Visa Dispute Monitoring Program (VDMP)

The Visa Dispute Monitoring Program (VDMP) is an initiative designed by Visa to manage and reduce the number of disputes or chargebacks that merchants face. This program is crucial in Visa's strategy to enhance the overall transaction quality and customer satisfaction across its payment network.

VDMP operates by continuously monitoring the chargeback ratios of merchants. Chargeback ratio is calculated based on the number of chargebacks received by a merchant relative to their total transaction volume. Visa sets specific thresholds for acceptable chargeback ratios — typically 0.9% for Visa and 1% for most other networks. These thresholds are intended to identify merchants whose chargeback levels suggest potential issues in their transaction processing or customer service practices.

When a merchant exceeds the predefined chargeback ratio threshold, they are automatically enrolled in the VDMP. Being part of this program has significant implications:

Merchants enrolled in VDMP are urged to take proactive measures to address the root causes of high chargeback rates. This might involve refining policies related to returns and refunds, enhancing product descriptions and customer expectations, or improving the visibility and responsiveness of customer service.

Overall, the Visa Dispute Monitoring Program aims to incentivize merchants to maintain healthy transaction practices and reduce the frequency of disputes, thereby improving the efficiency and security of the Visa payment ecosystem for all stakeholders involved.