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Visa

Visa is the world's largest card network. They don't issue cards, they don't provide merchant accounts, and they don't process your payments. They set the rules, operate the network that connects banks, and fine you when you break their rules.

Understanding what Visa controls vs what your processor controls matters when you're trying to fix problems.

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What Visa Actually Does​

Visa is NOT:

  • Your processor (that's Stripe, Square, etc.)
  • Your acquirer (that's your merchant account bank)
  • An issuer (that's Chase, Bank of America, Capital One, etc.)

Visa IS:

  • The network connecting issuers and acquirers
  • The rule-maker for how Visa-branded cards work
  • The enforcer when merchants or banks break rules
  • The arbitrator in complex disputes

What this means: You never talk to Visa directly. Everything goes through your processor/acquirer.

Visa's Rules That Matter to Merchants​

1. Chargeback Monitoring Programs​

Visa runs two programs to monitor merchant chargeback ratios:

ProgramThresholdConsequences
VDMP (Visa Dispute Monitoring Program)0.65% ratio + 75 disputes/monthEarly warning, processor must report
VAMP (Visa Fraud Monitoring Program)0.9% ratio + 100 fraud disputes/monthFines start ($25K-$100K/month)
VFMP (Visa Fraud Monitoring Program - Excessive)1.8% ratio + 1,000 fraud disputes/monthMassive fines, termination likely

Timeframe: Rolling 1-month calculation

How it works:

  1. Your processor reports your ratios to Visa monthly
  2. If you breach, Visa fines your processor
  3. Your processor passes fines to you (or terminates you)
  4. Three consecutive months in a program = mandatory remediation plan

See: Chargeback Monitoring Programs and Zero Point Nine Panic for prevention.

2. Reason Code System​

Visa uses a 2-digit reason code format:

Code RangeCategoryExamples
10.xFraud10.4 (CNP fraud), 10.5 (Fraud Monitoring Program)
11.xAuthorization11.1 (Card Recovery Bulletin), 11.2 (Declined auth)
12.xProcessing errors12.1 (Late presentment), 12.6 (Duplicate)
13.xConsumer disputes13.1 (Not received), 13.2 (Cancelled recurring)

Full breakdown: Visa Reason Codes

3. Response Timeframes​

ActionTimeframe
Representment response30 days
Pre-arbitration response30 days
Arbitration filing10 days

Miss these and you auto-lose.

4. Compelling Evidence 3.0​

Visa's CE 3.0 program lets you win fraud disputes with historical evidence:

Requirements:

  • 2+ prior undisputed transactions on same card
  • 120-365 days before disputed transaction
  • 2+ matching elements: device ID, IP, shipping address, account

Win rate: 70-85% when CE 3.0 qualifies (vs 15-25% without)

See: Compelling Evidence 3.0

Visa Network Fees (You Pay These)​

Visa charges network assessment fees on every transaction:

Fee TypeRateWhen Charged
Assessment fee0.14%All Visa transactions
Network fee (credit)0.13%Credit cards
Network fee (debit)0.05%Debit cards (unregulated)
International fee1.0%Cross-border transactions
APF (Acquirer Processing Fee)$0.0195Per transaction

These are non-negotiable. Every merchant pays them (usually hidden in your processor's rate).

Total network fees: ~0.15-0.30% depending on card type and geography.

When Visa Intervenes Directly​

Visa steps in when:

1. Excessive Chargebacks​

VAMP breach (0.9% + 100/month):

  • Visa fines your processor $25K-$100K/month
  • Processor passes cost to you or terminates
  • Required remediation plan
  • Monthly reporting to Visa

Three months in VAMP:

  • Visa may require direct communication
  • Processor must submit action plan
  • If no improvement = MATCH listing likely

2. Fraud Clusters​

Common Point of Purchase (CPP):

  • Multiple fraud complaints trace to your location
  • Visa investigates directly
  • Forensic examination may be required
  • Can lead to MATCH listing (code 02)

3. Rule Violations​

Visa fines for:

  • Surcharging violations
  • Incorrect MCCs
  • Late presentment
  • Incorrect transaction codes

Fines: $10K-$100K+ per violation

4. Arbitration​

If you and the issuer can't resolve a dispute:

  • Either party can escalate to Visa arbitration
  • Visa makes final decision
  • Loser pays arbitration fee ($500-$1,000) + the dispute amount
  • Visa's decision is binding

When this happens: Rarely. Under 1% of chargebacks reach arbitration.

