5 Key Questions to Ask Your Payment Processor About VAMP
In today’s payments landscape, the new Visa Acquirer Monitoring Program (VAMP) is raising the stakes for merchants and payment processors alike. Gone are the days when fraud, charge-backs and disputes were siloed; VAMP combines fraud and dispute metrics into one unified ratio, making oversight stricter and more consequential.
As a merchant, you might think: “Is this really my problem?” The answer: yes. Even if you have a clean charge-back record, your processor’s compliance (and your role in it) can impact your ability to accept payments, your costs, and your terms.
Here are five essential questions you should ask your payment processor right now, along with what to look for in their answers (and red flags to watch out for).
1. “What is my current VAMP ratio (TC40 + TC15 ÷ total CNP transactions) and how often is it reported to me?”
Why it matters:
Under VAMP, the ratio is calculated as: number of fraud reports (TC40) + number of disputes/chargebacks (TC15) divided by total settled card-not-present (CNP) transactions. You need to know your starting point. If your processor doesn’t provide this number (or isn’t tracking it), you’re flying blind.
What you want to hear:
- They give your current ratio (e.g., “we show 0.45% for your portfolio”).
- They provide historical trend (last 3–6 months).
- They commit to regular (weekly or monthly) reporting, with alerts when you approach thresholds.
Red flags:
- “We don’t calculate that at your merchant-level, only at the acquirer level.” That means you may lack visibility.
- We’ll tell you if you breach thresholds.” Too late — you want proactive visibility.
2. “Which specific fraud prevention, dispute-management and evidence tools do you provide and are they ‘built-in’ or optional add-ons?”
Why it matters:
Since VAMP raises liability for both acquirers and merchants, processors are under pressure to equip their merchants with robust tools.
Common tools: 3-D Secure 2.0, velocity controls, device-fingerprinting, AVS/CVV checks, Order Insight/Compelling Evidence (CE 3.0) dispute workflows.
What you want to hear:
- These tools are part of the standard offering (not buried behind expensive surcharges).
- They integrate with your existing systems (checkout, subscription, CRM).
- The processor provides training, dashboards and early-warning triggers (e.g., alerts when you hit 75% of threshold). (For example, one provider reported: “Reduced VAMP ratio from 0.8% → 0.3% in 90 days” by deploying these tools.)
Red flags:
- They say “we recommend third-party vendor X for fraud tools” and leave it to you to integrate and pay.
- They cannot show how the tools tie into VAMP metrics and reporting.
3. “If my ratio spikes (due to e.g., a fraud attack or charge-back wave) what is your escalation/mitigation plan and will you communicate with us early?”
Why it matters:
Processor portfolios that exceed VAMP thresholds face penalties, so processors will be quick to act — and may pass costs, reserves, or even termination downstream.
You need to know how your processor will keep you informed and supported (not leave you scrambling).
What you want to hear:
- They commit to notifying you when you reach a set % of threshold (e.g., 75 %) and outline steps: freeze certain transaction types, deploy extra fraud tools, review your account.
- They share a written “emergency playbook” that describes what they will do and what they expect from you.
- They will provide transparent communication: when they notify Visa, when a reserve is being triggered, what additional fees may apply.
Red flags:
- They don’t have a documented escalation playbook.
- They tell you “we’ll handle it if/when it happens” — vague.
- They imply once you’re flagged you’ll have no recourse — that means you have little control.
4. “What are your internal thresholds (portfolio-wide and merchant-specific) that you monitor — and how do they compare to Visa’s published limits?”
Why it matters:
Visa has published thresholds, but many acquirers and processors impose stricter internal limits (because the acquirer is accountable) which affect your terms, reserves, or termination risk.
For example: Advisory period ends October 1 2025, merchant threshold begins at 2.2% and phases toward 1.5% by April 2026 in some regions.
What you want to hear:
- They share both the Visa published threshold and their internal limit (e.g., “we monitor when you hit 1.0% even though Visa’s published is 1.5%”).
