Understanding VAMP Thresholds: A Complete Guide for Merchants

What is VAMP?

The Visa Acquirer Monitoring Program (VAMP) is Visa's unified framework for monitoring merchant fraud and dispute activity at the acquirer level. Launched to replace older, fragmented monitoring programs, VAMP creates a single, comprehensive system for evaluating merchant risk.

VAMP tracks three core metrics:

Fraud reports (TC40) - Fraud notifications filed by issuers
Chargebacks (TC15) - Dispute transactions processed through the network
Settled transaction volume - Your total processed Visa transactions

For high-volume merchants, understanding VAMP is essential—it directly impacts penalties, fees, and continued processing ability.

How VAMP Thresholds Work

VAMP introduces a combined ratio methodology that evaluates both fraud and disputes against your total settled transaction volume.

The VAMP Ratio Formula

The core calculation is straightforward:

VAMP Ratio = (TC40 Fraud Count + TC15 Dispute Count) / TC05 Settled Transaction Count

This unified approach means that both fraud reports and chargebacks contribute equally to your risk profile. A merchant with low chargebacks but high fraud reports can still exceed thresholds.

Threshold Levels

Visa defines multiple threshold tiers:

| Level | VAMP Ratio | Consequence | |-------|------------|-------------| | Standard | < 0.9% | Normal processing | | Early Warning | 0.9% - 1.5% | Increased monitoring | | Excessive | > 1.5% | Active program enrollment |

Merchants in the "Excessive" tier face:

Monthly non-compliance assessments
Required action plans
Potential processing restrictions

Why This Matters

Being placed into VAMP monitoring triggers:

Higher scrutiny - Your acquirer will require detailed reporting
Financial reserves - Processors may hold funds as security
Operational burden - Additional compliance documentation
Account risk - Repeated violations can lead to termination

Key Dates and Monitoring Windows

VAMP evaluates performance on a rolling monthly basis:

Activity in Month N
Reported and evaluated in Month N+1
Consequences applied in Month N+2

This lag means your current behavior is shaping your risk profile one to two months from now. By the time you see VAMP notifications, the underlying issues occurred weeks ago.

Program Entry and Exit

Entry: Exceeding thresholds for a single month triggers monitoring
Exit: Typically requires 3 consecutive months below thresholds
Recurrence: Merchants who exit and re-enter face accelerated penalties

Calculating Your VAMP Exposure

Step 1: Gather Your Data

To calculate your current VAMP ratio, you need:

TC40 fraud report count (from your processor or acquirer)
TC15 chargeback count (from your dispute management system)
TC05 settled Visa transaction count (from your payment processor)

Step 2: Apply the Formula

Example calculation:

TC40 Fraud Reports: 150
TC15 Chargebacks: 200
TC05 Settled Transactions: 50,000

VAMP Ratio = (150 + 200) / 50,000 = 0.7%

This merchant is below the threshold but should monitor trends closely.

Step 3: Segment Your Risk

Break down your metrics by:

Payment processor or MID - Identify which merchant IDs drive risk
Product category - Some products naturally carry higher dispute rates
Traffic source - Affiliate or advertising channels may have different fraud profiles
Geography - International transactions often have elevated risk

Strategies to Stay Below Thresholds

Reduce Fraud Reports (TC40)

Implement stronger pre-authorization fraud screening
Use 3D Secure authentication on higher-risk transactions
Decline suspicious transactions before settlement
Monitor for card testing and velocity attacks
Block known fraudulent IPs and device fingerprints

Reduce Chargebacks (TC15)

Improve checkout clarity to reduce "friendly fraud"
Establish faster refund processing (before customers dispute)
Use clear billing descriptors customers recognize
Provide excellent customer service with easy contact options
Implement alerts services like Ethoca and Verifi to stop disputes early

Increase Transaction Volume (TC05)

While this isn't always controllable, more transactions lower your ratio:

Grow legitimate sales volume
Reduce cart abandonment
Improve authorization approval rates

Building a VAMP Monitoring Program

Weekly Tracking

Don't wait for monthly reports. Track weekly to catch trends early:

Calculate your rolling 30-day VAMP ratio
Flag any week-over-week increases above 10%
Identify which segments are driving changes

Cross-Functional Alignment

Ensure these teams share VAMP metrics:

Fraud prevention - Owns TC40 reduction
Customer service - Can prevent escalation to TC15
Marketing - Traffic quality affects both metrics
Operations - Shipping and fulfillment impact dispute rates

Early Warning Systems

Set internal thresholds well below Visa's limits:

Green: VAMP ratio < 0.5%
Yellow: VAMP ratio 0.5% - 0.8%
Red: VAMP ratio > 0.8%

This gives you time to respond before official program enrollment.

The Cost of Non-Compliance

If you consistently exceed VAMP thresholds:

Assessment fees starting at $25,000+ per month
Higher processing rates from your acquirer
Rolling reserves holding 5-10% of your volume
Account termination for persistent violations
MATCH list placement affecting future processing ability

For high-growth merchants, VAMP violations can cost more than almost any other operational risk.

Taking Action

Treat VAMP as an early-warning system rather than a surprise penalty:

Know your numbers before Visa does
Build reporting that mirrors Visa's methodology
Use every dispute as feedback for improving fraud controls and customer experience
Partner with your acquirer proactively when metrics trend upward

When you understand the thresholds and react quickly, VAMP becomes a guardrail—not a cliff.