Mastercard EFM Program: Program ThresholdsA Bit of Fraud is Bad Enough. A Lot of Fraud is Much, Much Worse
Knowing Where the Lines are Drawn for the EFM Program
A few fraudulent transactions here and there can be swept under the rug as unavoidable costs of doing business online. But what if you’re dealing with a deluge of fraud-related chargebacks?
To Mastercard, that’s a big red flag.
Through the card network’s Excessive Fraud Merchant (EFM) program, Mastercard doles out corrective actions against eCommerce merchants it deems risky to its payment ecosystem. In this article, we provide an overview of the EFM program’s thresholds and tiers so that you’ll know whether you’re in danger of landing yourself in hot water.
Threshold for Inclusion in the EFM Program
Fraud thresholds — and the associated noncompliance penalties — are nothing new. Mastercard has had similar requirements in place for years. Other card networks like Visa also have programs outlining acceptable levels of fraud incidents.
The Mastercard fraud monitoring program is targeted at streamlining enforcement and facilitating faster communication between acquirers and the card network. The goal is to make merchant compliance a more accurate process with greater accountability.
Below are the monthly thresholds that could place you in the program:
EFM Monthly Criteria:
| Number of Electronic- Commerce Transactions | Fraud Chargeback Amount | Fraud Chargeback Basis Points | 3DS Utilization (Including Data Only Transactions) |
| 1,000 or more | EUR/USD 50,000 or more | 50 or more | - Less than 10% (Non-regulated Countries) - Less than 50% (Regulated Countries) |
Unlike the corresponding Mastercard Excessive Chargeback Merchant (ECM) program, which is subdivided into “standard” and “high” ECM tiers, the card network’s Excessive Fraud Merchant (EFM) program only has a single tier.
If you surpass all three thresholds simultaneously, you will be involuntarily enrolled in the Mastercard EFM, where you’ll incur financial penalties that escalate every month. I’ll dive further into these fees in a later chapter.
