Visa & Mastercard Suspend Risk Monitoring Rules Due to COVID-19

  • Max Jones
  • April 21, 2020
  • 3 minutes

The COVID-19 pandemic has had a significant global impact, introducing unprecedented challenges for citizens, businesses, and organizations.

In response, Visa® and Mastercard® have temporarily suspended some of the card brands’ regulations used to monitor and manage merchant risk.

The following is a high-level overview of the regulation updates.

Fraud Monitoring Program

  • No new enrollments for T&E merchants until July 31, 2020
  • Fees suspended for T&E merchants until July 31, 2020
  • Fees suspended for merchants in other industries on case-by-case basis
  • Fees suspended until September 30, 2020 for ecommerce merchants

Chargeback Monitoring Program

  • No new enrollments for T&E merchants until July 31, 2020
  • Fees suspended for T&E merchants until July 31, 2020
  • Fees suspended for merchants in other industries on case-by-case basis
  • No new enrollments until July 31, 2020 for airlines, cruise lines, passenger railways, or travel agents
  • Fees suspended until July 31, 2020 for airlines, cruise lines, passenger railways, or travel agents

Greater details about these updates can be found in the brand-specific sections below.

Visa’s COVID-19 Updates

Visa has suspended rules for two groups of merchants: merchants in the travel and entertainment industry and merchants in other industries who have been directly impacted by the pandemic.

Suspension of Monitoring Programs for Merchants in the Travel & Entertainment Industry

Visa is showing leniency to merchants with travel and entertainment (T&E) merchant category codes. Both the Visa Dispute Monitoring Program and the Visa Fraud Monitoring Program have been suspended through July 31, 2020. 

During this time:

  • Merchants are not being enrolled in these programs if they breach thresholds
  • Fines and fees have been suspended for merchants currently enrolled in these programs.
  • Acquirers don’t need to revoke payment processing privileges based on program enrollment.

Suspension of Monitoring Program Fees for Other Affected Merchants

It is difficult to anticipate the impact COVID-19 will have on individual merchants and which industries will be affected the most.

In order to provide relief to merchants who need it the most, Visa is empowering acquirers to adjust regulations as they see fit.

Acquirers are allowed to suspend or waive monitoring program fees for merchants that can prove they’ve been directly impacted by the pandemic.

Mastercard’s COVID-19 Updates

Mastercard also suspended rules for both the fraud and chargeback monitoring programs. While the chargeback monitoring program updates are limited, the fraud monitoring program suspension is more inclusive.

Suspension of Fraud Monitoring Program Fees

Mastercard understands that the influx in online shopping may be difficult for some merchants to manage. As a result, the card network has decided to suspend fees for the Excessive Fraud Program until September 30, 2020.

The card brand will continue to flag ecommerce merchants with high fraud rates, and acquirers have been asked to work with these merchants to reduce their risk exposure. However, merchants will not be fined for threshold breaches during the program’s suspension.

Program enrollment and fees will resume in November 2020 for any merchants who breach Mastercard’s fraud monitoring thresholds in October 2020.

Suspension of Chargeback Monitoring Program for Select Industries

Industries that have been directly impacted by global travel restrictions will not be penalized for higher-than-normal chargeback rates. 

Mastercard has suspended the Excessive Chargeback Program until July 31, 2020 for the following merchants:

  • Airlines
  • Cruise lines
  • Passenger railways
  • Travel agents 

During this time, merchants who exceed the brand’s chargeback limits will not be enrolled in the monitoring program.

Monitoring Other High-Risk Industries

Mastercard has asked acquirers to monitor other industries that may also be susceptible to chargebacks resulting from COVID-19 related events. The brand specifically asked acquirers to monitor delayed-delivery merchants like: 

  • Event ticketing companies
  • Gyms
  • Car rental companies
  • Hotels

No rules have been suspended for these industries yet, though monitoring may reveal the need for changes in the future.

Need Help Managing Chargebacks?

Has your business seen an increase in fraud or chargebacks due to the COVID-19 pandemic? If so, Midigator can help. 

Midigator aims to remove the complexity of payment disputes so businesses can get back to business. You have a lot to manage right now. Let Midigator handle your chargebacks.

Schedule a demo with our team today.

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