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Consumer Discretionary
As the digital payment landscape continues to evolve, Visa has introduced a significant update to its fraud and dispute management framework with the Visa Acquirer Monitoring Program (VAMP). Effective April 1, 2025, VAMP consolidates Visa's existing programs, such as the Visa Fraud Monitoring Program (VFMP) and Visa Dispute Monitoring Program (VDMP), into a single, unified system. This move aims to enhance transaction security and reduce fraudulent activities across the payment ecosystem. For merchants, understanding and adapting to these changes is crucial to avoid penalties and maintain smooth operations.
The VAMP program is designed to streamline monitoring processes, ensuring both acquirers and merchants adhere to stricter standards. Key components include:
Starting in April 2025, VAMP introduces two sets of thresholds: an initial set and a stricter set effective January 1, 2026. For merchants, the initial excessive threshold is 1.5%, while the stricter threshold reduces this to 0.9% in 2026. Acquirers face a stricter threshold of 0.3% in 2026 for being classified as Above Standard. Exceeding these thresholds can result in significant fees:
Visa has extended the advisory period until October 1, 2025, providing merchants and acquirers a grace period to adjust without incurring penalties. After this period, enforcement begins, and exceeding thresholds will trigger enforcement fees[1][2][3].
Staying compliant with VAMP requires proactive strategies from merchants. Here are some essential steps to ensure compliance:
Merchants should leverage advanced tools like:
To manage disputes effectively, merchants should utilize tools such as:
Merchants must track their VAMP ratio and transaction trends closely to ensure compliance. This involves:
Ensure that staff is well-trained on VAMP requirements and fraud prevention techniques. Update internal policies to align with VAMP standards, emphasizing proactive compliance management.
The impact of VAMP on merchants is multifaceted:
Merchants must adapt to stricter thresholds, which may lead to increased penalties if not managed properly. The focus on preventing enumeration attacks (card testing) also poses new challenges.
High-risk industries such as cryptocurrency and luxury goods will face heightened scrutiny, necessitating more robust fraud prevention strategies.
Acquirers may set stricter thresholds for their merchants to maintain compliance, potentially triggering merchant-specific penalties even if the merchant's ratio is below Visa's threshold.
To navigate the transition smoothly, merchants should:
By taking proactive steps to meet these new standards, merchants can enhance their fraud management capabilities and avoid potential penalties, positioning themselves for success within the evolving payment landscape.
Visa's VAMP program represents a significant shift in fraud and dispute management, offering both challenges and opportunities for merchants. By embracing advanced fraud prevention tools, refining dispute resolution processes, and focusing on real-time monitoring, businesses can not only comply with VAMP but also build a more resilient and secure payment environment. As the digital payment ecosystem continues to grow, being ahead of compliance changes is essential for sustained viability and success in today's marketplace.
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