VAMP arrives as Australia scraps card surcharges
Visa's VAMP folds fraud and disputes into one penalised ratio — landing just as Australia removes surcharging and resets interchange. The squeeze on merchants, and the structural way out.
By The CPoI Team
Two things are happening to Australian card payments at once, and most merchants are only watching one of them.
The one they’re watching is domestic: the Reserve Bank’s overhaul of merchant card costs — surcharging removed, interchange cut. The one they’re not watching is global: Visa’s Acquirer Monitoring Program (VAMP), now live and enforcing. On their own, each is manageable. Arriving together, they close the two escape routes merchants have always used to absorb the cost of selling online.
What VAMP actually changes
VAMP replaces two long-running Visa programs — the Fraud Monitoring Program and the Dispute Monitoring Program — with a single combined ratio. Where fraud and disputes used to be watched on separate dials, they’re now added together:
VAMP ratio = (reported fraud + total disputes) ÷ settled transactions — calculated on card-absent transactions only.
That last clause is the part Australian online merchants should read twice. VAMP isn’t measuring your business. It’s measuring your card-not-present business specifically — the exact channel where fraud and disputes concentrate.
The thresholds are not generous, and they’re tightening. The merchant “excessive” level sits at 1.5% (150 basis points) and steps down from April 2026. Breach it, past the grace period, and Visa levies fees of up to US$8 per disputed or fraudulent transaction — on top of the refund, the lost goods and the scheme costs you were already paying. Enforcement left its advisory phase in late 2025; this is not a future problem.
The mechanics contain a nasty bit of arithmetic. Because fraud and disputes now share one numerator, a single bad transaction can be counted through both doors — reported as fraud and disputed. In a combined ratio, your worst transactions weigh double.
Why Australia makes it sharper
None of this is unique to Australia. What’s unique is the timing.
From 1 October 2026, the RBA removes surcharging on eftpos, Mastercard and Visa, and lowers interchange caps on domestic debit and credit. For consumers and for the 90% of businesses the RBA expects to be better off on fees, that’s genuinely good news — cheaper acceptance, clearer statements.
But it quietly removes something merchants have leaned on for two decades: the surcharge as a pressure valve. Until now, the cost of card acceptance — fees, and by extension the overhead of fraud and disputes — could be nudged onto the customer at checkout. After October, it can’t. Every cost of accepting a card lands where it’s incurred: on your own margin.
So the two changes compose into one squeeze. The RBA takes away your ability to pass on card costs. VAMP raises the penalty for the card-not-present fraud and disputes that drive those costs up. You can no longer surcharge your way around a problem that Visa is simultaneously making more expensive to have.
The number that ties it together
Step back and the whole picture reduces to a single figure: the card-absent fraud-and-dispute ratio. VAMP penalises it. The surcharge ban means you can no longer price around it. Interchange relief helps your fee line, but does nothing for the fraud and chargeback line — and it’s the fraud and chargeback line VAMP is watching.
Every tool aimed at this number so far has managed the symptom. Fraud scoring tightens and takes your good customers down with it. Dispute-deflection shaves the edges. None of it changes the underlying fact that a card-not-present transaction can’t prove who was behind it — which is why the fraud gets reported and the dispute gets filed in the first place.
Where CPoI changes the maths
CPoI works on the cause, and it does so in exactly the terms VAMP is written in.
At checkout the customer taps their card to their phone and enters their PIN. The payment is authenticated as card-present — and that single fact moves the transaction out of the card-absent population the VAMP ratio is calculated on. The transactions Visa is counting against you are the ones CPoI stops creating.
Underneath that, the two components of the ratio collapse on their own merits:
- Fraud reports fall. Chip & PIN authenticates the real cardholder, so the “reported fraud” side of the numerator has little to report — and liability sits with the issuing bank, not you.
- Disputes lose their footing. Card-present is the proof that “I didn’t make this purchase” claims rely on you not having. The “total disputes” side of the numerator drains too.
And it protects the margin you can no longer defend with a surcharge. In a market where the cost of card-not-present fraud now stays on your books, the most valuable thing you can do is stop generating it.
The window is now
VAMP is enforcing today. The surcharge ban lands in October. Australian merchants have a narrow stretch in which to change how their online payments are authenticated before the two changes fully overlap.
The old plan — price the risk into a surcharge, argue the disputes later — is closing on both ends. The card-present rail, brought online, is how you get ahead of it.