Context
Cartes Bancaires (CB) operates a suite of risk compliance programs to mitigate the impact of excessive fraud and dispute activities on the CB payment system and its participants. These compliance programs also aim to reduce fraud- and disputes-related client operational expenses and improve the cardholder experience.
The Cartes Bancaires CNP Disputes Monitoring Program monitors sales and dispute counts to identify merchants with excessive dispute activity, while the Cartes Bancaires CNP Fraud Monitoring Program monitors sales and fraud amounts to identify merchants with excessive fraud activity.
Please find below applicable thresholds and monthly fees for each program as of January 2023.
CNP Fraud Monitoring Program
According to Cartes Bancaires rules the CNP Fraud Monitoring Program monitors fraud activity at the merchant registration number level (Siret) on a monthly basis according to the original transaction date.
For example, fraud indicators for the month of January:
- The amount of Fraud = the total sum of fraudulent transactions performed in January
- fraud-to-sales ratio = the total sum fraudulent transactions performed in January divided by the total sum of sales captured in January
Only Cartes Bancaires CNP transactions are included in the calculation for the two applicable levels of the program: Alert & Program.
If a merchant's fraud indicators exceed CB CNP Fraud Monitoring Program thresholds figures, see the table below, during 4 consecutive months, then the merchant is qualified for Cartes Bancaires (CB) CNP Fraud program and will receive an official notification. Following the notification, implementation of remediation measures will be required to reduce fraud indicators.
| CNP Fraud Monitoring Program Thresholds | Payplug Actions | Non Compliance Assessments | |
|---|---|---|---|
| Alert | €10,000 of reported fraud and 0.13% fraud-to-sales ratio. |
Alert notification sent to the merchant | No Non-Compliance Assessments applied |
| Program | €20,000 of reported fraud and 0.30% fraud-to-sales ratio. |
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Starting 3 months after the identification, Non-Compliance Assessment fees can be applied retroactively for each month of non-compliance, and are calculated using the formula: 50 x fraud-to-sales ratio x fraud amount, with a cap of € 50 000 |
| Exit Criteria | Implementation of the Remediation Plan and fraud-to-sales ratio < 0,30% for 6 consecutive months | ||
CNP Disputes Monitoring Program
According to Cartes Bancaires' rules, the CNP Disputes Monitoring Program monitors disputes activity at the merchant registration number level (Siret) on a monthly basis according to the original transaction date.
For example, disputes indicators for the month of January:
- Disputes count = the total number of disputes received concerning the sales captured in January.
- Dispute-to sales count ratio = the total number of disputes received concerning the sale in January,divided by the total number of sales captured in January.
Only Cartes Bancaires CNP Transactions are included in the calculation for the two applicable levels of the program: Alert & Program.
If disputes' indicators exceed CB CNP Disputes Monitoring Program thresholds, see the table below, during 4 consecutive months, then the merchant is qualified for Cartes Bancaires (CB) CNP Disputes program and will receive an official notification. Following the notification, implementation of remediation measures will be required to reduce disputes indicators.
| CNP Disputes Monitoring Program Thresholds | Payplug Actions | Non Compliance Assessments | |
|---|---|---|---|
| Alert |
Disputes count > 100 |
Alert notification to the merchant | No Non-Compliance Assessments applied |
| Program | Disputes count > 200 & Dispute-to-sales count ratio > 2 % |
|
Starting 3 months after the identification, Non-Compliance Assessment fees can be applied retroactively for each month of non-compliance: €50 per dispute |
| Exit Criteria |
Disputes indicators are below the threshold of 100 disputes or dispute-to-sales count ratio of 1% for 6 consecutive months. |
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In order to allow you to better understand how the two programs work, please find attached Crates Bancaires Fraud and Disputes Programs timelines.