Payments & Fraud · Reference
Payments Fraud & Chargeback Glossary
The terms that decide whether a subscription app keeps its merchant account — defined plainly, with the current thresholds, and linked to the deep guide for each. If you're staring at a notice from your processor, start here.
Card-network monitoring programs
- Mastercard ECM — Excessive Chargeback Merchant 100 CBs + 1.5%
- Mastercard's monitoring tier, triggered when a merchant exceeds both 100 chargebacks and a 1.5% chargeback-to-transaction ratio in a calendar month. It brings escalating monthly fines and processor scrutiny, and — if unresolved — account termination and MATCH listing. How to exit ECM →
- Mastercard ECP — Excessive Chargeback Program 100 CBs + 1.0%
- The earlier Mastercard tier, triggered at 100 chargebacks and a 1.0% ratio. Treat it as the early-warning line — the time to act is here, not at ECM. Threshold reference →
- Visa VAMP — Visa Acquirer Monitoring Program 0.30% / 0.90%
- Visa's monitoring program (effective 2025) that merged the legacy VDMP and VFMP into a single combined fraud-and-dispute ratio, with a 0.30% Above-Standard threshold and a 0.90% Excessive threshold. Because the ratio combines fraud and disputes, many subscription apps hit VAMP before Mastercard's ECM. VAMP explained →
- VDMP — Visa Dispute Monitoring Program legacy
- Visa's former dispute-ratio program, now folded into VAMP. You'll still see the acronym in older processor documentation. How VAMP replaced it →
- VFMP — Visa Fraud Monitoring Program legacy
- Visa's former fraud-ratio program, also consolidated into VAMP's combined ratio. VAMP guide →
- MATCH list — Member Alert to Control High-risk Merchants ~5 years
- Mastercard's database of terminated merchants. A listing is typically visible to acquirers for five years and makes obtaining a new merchant account extremely difficult — it's the outcome every remediation program is built to avoid. The full program landscape →
Core concepts
- Chargeback ratio
- A merchant's chargebacks divided by transactions in a period, measured per card network, per calendar month. It's the number every monitoring program watches — and Visa and Mastercard count it differently, which is why you track both. Model your live ratios →
- Friendly fraud (first-party fraud)
- A chargeback where a legitimate cardholder disputes a charge they actually authorized — classically, forgetting a subscription and disputing the renewal instead of cancelling. No fraud-scoring model catches it, because the original transaction was genuine; you fix it with billing clarity and dispute interception, not stricter rules.
- Chargeback vs. refund
- A refund is initiated by the merchant; a chargeback is initiated by the cardholder's bank and counts against your ratio. The whole point of dispute interception is to convert a would-be chargeback into a refund before it posts.
- Representment
- Contesting a chargeback by submitting compelling evidence to the issuer to recover the funds. Effective for genuine fraud or service disputes; rarely worth it for clear-cut friendly fraud.
- Acquirer vs. issuer
- The acquirer is your bank/processor — accountable to the networks for your chargeback performance and the one who offboards you if it stays high. The issuer is the cardholder's bank, which decides disputes and can take on liability when 3DS is used.
Tools & controls
- Dispute interception (Ethoca, Verifi / RDR)
- Pre-chargeback alert networks that notify you of a dispute before it becomes a formal chargeback, so you can refund proactively and keep it off your ratio. Most subscription apps approaching VAMP or ECM need both networks, not one. Ethoca vs. Verifi →
- Stripe Radar
- Stripe's built-in fraud tool combining ML risk scoring with merchant-authored rules to allow, review, or block payments. Its defaults are tuned for general e-commerce, not subscription apps — which is where most calibration work lives. Rules that actually reduce chargebacks →
- 3-D Secure (3DS)
- An authentication step (often a one-time passcode) that verifies the cardholder and can shift fraud-chargeback liability to the issuer. Used as dynamic, risk-based gating rather than on every transaction, to avoid crushing conversion.
Staring at an ECM or VAMP notice?
I've taken a subscription app from a 13% chargeback rate to under 1% and out of Mastercard ECM. If you're approaching a threshold, let's talk before the fines escalate.
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