SAN FRANCISCO — Visa said it will begin enforcing a new fraud prevention and dispute management program Oct. 1, shifting more responsibility for combating fraud to merchants and their acquiring banks.
The initiative, called Visa Acquirer Monitoring Program, or Vamp, ends a six-month advisory period that began April 1. The San Francisco-based card network said the program consolidates five existing fraud and dispute programs and 38 remediation processes into a single framework.
Under Vamp, merchants and their processors must meet compliance standards based on a formula that measures fraud and dispute levels against overall payments volume. Those that fail to meet the thresholds could face fees and fines.
Fraud Rates Go Up
“There’s no doubt that as more digital transactions take place, as more purchases are online … the fraud rates go up,” Chargeback Gurus CEO Tim Tynan said, according to Payments Dive. “So, Visa needs to find ways to slow that growth.”
The report said the program comes amid a surge in digital attacks on card credentials, known as “enumerations,” which Visa said caused $1.1 billion in losses last year. The company estimates the changes could cut global fraud losses by as much as $2.5 billion.
Vamp also aims to address rising consumer “friendly fraud,” in which customers dispute legitimate charges. Such chargebacks jumped to $11 billion last year, up about 50% since 2019, according to Datos Insights.
Organizational Size Matters
Tynan told Payments Dive large merchants with more bargaining power may see less of an effect, while smaller retailers could bear more costs. Visa is also requiring acquiring financial institutions to take on greater oversight responsibilities, with additional measures phasing in next year.
The report added that the company’s push comes as rivals pursue their own fraud-fighting strategies; Mastercard, for example, has pledged to tokenize all transactions by 2030.
“Merchants will always have a concern about fees,” Tynan said. “But from Visa’s perspective, this is about better acceptance of cards and transactions.”
