Visa Fraud Monitoring Program (VFMP)

The Visa Fraud Monitoring Program (VFMP) is a pivotal initiative established by Visa to oversee and mitigate fraud activities within its network, particularly focusing on merchants. This program is part of Visa's broader effort to maintain a secure and trustworthy transaction environment by monitoring merchants who demonstrate higher levels of fraudulent transactions.

Under the VFMP, Visa continuously analyzes the fraud data associated with each merchant. If a merchant's fraud rates exceed predefined thresholds, they are automatically enrolled in the program. This enrollment is a signal that the merchant is experiencing an unusually high level of fraudulent activity and must take corrective actions to address the underlying issues.

Once a merchant is enrolled in the VFMP, they face significant repercussions. One of the most impactful is that liability for fraud-related chargebacks is automatically assigned to them, and they lose the ability to contest these chargebacks. This aspect of the program is designed to strongly incentivize merchants to implement more robust fraud prevention and detection practices.

Merchants affected by the VFMP are encouraged to review and enhance their transaction monitoring systems, adopt advanced security measures, and possibly revise their transaction and verification processes. Compliance with the VFMP is critical not only to reduce the incidence of fraud but also to avoid additional penalties or fines that Visa might impose on continuing non-compliance.

Overall, the Visa Fraud Monitoring Program serves as a vital tool in Visa's arsenal to combat payment fraud and protect both its merchant and customer bases from the adverse effects of these fraudulent activities.