Effective Date: April 1, 2025
Enforcement Start Date: July 1, 2025
Visa Inc. is undertaking a structural reform of its oversight mechanism named the Visa Acquirer Monitoring Program (VAMP), effective as of April 1, 2025, with the aim of preventing abuse within the digital payments ecosystem and preserving the integrity of the financial system. This new regulation consolidates the existing Visa Fraud Monitoring Program (VFMP) and Visa Dispute Monitoring Program (VDMP), aiming to monitor fraud and dispute transactions under a single framework. The new structure introduces a systematic and reciprocal compliance and supervision regime based on the performance indicators of both acquirers and merchants.
A New VAMP Ratio and Calculation Method: The Pursuit of Objectivity in Compliance
With this restructuring, Visa has adopted a simplified and singular ratio for compliance monitoring:
VAMP Ratio = (Fraud TC40 + Non-Fraud Disputes) / Total Settled Transactions
The components in this formula are defined as follows:
- TC40 (Fraud Reports): Refers to transactions reported as unauthorized by cardholders. These are fraud-flagged incidents submitted to Visa by banks under suspicion of fraud.
- Non-Fraud Disputes: Includes dispute cases not involving fraud but contested by the cardholder under Visa’s dispute reason codes. Key dispute codes include:
- Code 11 – Unauthorized Transaction: Transactions conducted without the cardholder’s consent.
- Code 12 – Processing Errors: Technical or accounting issues such as duplicate charges, incorrect amounts, or charges without completed transactions.
- Code 13 – Product/Service Issues: Contractual disputes involving non-delivery, defective goods, or dissatisfaction with service quality.
This unified ratio reflects both fraudulent activity and overall customer dissatisfaction within Visa’s risk monitoring system, aiming to holistically assess a merchant’s technical security and service quality.
If this ratio exceeds a predefined threshold, the merchant may be classified by Visa as an “Excessive Merchant” and be subject to sanctions.
While this method may appear objective, applying a uniform ratio without considering sectoral, business model, or product differences carries inherent risks.
Legal Obligations and Compliance Risks
a) Contractual Liabilities and Financial Consequences
Payment service agreements between merchants and acquirers often include performance-based provisions related to fraud rates, dispute frequencies, and PCI-DSS compliance. The new VAMP regime increases the risk of breaching these provisions, potentially resulting in termination, service suspension, or the imposition of penalty fees.
b) Shared Risk Perception in the Acquirer–Merchant Chain
Sanctions under the new system are not solely based on an individual merchant’s performance but also depend on the VAMP ratio of the affiliated acquirer. Thus, the performance of other merchants within an acquirer’s portfolio may indirectly impact a company. This creates a cascading liability risk, necessitating legal due diligence in acquirer selection.
c) Legal Uncertainty: Inclusion of RDR and CDRN Transactions
Visa’s technical documents at the beginning of 2025 indicated that disputes resolved at early stages through mechanisms such as Rapid Dispute Resolution (RDR), Cardholder Dispute Resolution Network (CDRN), and Compelling Evidence 3.0 would be excluded from the VAMP ratio. However, in updates published in March of the same year, Visa announced that transactions involving fraud reports resolved via RDR, as well as disputes entered into the CDRN system, would now be included in the VAMP ratio calculation.
This expansion demonstrates that Visa’s risk monitoring and dispute assessment system has become more comprehensive. Businesses must now place strategic emphasis not only on traditional chargeback rates but also on their performance within alternative resolution mechanisms.
This change signals that Visa dynamically updates its monitoring system, and relying on fixed parameters for long-term compliance planning may be insufficient. Hence, businesses must adopt a compliance strategy that is not only responsive to current rules but also agile and sustainable in adapting to regulatory developments.
d) Data Responsibility Under KVKK and GDPR
To calculate the VAMP ratio, various data elements are collected—including payment transactions, card movement data, reasons for disputes, and fraud identification. Accordingly, both merchants and acquirers act as data controllers under Turkey’s Law No. 6698 on the Protection of Personal Data (KVKK) and the EU General Data Protection Regulation (GDPR), and must ensure lawful data processing justifications. Particularly in TC40 reports, the use of cardholder-related data in fraud detection may constitute the processing of sensitive data and therefore requires extra caution.
Legal Compliance Strategies: Recommended Roadmap
- Contract Review: Reassess agreements with acquirers regarding commitments, termination clauses, and penalties related to VAMP ratios.
- Data Protection Compliance Planning: Clearly document policies addressing how TC40 and dispute data are processed in compliance with KVKK and GDPR, the legal bases for such processing, and applicable retention periods.
- Compliance Oversight Committee: Establish internal monitoring mechanisms with members from finance, legal, IT, and payments departments to analyze VAMP ratios on a monthly basis.
- Use of Technological Tools: Enhance infrastructure with advanced tools such as Forter, incorporating features like Predictive Payment Routing, GenAI insights, Abuse Prevention, and Intelligent Vault Management to support legal obligations through technology.
Conclusion and Evaluation
The restructured VAMP program introduced by Visa affects not only merchants’ operational efficiency but also their contractual liabilities, data governance policies, and strategic payment partnerships. Being classified as high-risk may lead to reputational harm, exclusion from payment networks, and potential regulatory scrutiny.
Thus, VAMP is not merely a metric, but a trigger for comprehensive organizational restructuring in financial, technical, and legal domains. Businesses should approach this new regime not with a mindset of “rapid adaptation,” but through a strategic compliance and continuous monitoring framework.