Chargeback Ratios and Monitoring Programs

Card networks watch how many of a merchant’s payments end up disputed. When the numbers get too high, the network notifies the merchant’s bank, and the bank and your payment provider act. This guide explains the measures the networks publish.

How Visa measures it

Visa’s Acquirer Monitoring Program (VAMP) uses one count-based ratio for card-not-present transactions: fraud reports plus disputes, divided by settled transactions. Visa’s fact sheet excludes disputes resolved through pre-dispute solutions and some fraud reports that qualify for Compelling Evidence 3.0.

For merchants in the U.S., the fact sheet sets the “Excessive Merchant” level at a ratio of 220 basis points (2.2%) with at least 1,500 monthly fraud and dispute counts. A footnote says the threshold dropped to 150 basis points (1.5%) on 1 April 2026. A basis point is one hundredth of a percent. Visa’s separate guidelines for merchants say it monitors dispute activity every month and notifies acquirers about merchants with excessive disputes.

How Mastercard measures it

Mastercard’s Excessive Chargeback Program flags merchants as Excessive Chargeback Merchants or High Excessive Chargeback Merchants. It counts the chargebacks an acquirer receives for a merchant in a calendar month, divides by the number of Mastercard transactions for that merchant in the preceding month, and multiplies by 10,000 to get basis points. The thresholds themselves are in a separate Mastercard manual that we could not read, so we do not state them.

A worked example

A merchant settles 2,000 card-not-present Visa transactions in a month and has 30 fraud reports and disputes. The ratio is 30 ÷ 2,000, or 150 basis points (1.5%). That is at Visa’s 150 basis point merchant level, but the merchant would not be identified on count alone because Visa also requires at least 1,500 monthly fraud and dispute events in the U.S. This is arithmetic using the published definition, not a prediction of what any provider will do.

What providers do

Providers set their own rules. Square says it places rolling reserves, where a percentage of card payments is set aside and released over time, and lists chargeback rates in your industry and for your account among the reasons. PayPal says it reviews reserves at least every 180 days and may adjust or remove them as performance improves. Stripe’s explainer on high-risk accounts says many require a rolling reserve and may have longer settlement periods. See our high-risk merchant account guide for how underwriting works.

How to lower the ratio

Visa recommends tracking disputes by condition and as a share of sales, tracking card-present and card-absent separately, and working with your acquirer on a dispute-reduction plan that identifies the root cause. Our prevention guide covers the practices behind the plan.