Merchant Best Practices During a Pandemic: Communication is Key

Payscout is proactively monitoring merchant activity during the COVID-19 Pandemic, and is increasing communication with merchants as trends emerge. Here is a high-level overview of the Best Practices associated with merchant activity during this time of crisis. 


Communication is Key

In these uncertain times, it’s crucial for merchants to communicate clearly and often with their customers. As an example, if a business has been affected in a way that results in delivery delays outside the normal time frame, the merchant should proactively communicate these delays with their customers, and offer refunds when applicable. At a minimum, increasing communication with your customers — with signage, alerts, or mass emails — is critical. The more open communication merchants can maintain with their customers, the better the outcomes will be.

Review Your Refund Policy

This is an important time to review your refund policy. In particular, one thing to avoid is issuing refunds on cards that were not used for the original transaction. Merchants should never do this. The consumer can still chargeback that transaction, and the likelihood of winning a dispute in this context is very low. On top of having to refund the transactions, merchants can be saddled with arbitration fees — and these issues can ultimately delay the settlement of funds at a time when cash-flow considerations are of the utmost importance. Be proactive: Review and update your refund policy to avoid these issues.

Consider Alternative Payment Channels

Everyone, from your customers and clients, to your employees and vendors, is understandably concerned about their health and exposure to germs or contaminants. The channels through which you’re accepting payments should also be a part of your health and safety considerations. A near-field communication (NFC) or contactless card-reader is an excellent place to start for card-present transactions, and there are many viable alternatives to processing transactions remotely. These range from customer-centric options such as hosted payment pages or online portals, to internal-employee options like virtual terminals for processing phone (MOTO) transactions. 

Safety Applies to People and Payments

Adding these channels is quick and easy with Payscout — and the second-most important consideration after your customer and employee health and safety is the security of data/information in these payment channels — and we’ve got you covered there, as well. Our secure payment solutions are all PCI-compliant, and we have integration options that can significantly reduce the scope of your compliance requirements or take you out of scope for PCI-compliance altogether. This is our expertise, and we’re here to make it easy for you.

If you have any questions about ensuring your business preparedness during COVID-19, contact us at any time at 888-689-6088.

Mastercard Chargeback Monitoring Program Updates

Mastercard has recently updated its Chargeback Monitoring Program. The new updates involve 2 different programs: the Excessive Fraud Merchant (EFM) Compliance Program and the Excessive Chargeback Program (ECP).

The EFM Compliance Program is intended to mitigate fraud on e-commerce transactions, while ECP is targeted at monitoring and reducing excessive chargebacks. Both programs have thresholds for fraud or chargebacks, and merchants are required to remain below these thresholds. When merchants exceed the threshold, they will be entered into a category and will receive a  fine ranging from USD $500 to $200,000, based on how long the merchant is in the program for,and the number of chargebacks received. 

Below are the thresholds for EFM and ECP:

EFM (Excessive Fraud Merchant Compliance Program)

  • The total dollar amount (or local currency equivalent) of fraud-related chargebacks in a given month exceeds USD 50,000.
  • The total number of fraud chargeback basis points (bps) is greater than 50.
  • The percentage of monthly clearing volume processed using 3DS (including Data Only transactions) is less than 10% in nonregulated countries or 50% in regulated countries.

*The EFM Program does not apply to merchants in Germany, Liechtenstein, St. Helena, and Switzerland. 

ECP (Excessive Chargebacks Program)

There are 2 levels in Mastercards’ Excessive Chargeback Program: Excessive Chargeback Merchant (ECM) and High Excessive Chargeback Merchant (HECM). In both cases, merchants are entered into the category when the two conditions listed for each program are met.


  • The total number of chargebacks is greater than 100.
  • The total number of chargeback basis points is greater than 150. 

High ECM

  • The total number of chargebacks is greater than 300.
  • The total number of chargeback basis points is greater than 300.

What do these changes mean for me? 

To ensure compliance with Mastercard’s Chargeback Monitoring Programs, it is critical that merchants select a payment processing provider that is experienced in monitoring chargebacks and fraud. To learn more, contact today.