Visa TC40: Practical Guide to Reducing Fraud Reports

Visa TC40 is a fraud report that a bank sends to Visa when a customer claims that a transaction was not made by them.

In simple terms, it is a signal that the transaction is being treated as fraud at the bank level.

Why is it important to control the number of TC40 reports?

The Visa Acquirer Monitoring Program, also known as VAMP, is a monitoring program by Visa that tracks fraud and chargeback levels of merchants through their acquiring bank.

It determines whether a merchant exceeds acceptable risk thresholds.

If a merchant enters VAMP, the consequences may include:

In most cases, acquiring banks set a VAMP threshold at around 1 percent, although enforcement actions may begin even earlier.

VAMP rate formula

TVAMP rate is calculated as:

• **VAMP rate = (Chargebacks + TC40) / Transactions**

This means that the total number of chargebacks and TC40 alerts is divided by the total number of transactions.

If this metric exceeds 1 percent, the merchant is very likely to face sanctions in the near future.

Importantly, even if a merchant has zero chargebacks, a high number of TC40 reports alone can still push them into VAMP.

How to reduce TC40 reports

There is only one direct tool that can help reduce the number of TC40 reports, which is Visa Order Insight.

When the issuing bank receives additional transaction details from the merchant, it may decide not to proceed with a dispute and therefore does not generate a TC40 report.

This makes integrating Visa Order Insight critical for subscription based businesses and merchants operating in high risk segments.

However, there is currently no solution on the market that can completely eliminate TC40 reports. That is why merchants must take additional steps on their side to reduce both the number of alerts and the overall VAMP rate.

Practical steps to reduce TC40 and VAMP risk

Increase the number of transactions

If the number of transactions increases while TC40 reports remain stable, the VAMP rate decreases.

This means it is important to grow the volume of clean transactions.

Recommended actions:

1. Lower the price of the trial period
2. Introduce low cost in app purchases as upsells, preferably with 3DS
3. Reduce the price of recurring payments, potentially combined with higher billing frequency

Traffic analysis

Regularly analyze traffic across:

• Sources
• Partners
• Countries (GEO)
• Issuing banks using BIN data

Scale traffic sources with low TC40 rates and reduce or disable those with high risk.

Customer transparency

Ensure the transaction is clearly recognizable for the customer.

Use a clear billing descriptor that includes brand name, website, and support contact details.

1. Optimize the payment page

   • Clearly state that it is a subscription
   • Add a checkbox confirming agreement to subscription terms
   • Display full pricing
   • Show billing frequency
   • Avoid using the word free if the product is not actually free

2. Post-purchase communication
   Clearly communicate:

   • What was purchased
   • When the next charge will occur
   • How to cancel the subscription
   • Send reminders two to three days before renewal

3. Refund and cancellation experience

4. Offer a simple and fast refund process upon request

5. Enable one-click subscription cancellation with email confirmation

Final note

Reducing TC40 reports is not about a single fix. It requires a combination of transparency, traffic quality, and the right payment tools.

To integrate Visa Order Insight and implement advanced chargeback and fraud prevention solutions, contact the team at Merchanto.

We wish you stable and secure business growth. 🚀