks by 45%.
These examples illustrate how seemingly small operational improvements can have a significant impact on VAMP compliance.
Building a Holistic Fraud and Dispute Management Strategy Under VAMP
Successfully navigating Visa’s Acquirer Monitoring Program (VAMP) requires more than just addressing isolated fraud cases or resolving chargebacks as they arise. To stay compliant and competitive, businesses must implement a comprehensive fraud and dispute management strategy—one that proactively identifies risks, resolves issues at their root, and fosters customer trust.
VAMP and TC40 series provide a roadmap for building a holistic approach to fraud prevention and dispute management that minimizes exposure and maximizes operational efficiency.
Value of a Unified Strategy
Disputes and fraud, while different in origin, often stem from similar breakdowns in the transaction lifecycle. Whether it’s a fraudulent purchase slipping past filters or a customer confused by unclear return policies, the end result is a chargeback that impacts a merchant’s VAMP ratio. A unified strategy ensures that both fraud and non-fraud issues are tackled through consistent procedures, shared data insights, and coordinated cross-functional efforts.
A siloed approach—where fraud prevention, customer service, fulfillment, and compliance operate independently—leads to inefficiencies, missed warning signs, and higher risk. A holistic strategy, by contrast, connects every part of the customer experience to a shared goal: preventing disputes and minimizing financial exposure.
Key Components of a Holistic Fraud and Dispute Strategy
To reduce risk and stay within acceptable VAMP thresholds, businesses should implement the following core elements in their fraud and dispute management programs.
Risk-Based Transaction Screening
Risk-Based Transaction Screening Fraud prevention begins before a transaction is even approved. Merchants should implement risk-based authentication and transaction screening tools that evaluate a wide range of data points—device ID, IP address, geolocation, transaction velocity, and historical behavior—to flag suspicious activity in real time.
Machine learning and AI-driven fraud detection platforms can help evolve rules and adapt to emerging threats. For example, Card Acquiring solutions offer intelligent fraud detection that automatically blocks high-risk transactions while maintaining approval rates.
Proactive Monitoring of TC40 and EFW Alerts
Proactive Monitoring of TC40 and EFW Alerts Visa TC40 reports and Early Fraud Warnings (EFWs) provide vital insight into emerging fraud patterns. Businesses should treat these alerts as high-priority signals and investigate the underlying causes immediately.
Merchants can incorporate TC40 data into their internal risk scoring models to identify problematic geographies, product categories, or customer segments. Tracking EFWs over time also helps distinguish isolated fraud attempts from systemic vulnerabilities.
Dispute Trend Analysis
Dispute Trend Analysis Understanding why disputes occur is essential to prevent them. Merchants should conduct regular root-cause analyses of both fraud and non-fraud chargebacks. This involves categorizing disputes by reason code, correlating them with marketing campaigns, new product launches, or system changes, and identifying operational gaps.
Advanced dashboards and analytics tools can visualize dispute trends, making it easier to develop targeted mitigation strategies. Sharing these insights across departments ensures all teams are aligned around prevention goals.
Pre-Dispute Customer Resolution
Pre-Dispute Customer Resolution One of the most effective ways to avoid a formal dispute is to resolve customer concerns before they escalate. Providing excellent customer service—fast response times, clear escalation paths, and fair resolution policies—can dissuade cardholders from contacting their banks.
Live chat, helpdesk software, and ticketing systems should be optimized to flag potentially at-risk interactions. Agents should be trained to identify signs of customer frustration that could lead to disputes and take immediate steps to resolve issues.
Refund and Cancellation Optimization
Refund and Cancellation Optimization Refunding a dissatisfied customer may seem like a loss, but it’s often far less costly than a chargeback. Merchants should offer seamless, self-service refund and cancellation processes. Preemptive refunds, particularly in response to EFWs, can prevent disputes from being formally filed, preserving the VAMP ratio.
Automation plays a key role here. With tools like Visa’s Rapid Dispute Resolution (RDR), merchants can automatically accept certain dispute conditions, avoiding the chargeback process altogether. Merchants can configure thresholds—such as dispute amounts under a certain value—to be refunded instantly, reducing back-office burden and customer friction.
Cross-Functional Collaboration
Cross-Functional Collaboration Fraud and dispute management should not rest solely on the shoulders of payment or risk teams. It’s a company-wide responsibility. Sales and marketing teams must ensure promotions are transparent and expectations are accurate. Fulfillment must guarantee timely and reliable delivery. Product teams must consider fraud prevention features in user experience design.
Create cross-functional teams or task forces that meet regularly to review dispute data, fraud trends, and customer feedback. By aligning priorities and accountability across departments, businesses can build a culture of risk awareness and continuous improvement.
Continuous Staff Training
Continuous Staff Training Training is a vital component of a successful fraud and dispute strategy. Customer service representatives, fraud analysts, and operations teams must be trained on VAMP requirements, dispute handling best practices, and fraud recognition techniques.
