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Chargeback ratio thresholds in 2026: Visa VAMP and Mastercard

By David Ruderman

Last updated October 12, 2026

For US Visa card-not-present merchants, the line since April 1, 2026 is a VAMP ratio of 1.5%: fraud reports plus disputes, divided by settled transactions, with at least 1,500 of them in the month. Mastercard's Excessive Chargeback program starts at 100 chargebacks and 1.5%. Processors act much earlier, because Visa starts flagging their whole portfolio at 0.5%.

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What chargeback ratio is too high in 2026?

At the networks, 1.5% for both Visa (with 1,500+ events) and Mastercard (with 100+ chargebacks). At your processor, much lower. The full picture:

Program Threshold Source
Visa VAMP, merchant "Excessive" (US, Canada, EU, AP; card-not-present) VAMP ratio ≥1.5% (150 bps) and ≥1,500 fraud reports + disputes in the month. Was 2.2% before Apr 1, 2026. Latin America is also 1.5%; CEMEA stays at 2.2% with lower minimums. Merchant thresholds apply when the acquiring bank itself isn't flagged Visa VAMP fact sheet
Visa VAMP, acquiring bank portfolio "Above Standard" at ≥0.5%, "Excessive" at ≥0.7% Visa VAMP fact sheet
Mastercard ECM (Excessive Chargeback Merchant) 100–299 chargebacks and a 150–299 bps (1.5–2.99%) ratio in a month Mastercard ECM FAQ
Mastercard HECM (High Excessive) 300+ chargebacks and 3%+ Mastercard ECM FAQ
MATCH code 04 (terminated-merchant file) Chargebacks over 3 months above 1.5% of sales transactions and ≥US$5,000 Mastercard SPME §11.14.1
FTC Paddle order (one processor's court order) "High-Chargeback Client": in any 2 of the past 6 months, over 0.9% and more than 75 chargebacks in a month FTC v. Paddle order

You'll still see older Visa numbers quoted online. Visa folded its earlier dispute and fraud monitoring programs (VDMP and VFMP) into VAMP, which started June 1, 2025 (Visa VAMP fact sheet). Use the table above.

Why did my processor flag me under 1.5%?

Because your processor is measured too, at a much lower line. Visa measures the acquiring bank's whole portfolio, and flags an acquiring bank as "Above Standard" from 0.5% and "Excessive" from 0.7% (Visa VAMP fact sheet). A bank with a portfolio of high-risk merchants can't let any one of them run near 1.5%. So the line that matters for you is your processor's internal one, which is lower and usually not published. Ask for it.

How do I calculate my chargeback ratio?

Visa divides fraud reports plus disputes by settled transactions in the same month; Mastercard divides this month's chargebacks by last month's transactions.

Visa VAMP counts events, not dollars:

VAMP ratio = (fraud reports [TC40] + disputes [TC15]) ÷ settled transactions [TC05], per month (Visa VAMP fact sheet)

A single sale that gets both a fraud report and a dispute counts twice. The fact sheet excludes disputes resolved through pre-dispute solutions, and fraud reports (TC40s) that qualify for Compelling Evidence 3.0 (Visa VAMP fact sheet).

Example (arithmetic, not a Visa example): 100,000 settled Visa transactions, 1,000 fraud reports, 700 disputes → (1,000 + 700) ÷ 100,000 = 1.7%, and 1,700 events clears the 1,500 minimum. Excessive.

Small merchant: 2,000 transactions, 60 disputes → 3.0%, but only 60 events, so not "Excessive" under Visa's merchant minimum. Your processor will still act on it.

Mastercard ECM uses a lagged denominator:

Chargebacks this calendar month ÷ Mastercard transactions in the preceding month × 10,000, in basis points (Mastercard SPME §8.3.1)

A month with falling sales inflates your ratio even if chargebacks stay flat. And Mastercard counts all first-presentment chargebacks: winning one later doesn't remove it from the count (Mastercard AN 2968).

What happens if I go over?

Fees and fines passed to you, months in a monitoring program, a bigger reserve, and possibly termination and MATCH.

  • Fees and fines passed through. Mastercard's HECM tier adds a US$5 issuer recovery assessment per chargeback over 300 (Mastercard ECM FAQ). Stripe's terms let it pass network fines to you (Stripe Service Terms), and most merchant agreements do the same.
  • Slow exit. Once in ECM, a merchant stays until it has three consecutive months below the thresholds (Mastercard AN 2968).
  • It follows you. Merchants identified in a Visa risk program, or with violations in the prior 3 years, can't use certain payment-facilitator exceptions (Visa Core Rules §5.3.1.4 and §1.5.1.1, Apr 18, 2026).
  • Termination and MATCH. Excessive chargebacks (over 1.5% across the previous three months and at least US$5,000) are MATCH reason code 04, and that listing lasts five years. → MATCH list
  • Bigger reserves. → Rolling reserves

What chargeback ratio will a new bank accept?

