Mastercard has changed its fraud and chargeback merchant compliance programs

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 TransactionsFraud Chargeback(4837, 4863 reason codes) AmountFraud Chargeback
Basis Points
3DS Utilization
(including Data Only Tax)
1,000 or moreEUR/USD 50,000 or more50 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 ThresholdsViolation Assessment
2EUR 500
3EUR 1,000
4 to 6EUR 5,000
7 to 11EUR 25,000
12 to 18EUR 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 CriteriaNumber of ChargebacksBasis Points
ECM100 to 299150 to 299
HECM300 or more300 or more

Europe Region
Regulated Countries

Czech RepublicItalySlovakia
FranceMaltaUnited Kingdom

Non-Regulated Countries

Bosnia and HerzegovinaMoldovaUzbekistan
Channel IslandsMontenegroVatican City
GeorgiaRussian Federation
Isle of ManSan Marino

The United States is a non-regulated country.