Chargeback ratio
Disputes & risk
Total chargebacks in the calendar month divided by total settled card transactions in that month. The count-based ratio used by Visa VAMP and Mastercard ECP/HECM to determine merchant-monitoring program status. Visa Above-Standard at 0.9%; Mastercard ECM at 1.5%.
In practice.
The chargeback ratio is the single number that most determines the lifespan of a merchant account. Acquirers watch it monthly against scheme program thresholds, and a sustained breach triggers remediation plans, higher reserves or termination. Managing the denominator matters too: a sudden drop in sales volume can push the ratio up with no change in disputes.
Related terms: Chargeback · VAMP · ECP · Fraud rate
Disputes & risk