Visa vs Mastercard: Key Differences​

FactorVisaMastercard
Market share (US)~50%~25%
Chargeback threshold0.9% + 100/month1.0% + 100/month
Response timeframe30 days45 days
Reason code format10.4, 13.1 (2-digit)4837, 4853 (4-digit)
Monitoring programsVDMP/VAMPECM/HECM
Compelling EvidenceCE 3.0 (strong program)Similar but less documented
ArbitrationVisa decidesMastercard decides

For merchants: Visa has stricter thresholds (0.9% vs 1.0%) but longer response windows (30 vs 45 days for MC).

Visa's Core Programs​

Visa Dispute Monitoring Program (VDMP)​

Trigger: 0.65% ratio + 75 disputes/month

Consequences:

  • Early warning (no fines yet)
  • Processor must report you to Visa
  • Required to monitor closely
  • If you hit 0.9%, you enter VAMP

This is your warning shot. Fix it before 0.9%.

Visa Fraud Monitoring Program (VFMP)​

Standard tier: 0.9% fraud ratio + 100 fraud disputes/month

Consequences:

  • $25K-$50K fines per month (passed to you)
  • Required remediation plan
  • Monthly Visa reporting
  • Three months = potential MATCH listing

Excessive tier: 1.8% fraud ratio + 1,000 fraud disputes/month

  • Fines: $100K+/month
  • Termination highly likely

Visa Integrity Risk Program (VIRP)​

Monitors rule violations:

  • Surcharging violations
  • MCC misclassification
  • Processing violations

Fines: $10K-$100K per violation

Test to Run​

Visa compliance health check:

Week 1: Check your ratios

  1. Calculate current chargeback ratio (all Visa disputes)
  2. Calculate fraud ratio (10.x code disputes only)
  3. Compare to thresholds:
    • Under 0.65%: Healthy
    • 0.65-0.9%: Warning zone (in VDMP)
    • Over 0.9%: Crisis (in VAMP)

Week 2: Review reason codes 4. Pull last 50 Visa disputes 5. Count by reason code (10.4, 13.1, 13.2, etc.) 6. Identify your top 3 codes

Week 3: Evidence audit 7. For top 3 codes, check if you have required evidence 8. Code 10.4 (fraud): Do you have 3DS? Device matching? 9. Code 13.1 (not received): Do you have tracking + signature? 10. Fix evidence gaps before next dispute

Success criteria: Ratio under 0.65%, evidence collection in place for top 3 codes.

Scale Callouts​

Under $100K/month:

  • Unlikely to hit Visa's count thresholds (75-100 disputes)
  • Focus on keeping ratio under 0.5%
  • VDMP/VAMP aren't immediate concerns

$100K-$1M/month:

  • Can hit both ratio and count thresholds
  • Monitor weekly, not monthly
  • Set internal alarm at 0.6% ratio

Over $1M/month:

  • High risk of VAMP if fraud prevention isn't strong
  • Implement chargeback alerts (RDR)
  • Consider chargeback guarantee services

Over $10M/month:

  • VFMP Excessive (1.8%) becomes the threat
  • Must have dedicated fraud/chargeback team
  • Network relationships matter (through processor)

Where This Breaks​

  1. Visa rules override your processor: Your processor may say you can do something, but if Visa's rules prohibit it, Visa wins. Always verify network rules for important decisions.

  2. Visa doesn't care about your story: You can have a great explanation for why chargebacks spiked. Visa's programs are algorithmic. Over threshold = fines.

  3. Visa timelines are strict: 30-day response windows are firm. Weekends and holidays count. Plan for this.

  4. Visa won't talk to you directly: All communication goes through your processor/acquirer. If your processor has a bad relationship with Visa, you suffer.

  5. Arbitration is expensive and binding: Filing for arbitration costs $500-$1,000. If you lose, you pay that plus the dispute amount. Visa's decision is final.

Next Steps​

Monitoring Visa programs?

  1. Chargeback Monitoring Thresholds - VDMP/VAMP details
  2. Network Programs Reference - All programs
  3. Zero Point Nine Panic - Crisis response

Understanding Visa dispute rules?

  1. Visa Reason Codes - All 20+ codes
  2. Compelling Evidence 3.0 - CE 3.0 details
  3. Representment - Fighting Visa disputes

Comparing networks?

  1. Mastercard - Visa's main competitor
  2. American Express - Closed-loop network
  3. Discover - Smaller US network

See Also​