The Networks Are Watching

Understanding the ever-evolving standards that shape merchant risk

Every merchant agrees to card network rules when they start accepting payments. Those rules come with an expectation that merchants will maintain "acceptable" levels of fraud, chargebacks, disputes, and transaction quality. Visa and Mastercard, the major card networks, are continuously measuring those figures through a series of monitoring programs that operate behind the scenes. The catch is that "acceptable" is a moving target. Thresholds change. Programs evolve. New risk signals are introduced. What was comfortably within range a few years ago may receive greater scrutiny today. With recent changes to Visa's VAMP program and continued monitoring from Mastercard, it's worth taking a look at the standards that shape merchant performance across the payments ecosystem.

Visa's VAMP: Raising the Bar

Visa's Acquirer Monitoring Program (VAMP) is one of the most significant changes to merchant risk monitoring in recent years. The program combines fraud and dispute activity into a single measurement and replaces Visa's previous fraud and dispute monitoring frameworks with one unified standard.

The formula is straightforward:

Fraud Reports + Disputes ÷ Total Settled Transactions

Current VAMP Thresholds

Metric	Threshold
Merchant VAMP Ratio	1.5%
Minimum Fraud + Dispute Events	1,500 per month
Acquirer Above Standard	0.5%
Acquirer Excessive	0.7%
Enumeration Ratio	20%
Enumeration Volume	300,000 transactions

The reduction from 2.2% to 1.5% on April 1, 2026 significantly lowered the margin for error. At the same time, Visa expanded its focus to include enumeration attacks, commonly known as card testing.

For merchants, the message is simple: risk indicators that may have been considered manageable a few years ago are receiving greater attention today.

The standards are getting tighter.

Where Mastercard Draws the Line

Mastercard's monitoring framework focuses on three primary areas: chargebacks, fraud, and potential scam activity. Each is monitored through a separate program with its own thresholds and consequences.

Excessive Chargeback Merchant (ECM)

Mastercard measures chargeback performance using a Chargeback-to-Transaction Ratio (CTR):

Current Month Chargebacks ÷ Previous Month Transactions

A merchant enters the program when both the chargeback count and chargeback ratio exceed Mastercard's thresholds.

Category	Monthly Chargebacks	Chargeback Ratio
ECM	100-299	1.5%-2.99%
HECM	300+	3.0%+

Mastercard evaluates both volume and ratio because a merchant generating a small number of disputes presents a very different risk profile than one generating hundreds of chargebacks each month.

Merchants identified in ECM may be required to submit remediation plans and can face escalating assessments if performance does not improve.

Excessive Fraud Merchant (EFM)

EFM focuses specifically on fraud performance in e-commerce environments. A merchant can remain below ECM thresholds while still attracting attention under EFM.

Current EFM Thresholds

Metric	Threshold
E-commerce Transactions	1,000+
Fraud Chargeback Amount	$50,000+
Fraud Ratio	0.50%+
3DS Utilization	Below Mastercard thresholds

Mastercard generally prioritizes EFM when a merchant qualifies for both fraud and chargeback monitoring. That should tell merchants something important: managing chargebacks alone is not enough. Fraud performance receives just as much attention.

Scam Merchant Monitoring (SCAM)

Beginning July 24, 2026, Mastercard will require acquirers to investigate certain merchants within 72 hours when predefined warning signs appear. The goal is to identify potentially deceptive or fraudulent business models before they create widespread harm.

For newer merchants, one threshold stands out:

Metric	Threshold
Refund + Chargeback Rate	5%
Minimum Transactions	500
Merchant Age	First 6 Months

Other triggers include sharp declines in authorization approval rates, fraud reports from multiple issuers, Mastercard investigations, and alerts from merchant monitoring providers. If scam activity is confirmed, Mastercard processing can be terminated immediately.

For newer merchants and rapidly growing eCommerce businesses, this is one of the most important Mastercard developments to watch in 2026.

Risk Doesn't Stop With the Merchant

While programs like VAMP, ECM, EFM, and SCAM focus on merchant activity, the card networks also monitor the institutions responsible for bringing those merchants into the ecosystem.

One example is Visa's Global Risk Identification Program (GRIP).

GRIP is designed to identify emerging risk patterns across acquirers, processors, and merchant portfolios before those issues become larger network concerns. If a processor or acquiring bank develops a concentration of merchants exhibiting similar risk characteristics, Visa may increase scrutiny of that institution long before any single merchant becomes a headline problem.

The Ripple Effect

Risk management in payments flows from the top down.

Visa and Mastercard pressure the acquiring banks.

Acquiring banks pressure processors and payment facilitators.

Processors pressure merchants.

As the networks continue raising standards around fraud, chargebacks, compliance, and transaction quality, that pressure works its way through the entire ecosystem. Merchants will experience more scrutiny. More documentation requests. More account reviews. More questions about business models, fulfillment practices, customer complaints, and fraud controls. In some cases, merchants may be asked to implement corrective action plans. In others, they may face reserve requirements, processing restrictions, or account termination if performance fails to improve.

Programs like VAMP, ECM, EFM, SCAM, and GRIP may focus on different participants within the ecosystem, but they all point in the same direction: expectations are increasing, oversight is expanding, and the standards that define "acceptable" merchant performance continue to evolve.

Three Figures Worth Tracking

If you only monitor three payment health figures, make them these:

Metric	Healthy Range	Monitor Closely	Elevated Risk
Chargeback Ratio	Under 0.5%	0.5%-0.75%	Above 0.9%
Fraud Rate	Under 0.10%	0.10%-0.30%	Above 0.30%
Dispute Volume	Stable Trend	Rising Trend	Sustained Increase

These figures won't tell the entire story, but they provide a strong indication of how your business is trending. Most merchants don't enter monitoring programs overnight. The warning signs typically appear months before formal action is taken.

What Usually Triggers a Review?

While every program measures risk differently, the same themes appear repeatedly across the card networks:

• Rising chargeback ratios

• Increasing fraud rates

• Shipping and fulfillment issues

• Subscription billing complaints

• Sudden spikes in transaction volume

• Growing customer dissatisfaction

• Refund friction

• Card testing and enumeration attacks

None of these issues automatically place a merchant into a monitoring program. What matters is the pattern. The networks are looking for sustained trends that suggest risk is increasing rather than improving.

Final Thoughts

The card networks have always monitored merchant performance. What's changed is how much they're measuring and how quickly they can identify emerging risks.

Programs like VAMP, ECM, EFM, SCAM, and GRIP all point to the same conclusion: expectations are rising and oversight is becoming more proactive.

Merchants that consistently monitor fraud, disputes, customer experience, and operational performance will be in the strongest position to avoid unnecessary scrutiny and maintain healthy processing relationships.

Want to know whether your business is operating comfortably within network standards? Reach out to the Compaytence team for a payment health check.