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Insights and Expertise

• Miscellaneous With the VAMP announcement,
• CNP fraud and acquirers are most concerned about
• Account takeover CNP fraud. Unfortunately, unlike
Not all Squares process payments chargebacks, there may be delays

All fraud-related chargebacks should be found on the between the cardholder notification
TC40 report, but not all TC40 reported transactions have and reporting.
corresponding chargebacks. There are several reasons for
this, including very small-dollar transactions that issuers
write-off rather than chargeback. Unfortunately, Visa uses the TC40 reporting in its VAMP
ratio. Consequently, just because a merchant has a low
Additionally, Visa's Rapid Dispute Resolution (RDR) chargeback ratio, that condition, like spring-time love,
converts pre-disputes to credits, but they still appear may be a necessary but insufficient component for a
on the TC40. According to an online article authored by lasting relationship.
Jessica Velasco of Kount, only 63.7 percent of the TC40
reported transactions advanced to a chargeback (see As founder of Humboldt Merchant Services, co-founder of Eureka
https://bit.ly/3YezW8e). Payments, and a former executive for such payments innovators as
WePay, a division of JPMorgan Chase, Ken Musante has experience in
With the VAMP announcement, acquirers are most all aspects of successful ISO building. He currently provides consulting
concerned about CNP fraud. Unfortunately, unlike services and expert witness testimony as founder of Napa Payments
chargebacks, there may be delays between the cardholder and Consulting, www.napapaymentsandconsulting.com. Contact him
notification and reporting. Issuers are financially at kenm@napapaymentsandconsulting.com, 707-601-7656 or www.
incentivized to immediately act on a cardholder's dispute linkedin.com/in/ken-musante-us.
and chargeback the transaction.

The chargeback clock is ticking, and failure to Snapshot of Upcoming Events
promptly chargeback a disputed item could
result in the issuer absorbing the loss through
a Past Time rebuttal by the acquirer. With
fraud reporting, issuers have 30 days from the
cardholder's notification to report the fraud.

While certainly issuers intend to promptly file
fraudulent reporting, unlike with chargebacks,
they are not financially incentivized to do so.
Consequently, the TC40 reporting is often
important and critical information, but it may June 2 - 4, 2025
also be stale. JW Marriott Orlando Bonnet Creek

Acquirers and processors need to consider this, Resort & Spa - Orlando, Fla.
especially for newer and unseasoned merchants. https://www.southeastacquirers.com/conference
Newer and large merchants could have high
fraud ratios that drive up a portfolio's VAMP
ratio. Because of the lag in the notice, those
fraudulent items could impact the portfolio for
months to come.

Acquirers and processors should consider
a tiered pricing methodology based on a
merchant's VAMP ratio so as to reward
merchants who assist in maintaining a lower
ratio while appropriately charging merchants
that are a drag on the ratio.
July 30 - 31, 2025
AI will aid detecting patterns and limit bust
outs. Acquirers need modern solutions for early Chicago Marriott Downtown
fraud detection or they will be dependent on Magnificent Mile, Chicago
dated tools and frustrated by the results. https://midwestacquirers.org/register/?ac=register

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