Chris Marchand
In today’s fast-changing and often uncertain world, managing risk has never been more important. In payments, when fraud and disputes are minimized, merchants can improve their authorization rates, reduce broader risk, and inspire customer confidence—a win for everyone.
To help acquirers proactively manage these types of risk in the evolving landscape, Visa has recently updated the Visa Acquirer Monitoring Program (VAMP). The program’s goal is to deter and correct fraudulent or compromising business practices, helping the other players in the payments ecosystem to manage their portfolios and reduce excessive risk.
But what exactly is VAMP, and why is it important for everyone in payments to understand?
The purpose of VAMP
VAMP, as highlighted in our recent webinar , was designed to proactively address risk within the payments ecosystem before it escalates. All aspects of the payments system are increasingly interconnected between themselves and other parts of the economy, so fraud, chargebacks, and compliance issues that seem isolated can quickly spiral into broader threats. Visa has redesigned VAMP to be an early warning and intervention system.
Who is impacted by VAMP?
While VAMP applies directly to acquirers, its effects can be felt throughout the payment system. Acquirers’ portfolios are made up of merchants, ISOs, and PayFacs, and the acquirer is responsible for monitoring their behavior. If one of these players takes on excessive risk, the acquirer is accountable.
Key components of VAMP
VAMP monitors a large amount of payments data, looking at metrics like chargeback-to-sales ratios, fraud-to-sales ratios, and transaction patterns. Visa sets specific thresholds for some of these metrics in VAMP; when these thresholds are crossed by an entity in the acquirer’s portfolio, the acquirer is sent an alert so they can work with them to reduce fraud and disputes. The program is designed not just to monitor, but to offer solutions that help improve risk mitigation.
Why VAMP matters
If left unchecked, risky activity can harm all the players in the payment ecosystem and result in fines, increased scrutiny, or even loss of processing privileges. Excessive fraud and risk can reduce authorizations and approvals as well as lower revenue for merchants and other players. This can disrupt the payment experience for consumers and potentially reduce their future spending.
VAMP allows acquirers to identify and address risk early, strengthening trust between all participants. When merchants proactively address significant disputes, they can improve their brand reputation, boost their bottom line, develop better relationships with customers, and decrease their costs.
Understanding VAMP is the first step toward a safer, more resilient payments environment. In our next blog, we’ll dig deeper into how VAMP works and what criteria Visa uses to monitor acquirers. In the meantime, explore how VAMP can help your business start proactively managing risk in our recent webinar.