MasterCard Excessive Chargeback Programme
Potential Fines
MasterCard will issue fines if a merchant is an Excessive Chargeback Merchant.
The calculation of the MasterCard fine is formula driven and consists of two
components - an Issuer Recovery element ($25 per chargeback) and a Violation
element. The violation element is calculated after taking into account the Issuer
Recovery element and the basis point score. We cannot give an exact figure on
this as each case will be different however the figure can be very large.
Tier Structure
Mastercard has established a tiered structure for merchants identified as ECMs as
described below.
Tier 1 ECM
Mastercard considers a merchant as a Tier 1 ECM during the first through sixth
month (whether consecutive of non-consecutive) that the merchant is identified
as ECM.
Tier 2 ECM
Mastercard considers a merchant as a Tier 2 ECM during the seventh through
twelfth month (whether consecutive of non-consecutive) that the merchant is
identified as ECM.
Additional Tier 2 ECM Requirements
With respect to a Tier 2 ECM, Mastercard may require the acquirer to undergo a
Fraud Management Program (FMP) Level 3 Customer review, at the acquirer's
expense, as described in Chapter 13 fo the Security Rules and Procedures manual.
After a merchant has been an ECM for 12 months (whether consecutive or non-
consecutive), the acquirer may be deemed to be in violation of Mastercard rule
5.11.7. In addition to the standard ECM issuer reimbursement and violation
assessments, the acquirer may be subject to a noncompliance assemssement of
up to USD 50,000 per month for each month after the twelfth month that the
merchant remains an ECM.
Potential termination
Please be aware that some acquirers will terminate merchants if they remain in
the Mastercard Excessive Chargeback Programme (either CMM or ECM status) for
a total of 3 months.
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