There's no published number; each bank sets its own appetite. What helps: a recent history comfortably below the network lines, a trend that's improving, and evidence of what you changed. Merchants know the stakes: "The part that actually costs you long term isn't the 60 EUR, it's your dispute rate." (r/stripe). Bring your monthly ratios to the application. → High-risk merchant account requirements

How do I bring my chargeback ratio down?

Make charges recognizable, ship before you charge, refund fast, and fight fraud disputes with evidence. Legitimately:

  1. Make the descriptor recognizable. Customers dispute charges they don't recognize.
  2. Ship before you charge. Visa tells card-absent merchants not to deposit until they've shipped (Visa Dispute Management Guidelines).
  3. Refund fast when asked. A refund isn't a dispute.
  4. Use pre-dispute tools so cases resolved before they become disputes drop out of the VAMP count (Visa VAMP fact sheet). Fix the cause too: the FTC's Paddle order bans using prevented-chargeback services without assessing the cause of the chargebacks (FTC v. Paddle order).
  5. Submit Compelling Evidence 3.0 on fraud disputes from repeat customers. Visa's guidelines count two or more prior undisputed transactions settled 120 to 365 days before the dispute that share at least two data elements, such as device ID, device fingerprint or IP address (Visa Dispute Management Guidelines). Visa's rule update expands CE3.0 effective October 24, 2026 (Visa Core Rules, Summary of Changes).
  6. Authenticate with 3-D Secure on risky orders. Visa Secure authentication gives protection from fraud-related disputes (Visa Dispute Management Guidelines).
  7. Recurring billing: separate, clear terms (Mastercard Chargeback Guide) a simple online cancellation, and a notice at least 7 days before a trial ends (Visa Core Rules §5.8.11.1, Table 5-21).

What gets merchants in more trouble?

Anything that hides the ratio instead of lowering it.

  • Split volume across accounts or descriptors to stay under thresholds. The FTC banned this "load balancing" in its Paddle order (FTC) and cited it against Nuvei (FTC v. Nuvei complaint) and Humboldt (FTC v. 5967 Ventures complaint).
  • Open a new company for a fresh account. The Paddle order bans using shell companies to get more merchant accounts.
  • Alter transaction data to dodge monitoring. Visa can charge USD 25,000 a month and permanently disqualify merchants for circumventing its monitoring programs (Visa Core Rules §12.5.3.2).
  • Count on winning disputes to fix the ratio. Wins recover money; they don't remove the chargeback from Mastercard's count.

Already shut down over chargebacks? → Stripe closed my account · High-risk merchant account requirements

How Break Free Finance helps

We don't process payments. We connect high-risk businesses (RUO peptides, supplements, gaming) with banks that underwrite what they actually sell, drawing on decades of relationships with 40+ financial institutions and solution providers, and we help build a file those banks will review. Tell us what you sell. We'll tell you straight whether we know a bank for it. Every account is subject to the bank's underwriting; no approval is guaranteed.

Sources (last checked October 10, 2026)

General information, not legal or compliance advice.

Sources

What this means for your file

The facts above are what an underwriter can check. We use them to build the file and place it with an acquiring bank that already takes the MCC. The bank still decides.

How a file gets in front of an underwriter →

Related

Questions

What chargeback ratio is too high for Visa?

In the US, Canada, EU and Asia-Pacific, Visa's VAMP program flags card-not-present merchants at a ratio of 1.5% or more with at least 1,500 fraud reports plus disputes in the month. The threshold dropped from 2.2% on April 1, 2026.

What chargeback ratio is too high for Mastercard?

Mastercard's Excessive Chargeback Merchant program starts at 100 chargebacks and a 1.5% ratio in a month. High Excessive starts at 300 chargebacks and 3%. A merchant must exceed both the count and the ratio.

How is the Visa VAMP ratio calculated?

Count of fraud reports (TC40) plus disputes (TC15), divided by the count of settled transactions (TC05) in the month. One sale can count twice if it gets both a fraud report and a dispute.

Do chargebacks I win still count?

For Mastercard's program, yes: it counts first-presentment chargebacks, and winning one later doesn't remove it. For Visa VAMP, disputes resolved through pre-dispute solutions and fraud reports that qualify for Compelling Evidence 3.0 are excluded.

What chargeback rate gets you on the MATCH list?

Reason code 04 applies when chargebacks over the previous three months exceeded 1.5% of sales transactions in that month and totaled at least $5,000. A MATCH listing lasts five years.

Is 1% chargeback rate bad?

It's under both networks' merchant lines but above the 0.5% level where Visa starts flagging an acquiring bank's whole portfolio. Expect your processor to treat it as a warning, and ask for its internal threshold.

How long does it take to get out of a chargeback monitoring program?

For Mastercard's Excessive Chargeback program, three consecutive months below the thresholds. One good month isn't enough.