Big Changes Are Coming to the Payments Industry: Here’s What You Need to Know

Starting in April 2025, Visa will implement a new program called the Visa Acquirer Monitoring Program (VAMP). This program will replace the current systems for monitoring fraud and chargebacks—the Visa Dispute Monitoring Program (VDMP) and the Visa Fraud Monitoring Program (VFMP). VAMP combines both fraud and chargeback data into one system, requiring businesses to follow stricter rules.

Merchants in high-risk industries like adult entertainment, CBD, dating, and gaming will need to adapt their processes to meet stricter requirements and avoid penalties. At Vendo, we’re committed to guiding you through these changes and helping you stay compliant.

What Is VAMP?

VAMP is Visa’s way of modernizing how it monitors fraud and disputes. Fraud and chargebacks are challenges that arise when customers dispute a charge or when fraudulent transactions occur. These issues cost money, impact customer trust, and can lead to penalties from Visa.

In the past, Visa tracked these problems in two separate programs:

• VDMP: Focused on chargebacks (when a customer disputes a charge).
• VFMP: Focused on fraud notifications (alerts from banks about suspicious transactions).

VAMP combines these two programs into one system and introduces the VAMP Ratio, which measures a merchant’s combined fraud and chargeback activity.

Key VAMP Details

• What Counts Toward the VAMP Ratio?

• • • Fraud alerts: These are known as TC40 notifications and come from card issuers (banks).
    • Chargebacks: These are disputes initiated by customers, except for disputes specifically related to fraud (reason code 10.4).

• Thresholds for Compliance:

• • Starting in April 2025, your VAMP Ratio must stay below 1.5%.
  • By January 2026, the limit will tighten to 0.9%.

If your VAMP Ratio exceeds these limits, Visa may apply fines or other restrictions, making it crucial to keep this number low.

How VAMP Affects High-Risk Merchants

High-risk industries are more likely to face fraud and disputes because of the nature of their businesses. For example adult platforms may deal with unauthorized use of payment cards or CBD merchants often struggle with unclear regulations, leading to more disputes.

With VAMP, it’s essential for merchants to actively reduce fraud and manage chargebacks to stay compliant and avoid penalties.

Steps to Prepare for VAMP

Here’s how merchants can get ready:

1. Understand Your Current VAMP Ratio

• Contact your payment provider to get your fraud and chargeback data.
• Calculate your ratio: Add the number of TC40 fraud notifications and chargebacks, then divide by your total transactions.

2. Improve Business Practices

• Avoid low-value transactions: For example, a weekly subscription at $7.50 may lead to more disputes. Switching to a monthly plan at $30 reduces these risks.
• Be transparent with customers:
  • Use clear checkout pages that explain pricing.
  • Send reminders before charging recurring payments to reduce surprise disputes.

3. Use Dispute Resolution Programs

• Rapid Dispute Resolution (RDR): Automatically resolves disputes by issuing refunds before they escalate to chargebacks.
• Cardholder Dispute Resolution Network (CDRN): Provides a way to resolve disputes directly with customers.

Both tools help reduce chargeback rates by addressing disputes through RDR and CDRN before they escalate further.

4. Strengthen Fraud Prevention

• Use advanced fraud detection tools that fit your industry.
• Regularly review fraud trends and update your systems to block suspicious activity.

Real-World Examples

Example 1: A Gaming Merchant

A gaming company faced a high VAMP Ratio because of frequent weekly billing. They switched to monthly billing and added clearer terms to their checkout process. Within three months, their ratio dropped from 1.8% to 1.2%.

Example 2: An Adult Entertainment Platform

This platform dealt with a surge in fraud alerts. By using fraud prevention tools tailored to their audience and enrolling in RDR and CDRN, they reduced fraud notifications by 70% in six months.

How Vendo Supports Merchants

At Vendo, we make compliance with VAMP straightforward. Here’s how we help:

• Automatic Enrollment: All Vendo clients are enrolled in RDR and CDRN programs to reduce disputes.
• Chargeback Management: We handle chargebacks using advanced tools like Compelling Evidence 3.0 (CE3.0) to recover revenue efficiently.
• Transparent Reporting: Our tools give you a clear view of your VAMP Ratio so you can monitor your progress.
• Expert Guidance: Our team helps you implement best practices to stay compliant and avoid penalties.

Why VAMP Is an Opportunity

While VAMP introduces stricter rules, it also helps merchants build stronger businesses:

• Reduce fraud and disputes.
• Gain customer trust through better practices.
• Stay competitive in Visa’s ecosystem.

Let’s Get Started

Have questions? Want to learn how Vendo can guide your business through these changes? Contact us today to ensure you’re ready for VAMP.