Staff should also understand how their actions affect key risk metrics. For example, a support agent who encourages a refund over a dispute can protect the company’s VAMP ratio. Encourage a mindset of proactive problem-solving and customer-first thinking across all frontline teams.
KPIs and Reporting
KPIs and Reporting Data-driven decision making is the backbone of any effective risk strategy. Businesses should define and track clear KPIs related to fraud and dispute performance. These might include:
- Fraud-to-sales ratio
- Total dispute ratio (VAMP calculation)
- Time to resolution
- First contact resolution rate
- Customer satisfaction scores
- EFW and TC40 frequency
Use these metrics to evaluate the success of prevention efforts, spot rising risks early, and report outcomes to senior leadership.
Leveraging Technology to Streamline Management
Modern technology offers a wide array of tools to help merchants monitor and manage fraud and disputes. From real-time fraud scoring engines to integrated chargeback management platforms, the right stack can significantly reduce manual work and error-prone processes.
Solutions that integrate fraud prevention with dispute response—especially those that interface directly with Visa’s ecosystem—can create a streamlined workflow that adapts to evolving threats. Card Acquiring platform, for example, combines fraud analytics, dispute resolution, and compliance tools to give merchants full visibility and control over their risk exposure.
Aligning Strategy With Regulatory Compliance
Visa’s VAMP program is not the only regulatory concern for merchants. Global businesses must also comply with regulations like PSD2 (Payment Services Directive 2) in Europe, which mandates Strong Customer Authentication (SCA), and various data protection laws such as GDPR or CCPA.
A holistic fraud strategy should be aligned with these requirements. Risk tools must support SCA where applicable, customer data must be securely handled, and dispute records must be retained according to local compliance standards. Working with an acquirer or payment provider that understands regional regulations can prevent costly missteps.
Bringing It All Together
An online electronics retailer struggled with high dispute volumes due to shipping delays, vague billing descriptors, and poor customer support availability. By implementing a holistic strategy—including reworking their billing descriptor, adding live chat support, integrating automated fraud filters, and using RDR for minor disputes—they cut their VAMP ratio in half within four months. This allowed them to avoid VAMP penalties, reduce operational losses, and improve customer retention.
Creating a Culture of Risk Awareness
Ultimately, the success of any fraud and dispute strategy depends on company culture. Businesses that prioritize customer trust, operational transparency, and accountability across teams are best positioned to meet Visa’s standards. Educating staff, celebrating success in reducing disputes, and treating risk prevention as a shared objective fosters long-term resilience.
Encourage open communication between departments, reward proactive behavior that prevents disputes, and incorporate risk metrics into performance evaluations. These cultural shifts reinforce strategic efforts and promote sustained compliance.
Conclusion
Navigating Visa’s Acquirer Monitoring Program (VAMP) requires more than reactive responses to fraud and disputes—it demands a structured, data-driven, and strategic approach across the entire transaction lifecycle. Through this four-part series, we’ve explored the critical mechanics of the VAMP ratio, how fraud is flagged and reported via TC40 and Early Fraud Warnings (EFWs), and the significant role both fraud and non-fraud disputes play in a merchant’s risk profile.
Established the foundational understanding of how Visa calculates the VAMP ratio and why TC40 reports are essential in identifying early fraud activity. Merchants learned that each transaction—regardless of later refunds or dispute outcomes—counts toward this ratio, making proactive prevention crucial.
Deeper into the mechanics of TC40 reports and EFWs, clarifying their role in Visa’s fraud monitoring. These early alerts, though often misunderstood, serve as powerful tools for identifying and stopping fraud before it escalates. Understanding how and when issuers generate these reports empowers merchants to intercept risk at its earliest point.
Addressed the often-overlooked realm of non-fraud disputes, which can impact a merchant’s VAMP ratio just as significantly as confirmed fraud. Chargebacks stemming from fulfillment errors, unclear billing, or poor customer communication may not involve criminal activity, but they still carry reputational and financial consequences. Reducing these requires customer-centric processes, timely communication, and optimized support channels.
Finally, outlined the blueprint for building a holistic fraud and dispute management strategy. It is not enough to rely on fraud filters or chargeback responses in isolation. A truly effective risk posture integrates fraud detection, dispute analysis, pre-dispute resolution, cross-functional collaboration, staff training, and performance monitoring into a unified system. Technology and strong acquirer partnerships, such as those available through solutions Card Acquiring, can further streamline this effort.
As fraudsters grow more sophisticated and customer expectations continue to rise, merchants must take a proactive, comprehensive, and culture-driven approach to risk management. By understanding VAMP metrics, responding swiftly to TC40 and EFW data, addressing non-fraud disputes with care, and building an end-to-end fraud strategy, businesses can protect their reputations, maintain compliance, and thrive in the modern payment ecosystem.