Chargeback Ratio: How Visa and Mastercard Calculate It, With a Worked Example

The table gives the formula and the level at which each program starts to apply to a merchant. The Visa row comes from Visa's own fact sheet. The Mastercard row comes from Stripe's documentation of the Mastercard program, because we could not open Mastercard's rules directly.

Thresholds are stated in basis points in Visa's document. One hundred basis points is 1%, so 150 basis points is 1.5%.

Every version of the ratio is a count over a count. It is a count of disputes, with no weighting by dollar value in the main Visa and Mastercard measures. A 12 dollar dispute and a 1,200 dollar dispute each add one to the numerator.

The part that changes between programs is which events go on top and which month goes underneath. Stripe's documentation says both networks assign a dispute or fraud report to the month in which they received it, regardless of when the original payment happened.

That matters for subscriptions. Card networks typically allow a cardholder to dispute within 120 days of the payment, according to Stripe, so a month's numerator is made up mostly of charges from earlier months.

Visa's 2025 fact sheet describes VAMP as one global program that replaced the earlier acquirer program, the Visa Fraud Monitoring Program and the Visa Dispute Monitoring Program. The updated thresholds took effect on 1 June 2025 and the advisory period ended on 30 September 2025.

The fact sheet describes the ratio as covering fraud and disputes on card-not-present transactions. It sets an acquirer's portfolio at Above Standard at 50 basis points and Excessive at 70 basis points. Where the acquirer is below those levels, an individual merchant is identified as excessive at 220 basis points, reduced to 150 basis points on 1 April 2026 in Asia-Pacific, Canada, the EU and the US. The merchant must also have 1,500 or more fraud reports and disputes in the month.

Two exclusions are written into the fact sheet. Disputes resolved through pre-dispute solutions are left out, and so are TC40 fraud reports that qualified for Compelling Evidence 3.0. Both exclusions depend on the timing of Visa's data extract.

Stripe's documentation adds a point that surprises people. The same fraudulent transaction can appear in both the TC40 report and the TC15 report, and when it does it is counted twice. Stripe also describes the denominator as all captured payments, where Visa's fact sheet speaks of card-not-present transactions. Ask your acquirer which count it reports for you.

Stripe's example is direct. The February calculation uses payments captured in January and chargebacks raised in February, including chargebacks on payments that were themselves captured in February.

A merchant enters the Excessive Chargeback Program only when it meets both the count and the rate in the same month. The first level, Excessive Chargeback Merchant, is 100 to 299 chargebacks and a rate of 1.5% to 2.99%. The second, High Excessive Chargeback Merchant, is 300 or more chargebacks and 3%.

Stripe lists the fines by the number of months above the threshold. They begin in the second month. Stripe says Mastercard removes a merchant from the program after three consecutive months below the threshold.

The figures below are invented for illustration. They describe a subscription seller with a card mix that happens to be weak on Mastercard in one month.

On Visa, the seller settles 40,000 card-not-present transactions in March. It receives 180 disputes and 90 fraud reports that month. Thirty of the fraud reports relate to transactions that were also disputed, and those still count in both places. The VAMP ratio is 270 divided by 40,000, which is 0.675% or 67.5 basis points. That is under 150 basis points, and 270 is well under the 1,500 count.

On Mastercard, the seller captured 7,500 payments in February and receives 120 chargebacks in March. The rate is 120 divided by 7,500, which is 1.6%. Both Mastercard conditions are met: at least 100 chargebacks and at least 1.5%. If February had been a normal month of 9,000 payments, the rate would have been 1.33%.

Stripe shows two figures. Dispute activity is disputes over successful payments by dispute date. Dispute rate is disputes over successful payments by charge date. Stripe's example is a week with 1,000 payments and 10 disputes, of which 3 relate to that week's payments: activity is 1% and rate is 0.3%. Stripe says the network monitoring programs use the activity calculation.

Stripe also says some disputes where the merchant has no liability do not appear in the Dashboard or the API, yet the monitoring programs still include them. Its examples are a payment refunded before the customer disputed it, a duplicate of a dispute already resolved, and a dispute the network created in error. Heavy refunders see the largest gap.

Account structure is a third cause. Stripe explains that Visa identifies an account by the static part of the statement descriptor and the acquiring bank, so one business can be several monitored accounts, or several regions can be combined into one.

For a manual estimate, Stripe suggests counting payments by capture date and disputes by creation date. For accounts in the US it suggests counting disputes from the 5th of the month to the 5th of the next, to allow for a reporting delay.

The list below is drawn from Stripe's monitoring-program documentation and Visa's fact sheet. It describes how those two sources say the counting works. Your acquirer's reporting is the place to confirm how your own account is counted.

• A dispute you later win still counts. Stripe says monitoring programs do not consider outcomes.
• A refund issued before a dispute does not remove the dispute from the network count.
• An early fraud warning is counted by Visa under VAMP even when no dispute follows.
• An inquiry or retrieval that is never escalated to a chargeback is not counted as a dispute.
• Disputes resolved through pre-dispute products are excluded from the VAMP count, subject to timing.
• TC40 fraud that qualified for Compelling Evidence 3.0 is excluded from the VAMP count, subject to timing.
• Mastercard counts a chargeback regardless of liability shift, according to Stripe.

There is no single line. Visa's excessive merchant level in the US has been 150 basis points since 1 April 2026, with the 1,500 event minimum. Mastercard's first level is 1.5% with 100 chargebacks. A small seller can sit above the percentage and below the count.

Stripe's documentation also lists a lower Visa level it calls non-compliant, at a ratio of 0.5%, and says Visa may assess fees there. Vendor sources report a per-event fee of about 8 dollars for merchants at the excessive level, charged to the acquirer and passed on. We found that figure in vendor blogs. Visa's fact sheet does not state a fee.

A processor can act before any network threshold. Stripe says a sudden spike or a steep upward trend can lead to action before dispute activity reaches 0.75%. The practical reading is that the network thresholds are an outer limit and the acquirer's own tolerance usually sits inside it.