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Mastercard has changed its fraud and chargeback merchant compliance programs
Mastercard has made crucial updates to its compliance programs globally, which also applies to some of Genome’s clients. Particularly, if you are a merchant from Europe, except for Germany, Switzerland, and Liechtenstein, this blog post is for you.
The updates involve the Excessive Fraud Merchant (EFM) and Excessive Chargeback Merchant (ECM) compliance programs. Let’s cover what the changes are about.
Number of Transactions
Fraud Chargeback(4837, 4863 reason codes) Amount
Fraud Chargeback Basis Points
3DS Utilization (including Data Only Tax)
1,000 or more
EUR/USD 50,000 or more
50 or more
• Less than 10% (Non-regulated Countries*) • Less than 50% (Regulated Countries)
Merchants’ compliance with the EFM is measured at the merchant ID (MID) level. The data and potential financial assessments are directed to the acquirer. The assessments revolve around the number of months above EFM thresholds. If you don’t comply for two months, you’ll have to pay a EUR 500 fine. Keep that in check, or the fines will skyrocket to EUR 100,000 for over 19 months of non-compliance.
Number of months Above EFM Thresholds
Violation Assessment
1
0
2
EUR 500
3
EUR 1,000
4 to 6
EUR 5,000
7 to 11
EUR 25,000
12 to 18
EUR 50,000
19+
EUR 100,000
The ECM allows acquirers to predict merchants’ chargeback risks: the merchants that get lots of chargeback monthly are also monitored on the merchant ID level. When the compliance threshold of a merchant is breached, Mastercard informs acquirers automatically.
The merchants fall under two categories: the Excessive Chargeback Merchant (at least 100 to 299 chargebacks a month) and High Excessive Chargeback Merchant (over 300 chargebacks a month).
EFM and HECM Monthly Criteria
Monthly Criteria
Number of Chargebacks
Basis Points
ECM
100 to 299
150 to 299
HECM
300 or more
300 or more
Europe Region Regulated Countries
Austria
Gibraltar
Netherlands
Belgium
Greece
Norway
Bulgaria
Hungary
Poland
Croatia
Iceland
Portugal
Cyprus
Ireland
Romania
Czech Republic
Italy
Slovakia
Denmark
Latvia
Slovenia
Estonia
Lithuania
Spain
Finland
Luxembourg
Sweden
France
Malta
United Kingdom
Non-Regulated Countries
Albania
Israel
Serbia
Andorra
Kazakhstan
Tajikistan
Armenia
Kosovo
Turkey
Azerbaijan
Kyrgyzstan
Turkmenistan
Belarus
Macedonia
Ukraine
Bosnia and Herzegovina
Moldova
Uzbekistan
Channel Islands
Montenegro
Vatican City
Georgia
Russian Federation
Isle of Man
San Marino
The United States is a non-regulated country.
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