Mastercard EFM Program: Fee StructureIn Mastercard’s EFM? That’s a Problem You’ll Only Face for a Short Time (for Better or Worse)
The EFM Fee Structure is Deliberately Punitive
Like Mastercard’s Excessive Chargeback Merchant (ECM) program, the financial penalties imposed on merchants enrolled in the card network’s Excessive Fraud Merchant (EFM) program are severe and designed to escalate the longer you’re in the program.
Again, it’s no accident that Mastercard dials up the heat over time here: the intent is to make it so expensive to remain non-compliant that you have no choice but to fix your fraud problem. In this chapter, we’ll talk about the Mastercard fraud monitoring program’s fee structure so that you know what to expect.
EFM Assessment Structure
The EFM, like the Mastercard chargeback monitoring program, grants you a one-month grace period. However, as you can see, penalties for excessive fraud quickly begin to ramp up in the second month and beyond:
Listed below is the assessment schedule based on the number of months that you remain above the program criteria:
EFM Assessment Structure
| Number of Months Above EFM Thresholds | Violation Assessment |
| 1 | 0 |
| 2 | EUR/USD 500 |
| 3 | EUR/USD 1,000 |
| 4 to 6 | EUR/USD 5,000 |
| 7 to 11 | EUR/USD 25,000 |
| 12 to 18 | EUR/USD 50,000 |
| 19 + | EUR/USD 100,000 |
Mastercard started assessing financial penalties associated with the program in November 2020. Penalties are based on the number of fraud incidents reported in the previous month. For example, any penalties assessed in November would be tied to incidents that occurred in October
You may be able to request an extension for compliance by contacting your acquirer. However, this would be at Mastercard’s discretion and is not likely to be approved.
If Mastercard determines that you’re subject to the EFM program, there’s no way to appeal the decision or avoid the resulting penalties. At that point, the only option is to try and get your fraud incidents below the acceptable thresholds. We’ll talk more about this in later chapters.
