Problems › Mastercard ECM
Mastercard ECM thresholds: 100 chargebacks, 1.5%, and a fine schedule that runs on months.
TL;DR. Mastercard counts chargebacks only, divides this month's by last month's transactions, and identifies a merchant at 100 chargebacks and 1.5% (ECM) or 300 and 3% (HECM). The fines escalate by months in the programme, not by how far over you are, so the cost is decided by how fast you get out. The 100-chargeback minimum means Mastercard identifies merchants that Visa's 1,500-event floor never would. Amex runs on different rules again: the closed-loop guide.
Who this is for. Merchants processing $100K+ a month who have been identified under ECM, run Mastercard chargeback rates above 1% in a normal month, or want the Mastercard and Visa rules side by side.
Your Mastercard rate, your tier, and this month's assessment.
Mastercard divides this month's chargebacks by last month's transactions. Fraud reports do not count; refunds and dispute outcomes do not remove a chargeback. ECM: 100+ chargebacks and 1.5%+. HECM: 300+ and 3%+. Both conditions.
- Total assessed this month at these numbers: $9,000. The schedule escalates with months in the programme, not with the ratio, so a merchant stuck at 1.6% for a year pays the same as one at 2.9%.
- The previous-month denominator means a volume drop raises the rate by itself the following month; a volume spike hides chargebacks until the month after.
- Exit requires three consecutive months under the threshold. HECM drops to ECM when the numbers fall between the two.
Simplified: one merchant ID, no EFM (fraud) identification, schedule as published by processors in 2026. Mastercard communicates the actual assessment through your acquirer.
Same chargeback, counted three different ways.
Visa (VAMP)
Fraud reports + disputes, over the same month's settled CNP transactions. Excessive at 1.5% and 1,500 events; 0.5% and 5 if your acquirer is flagged. Fees per counted event. VAMP guide →
Mastercard (ECP)
Chargebacks only, over the previous month's transactions. ECM at 100 and 1.5%, HECM at 300 and 3%. Fines escalate by month in the programme; separate EFM programme for fraud. Three clean months to exit.
American Express
Closed loop: issuer, network and (on a direct agreement) acquirer are one company, so the rules are its own: inquiry before chargeback, a fee above 1%, Full Recourse on fraud. Amex guide →
Four rules that decide the number before you see it.
01
This month over last month.
Chargebacks received this month, divided by transactions in the previous month. A volume drop raises the rate on its own the following month; a spike hides chargebacks until the month after. Seasonal merchants get identified on the way down.
02
Chargebacks only, outcome irrelevant.
Fraud reports are not in the count (that is EFM). But a chargeback counts whether you win it, refunded it first, or had liability shift. The programme measures how many you receive, not how many you deserve.
03
100 is a low floor.
At 6,000 Mastercard transactions a month, 100 chargebacks is 1.7%. Merchants far too small for Visa's 1,500-event minimum are identified under Mastercard. The acquirer reacts to the identification, not the fine: from month six Mastercard can require the acquirer to run a remediation plan at its own expense, from month twelve it charges the acquirer too, and acquirers terminate well before that. Termination for this reason carries its own MATCH code (04, Excessive Chargebacks).
04
Months, not margin.
The fine for month seven is the same at 1.6% as at 2.9%. Every month you stay in costs more than the last; three consecutive clean months is the only exit. The economics reward fixing it fast, not fixing it slightly.
Two counters, one set of traffic.
We pull six months of chargebacks and fraud reports per scheme per merchant ID, run each scheme's own formula, and show where you stand on both at once, because an account can be clear on Visa and in month three of ECM without anyone having added it up. Then we look at what the acquirer is doing with the number, which is usually the real cost.
Where the fix is routing (a second acquirer carrying part of the volume; separate merchant IDs for business lines that really are separate, disclosed to the acquirer as such), we build it. Where it is the traffic, we say so. What we do not do is spread one business across MIDs to keep each one under the line: that is load balancing, every acquirer agreement prohibits it, it ends in termination of every linked account and a MATCH listing, and in 2024 the FTC treated it as an unfair practice in its own right.
What are the Mastercard ECM thresholds?
Mastercard's Excessive Chargeback Program has two levels. Excessive Chargeback Merchant (ECM): at least 100 chargebacks in the month and a chargeback rate of 1.5% or more. High Excessive Chargeback Merchant (HECM): at least 300 chargebacks and 3% or more. Both conditions must be met. The rate is this month's chargebacks divided by the previous month's Mastercard transactions, counted per merchant ID.
How is the Mastercard chargeback rate calculated?
Chargebacks received in the current month, divided by the number of Mastercard transactions in the preceding month. A chargeback belongs to the month it is raised, not the month of the sale. Fraud reports do not count (Mastercard runs a separate fraud programme). Refunds, liability shift and the dispute's outcome do not remove a chargeback from the count.
What are the fines?
They escalate by consecutive months in the programme, not by how far over the line you are. ECM: nothing in month one, USD 1,000 in months two and three, 5,000 in months four to six, 25,000 in months seven to eleven, 50,000 in months twelve to eighteen, 100,000 after that. HECM: nothing in month one, 1,000 in month two, 2,000 in month three, 10,000 in months four to six, 50,000 in months seven to eleven, 100,000 in months twelve to eighteen, 200,000 after that. From month four an issuer recovery assessment of USD 5 per chargeback over 300 is added. Mastercard communicates the amount through your acquirer.
How do we exit the programme?
Three consecutive months under the threshold. If a HECM merchant falls between the two levels, it moves down to ECM rather than out. Mastercard allows one request to suspend fines during an open case; use it only if you are confident of three clean months, because if you fall back over the line, the assessments resume.
What is Mastercard EFM?
The Excessive Fraud Merchant programme, separate from ECM. It identifies e-commerce merchants with at least 1,000 Mastercard transactions, more than USD 50,000 in fraud-related chargebacks, a fraud chargeback rate above 0.5%, and a low share of 3-D Secure transactions (10% or less in non-regulated countries, 50% or less in regulated ones). If you exceed both EFM and ECM thresholds, you are placed in EFM, but both counters keep running.
How is Mastercard ECM different from Visa VAMP?
Three ways. VAMP adds fraud reports (TC40) to disputes; ECM counts chargebacks only. VAMP divides by the same month's settled transactions; ECM divides by the previous month's. VAMP's merchant minimum is 1,500 counted events; ECM's is 100 chargebacks, so smaller merchants are identified under Mastercard long before Visa. A merchant can be clear on one and identified on the other, and the two need separate monitoring. Full VAMP guide: /problems/vamp-thresholds.
And American Express?
Different animal: a closed loop where the issuer, the network and, on a direct agreement, the acquirer are one company. No inquiry-free chargebacks unless Amex places you on its Immediate Chargeback programme, a fee per chargeback above 1% instead of a fine schedule, and a fraud programme that removes the right to contest. Full guide: /knowledge/amex-vs-visa-mastercard.
How is Milestone paid for this?
By the acquirer or PSP you end up using, as a commission on volume. No fee to you for a review of your scheme-programme exposure. We place with whichever of ~30 providers underwrites your vertical knowingly, so we have no reason to push one.
VAMP thresholds
Visa's combined fraud-and-dispute ratio, with calculator.
Account terminated
If the identification has already turned into a letter.
Amex vs Visa and Mastercard
What a closed loop changes: OptBlue, inquiries, fees, Full Recourse.
Send us last month's chargebacks by scheme.
Transactions and chargebacks per scheme per merchant ID, and who your acquirer is. We tell you within one business day where you stand on each scheme and what moves each number. No fee for the review.