Merchants need to get to grips with Visa’s new VAMP initiative

Visa is a name firmly etched into the minds of merchants worldwide. 

The company often refers to itself as a ‘global economic enabler,’ in a nod to its central role in facilitating international commerce and economic activity by providing a secure, reliable payment network that connects consumers, businesses, and financial institutions in every corner of the world. 

The numbers support this sentiment. A recent report highlighted that Visa managed over $12 trillion in total payments in 2023. The company has over 16,000 financial institution clients and more than 70 million merchants accept Visa for online payments. Additionally, there are approximately 4.3 billion Visa cards in circulation globally. 

So when Visa makes a significant change to its services, it’s fair to say it has a deep impact on merchants and other businesses. 

This will undoubtedly be the case with its enhanced Visa Acquirer Monitoring Program (VAMP) that’s due to launch on 1 April 2025. 

It’s the right time for a revamp

Fraud and disputes continue to disrupt merchants’ operations, giving them a major headache to contend with.

Global payment card fraud losses skyrocketed to $33.8 billion in 2023, according to the Nilson Report, whilst in the first half of 2024 criminals stole £571.7 million through payment fraud in the UK alone. These figures will continue to grow. 

It’s also widely expected that disputes will continue to rise sharply as the world’s consumers become increasingly comfortable with challenging transactions. According to Visa’s research, within the global Visa ecosystem alone, the number of disputes jumped by nearly half (47%) between 2019 and the end of 2023.

In response, Visa is consolidating its multiple fraud and dispute programmes into one new look, streamlined system. The updated VAMP will create a globally aligned fraud and dispute threshold for domestic and cross-border card-not-present (CNP) transactions to provide greater clarity and consistency to acquirers and their merchants. There will be two thresholds: the Merchant’s Portfolio Threshold refers to the maximum percentage of fraud and disputes allowed within their transactions, while the Acquirer’s Portfolio Threshold is the overall fraud and disputes rate across all merchants they service. 

It will also introduce an Enumeration Ratio to monitor fraudsters attempting to test stolen card details through unauthorised transactions. This ratio will be tracked using Visa Account Attack Intelligence (VAAI), which identifies enumeration patterns and enhances fraud prevention efforts.

Fraud and dispute thresholds will be shifting, with the various metrics from the other programmes combining into what Visa classes as a ‘more rounded payment integrity approach’. 

A pivotal role for payments partners

It is critical merchants adapt to these changes, or else they will face financial penalties and compliance issues. Payments providers have a key role to play in guiding their merchants through the VAMP transition, ensuring they stay compliant while strengthening fraud defences and dispute management strategies.

The first step is education. Merchants must understand exactly how the new VAMP ratios are calculated, including VAMP and enumeration rates. But beyond understanding the new metrics, merchants must also take proactive measures:

• Acknowledge that the old Visa fraud and dispute programmes will be replaced. Fraud reports (TC40) and non-fraud disputes will be combined.

• The VAMP ratio will be calculated differently. It will be calculated based on transaction counts, not dollar amounts – as in the previous Visa fraud programme.

• Be mindful of the new thresholds. For smaller merchants, it will be difficult to exceed the Merchant’s Portfolio Threshold (minimum 100 fraud reports and non-fraud disputes, $75,000 in fraud reports, and higher VAMP ratio threshold of 1.5%), but it is easier to exceed the Acquirer’s Portfolio Threshold due to the lower VAMP ratio limit (0.5% in 2025, decreasing to 0.3% from 2026). Acquirers will therefore be tougher in merchant underwriting and will take measures against merchants with high fraud/dispute rates. One of the most significant changes is that there will soon be fines for fraud reports (TC40) and non-fraud disputes if either the Merchant’s Portfolio Threshold or Acquirer’s Portfolio Threshold are breached - up to $10 per case. 

• Chargeback prevention must become a priority. With the VAMP threshold dropping to 0.3% from 2026, merchants must have robust chargeback prevention strategies in place.

• Fraud detection must be enhanced. The introduction of the Enumeration Ratio means merchants frequently targeted by fraudsters (e.g., card testing attacks) could be penalised. Implementing stronger fraud detection measures, such as AI-powered transaction monitoring, can help mitigate these risks. 

• No second chances. Visa is eliminating the ‘early warning’ stage, meaning merchants who exceed VAMP thresholds will immediately be classified as excessive. This makes proactive fraud and dispute management even more critical.

• Leverage transaction exemptions: Certain transactions are exempt from VAMP calculations, including those mitigated by RDR. Merchants should use these tools strategically to minimise their dispute ratios.

The enhanced VAMP will be kicking in from April 2025 with fines starting from 1 July 2025. The ripple effects will be felt across all the world’s markets. Merchants and acquirers must stay ahead of these changes by implementing the right tools and strategies to remain compliant while optimising payment security.