Mastercard has announced updates in its fraud and chargeback merchant compliance programs
Mastercard has announced updates in its fraud and chargeback merchant compliance programs and we would like to familiarize our clients with them. The changes are in place globally, including Europe except for the merchants from Germany, Liechtenstein, and Switzerland.
The EFM Compliance Program helps decrease fraud for e-commerce transactions providing a better experience for cardholders and ultimately an increase in approval rates for all participants. The Program measures compliance at the merchant ID (MID) level and sends the notifications and potential financial assessments to the acquirer.
EFM Monthly Criteria
| Number of Transactions | Fraud Chargeback(4837, 4863 reason codes) Amount | Fraud Chargeback Basis Points | 3DS Utilization (including Data Only Tax) |
| 1,000 or more | EUR/USD 50,000 or more | 50 or more | • Less than 10% (Non-regulated Countries*) • Less than 50% (Regulated Countries) |
The EFM Assessment will depend on the number of months above EFM thresholds. The fines start at EUR 500 for two months of noncompliance and may reach up to EUR 100,000 (for 19+ months).
| Number of months Above EFM Thresholds | Violation Assessment |
| 1 | 0 |
| 2 | EUR 500 |
| 3 | EUR 1,000 |
| 4 to 6 | EUR 5,000 |
| 7 to 11 | EUR 25,000 |
| 12 to 18 | EUR 50,000 |
| 19+ | EUR 100,000 |
Excessive Chargeback Merchant program
Excessive Chargeback Merchant (ECM) program monitors merchants on the merchant ID level that receive an excessive number of chargebacks on a monthly basis. Merchants will be evaluated under two categories—Excessive Chargeback Merchant (ECM) and High Excessive Chargeback Merchant (HECM). Mastercard automatically tracks chargebacks for all transactions through network data and notifies acquirers when an individual merchant ID has breached the compliance threshold.
| EFM and HECM Monthly Criteria | ||
| Monthly Criteria | Number of Chargebacks | Basis Points |
| ECM | 100 to 299 | 150 to 299 |
| HECM | 300 or more | 300 or more |
*The list of Regulated and Non-Regulated Countries is below
Europe Region
Regulated Countries
| Austria | Gibraltar | Netherlands |
| Belgium | Greece | Norway |
| Bulgaria | Hungary | Poland |
| Croatia | Iceland | Portugal |
| Cyprus | Ireland | Romania |
| Czech Republic | Italy | Slovakia |
| Denmark | Latvia | Slovenia |
| Estonia | Lithuania | Spain |
| Finland | Luxembourg | Sweden |
| France | Malta | United Kingdom |
Non-Regulated Countries
| Albania | Israel | Serbia |
| Andorra | Kazakhstan | Tajikistan |
| Armenia | Kosovo | Turkey |
| Azerbaijan | Kyrgyzstan | Turkmenistan |
| Belarus | Macedonia | Ukraine |
| Bosnia and Herzegovina | Moldova | Uzbekistan |
| Channel Islands | Montenegro | Vatican City |
| Georgia | Russian Federation | |
| Isle of Man | San Marino |
The United States is a non-regulated country.