- They show how your merchant segment (industry, geography, volume) affects your “target limit”.
- They explain what happens once you exceed their internal threshold (e.g., rate increase, reserve, review, termination).
Red flags:
- They say “we just follow Visa” but won’t share internal limits.
- Their internal limit is so low it gives you almost no buffer (e.g., 0.5% when Visa’s is 1.5%) without adequate tools/support.
5. “How do you support our ongoing compliance and improvement (not just avoiding penalties) — can you help us turn VAMP into a competitive advantage?”
Why it matters:
VAMP is not just about avoiding fines — if you stay well below thresholds, you may negotiate better rates, fewer reserve requirements, and present your business as lower risk. The case study (below) shows improvement delivering business benefit.
What you want to hear:
- They provide monthly/quarterly benchmarking reports: “Your ratio is trending here, others in your industry are at X%”.
- They offer proactive optimization: “Here are actions you can take to reduce your ratio further” (billing descriptor clarity, subscription-reminder emails, smarter routing of transactions, international fraud filters).
- They support you in turning under-threshold performance into tangible outcomes: lower fees, more favorable pricing, faster funding.
Red flags:
- The processor’s approach is purely reactive (“we’ll tell you when you breach”).
- No benchmarking or improvement plan is offered.
Case Study: E-commerce Merchant Cuts VAMP Ratio from 0.8% to 0.3% in 90 Days
Here’s a real-world example that illustrates how the above questions translate into action and results.
Merchant profile:
A high-volume e-commerce retailer processed primarily card-not-present (CNP) transactions. They were facing a modest but increasingly risky VAMP ratio of 0.8 %. They engaged a payments / processor platform (Inovio Payments) that offered integrated fraud-prevention, real-time monitoring, and escalation tools.
Actions taken:
- The merchant and processor implemented real-time dashboards and alerts for early-warning triggers.
- They enabled advanced fraud tools (3-D Secure, velocity checks, device fingerprinting) and integrated dispute-prevention workflows (Order Insight, CE 3.0 evidence capture).
- They improved customer experience and dispute prevention: clearer billing descriptors, proactive notification to customers, streamlined refund/cancellation process.
- They agreed weekly monitoring of their VAMP ratio and had an emergency protocol if they approached thresholds.
Results:
- Within 90 days, they reduced their VAMP ratio from 0.8% → 0.3%.
- As a result, they avoided potential annual fines and penalties (estimated at $30,000 according to the case) and were able to negotiate improved processing terms.
- Their improved ratio also positioned them as a lower-risk merchant, giving them operational leverage for growth.
Why it matters for you as a merchant:
- It shows the performance upside — better ratio = cost savings, smoother processing, better terms.
- It proves that with the right processor partner (with tools, monitoring, communication) you can actively manage VAMP risk, not just react to it.
- It underscores: don’t wait until you’re flagged — reducing risk now builds value.
Final Thoughts & Action Steps
VAMP isn’t a distant regulatory headache — it’s happening now (advisory period active, enforcement looming) and your payment processor relationship is a key factor.
By asking the five questions above, you’ll get clarity, ownership and leverage. Here are your next steps:
- Schedule a meeting with your payment processing partner. Bring the five questions above as your agenda.
- Pull your baseline numbers: What is your current TC40 + TC15 count? What is the denominator (total CNP transactions)? Calculate your ratio.
- Build a dashboard: Weekly/bi-weekly alerts for when you reach certain % of your processor’s internal threshold (e.g., 75 %).
- Map your fraud-/dispute-prevention toolkit: Which tools do you currently use? What gaps exist?
- Create an escalation plan: What happens if you hit a spike due to external fraud? Who at your processor will coordinate? What actions will you both take?
- Turn compliance into advantage: If you can keep your ratio well under threshold for 3-6 months, ask your processor what improved terms you can negotiate.
By doing this, you’re not just playing defense, you’re positioning your business for smoother operations, lower risk, better terms and faster growth.
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