Mastercard SMMP 2026: The New Excessive Chargeback Program Explained

Mastercard's System to Mitigate Merchant Risk — SMMP — is the network's mechanism for identifying merchants with elevated chargeback activity and escalating consequences until the problem is resolved. The program was restructured in 2025 with lower thresholds, expanded merchant category coverage, and steeper fee escalation than its predecessor (the Excessive Chargeback Program, or ECP).

For merchants who've been operating on pre-2025 assumptions about what Mastercard monitors and at what thresholds, this article provides the current picture.

What SMMP Monitors

SMMP measures your monthly chargeback-to-transaction ratio using a specific calculation:

Ratio = (Mastercard chargebacks received in Month M) ÷ (Mastercard transactions processed in Month M-1) × 100

Note the prior-month denominator: Mastercard uses your transaction volume from the previous month as the denominator. This means if your transaction volume drops significantly (seasonal business, product issues), your ratio can increase even if your absolute dispute count stays the same.

The calculation includes all Mastercard chargeback types: consumer disputes, fraud disputes, authorization disputes, and processing errors. There is no TC40 equivalent component in SMMP (unlike Visa VAMP), though Mastercard has its own fraud monitoring through the MATCH system and is expected to integrate fraud signals more tightly in future program iterations.

2026 Thresholds

Standard Merchant Threshold: 1.5% monthly chargeback ratio or 100 chargebacks per month (whichever is lower for the threshold to apply)

Excessive Merchant Threshold: 2.0% monthly chargeback ratio or 1,000 chargebacks per month

These thresholds apply to merchants in most categories. High-risk MCCs (merchant category codes) designated by Mastercard — including gambling, adult content, and certain nutraceutical categories — have different (often stricter) thresholds that Mastercard communicates through acquirers.

Once you breach the Standard threshold for two consecutive months, you enter the Standard tier. Breach for a further four months and you escalate to the Excessive tier, with dramatically higher fees.

The Fee Structure

SMMP fees are assessed against your acquirer, who passes them through to you. The current structure:

Standard Tier:

• Months 1–6 of breach: $1,000 per month assessment, plus $5 per excess chargeback above 100
• Months 7–11: $5,000 per month assessment, plus $25 per excess chargeback

Excessive Tier:

• Month 1: $25,000 per month assessment, plus $25 per chargeback
• Month 2+: $50,000 per month, plus increasing per-chargeback fees

These fees escalate quickly. A merchant with 200 excess chargebacks per month in the Standard tier's second half pays: $5,000 + (200 × $25) = $10,000/month. In the Excessive tier, the exposure grows substantially.

Beyond the fees, acquirers face their own Mastercard assessments for maintaining merchants in Excessive status. This creates strong acquirer incentive to terminate accounts that don't show remediation progress — regardless of the fee impact on the merchant.

SMMP vs. Visa VAMP: Key Differences

Merchants who operate across both networks need to track compliance with both programs separately, as they differ in important ways:

| Factor | SMMP (Mastercard) | VAMP (Visa) | |--------|-------------------|-------------| | Denominator | Prior month transactions | Same month transactions | | Fraud component | Disputes only | Disputes + TC40 | | Standard threshold | 1.5% | 0.9% | | Escalation months | 2 to enter Standard | Immediate at Standard | | Fee start | $1,000/month | ~$50/excess dispute |

VAMP's lower threshold (0.9%) means Visa monitoring typically activates before Mastercard monitoring for merchants with uniform dispute rates across networks. However, SMMP's steeper fee escalation makes Mastercard monitoring more financially damaging when it does occur.

Entering SMMP: What Happens

When you breach the Standard threshold:

1. Mastercard notifies your acquirer
2. Your acquirer notifies you (timing varies; some acquirers notify quickly, others with a lag)
3. You enter Month 1 of the Standard monitoring period
4. Your acquirer is required to implement a Merchant Performance Improvement (MPI) plan with you
5. Monthly fee assessments begin accruing

The MPI plan is the operational centerpiece of SMMP remediation. Mastercard requires your acquirer to document the root causes of your elevated dispute rate and the specific actions you're taking to address them. Acquirers who don't demonstrate active remediation with merchants face their own escalating scrutiny from Mastercard.

For tools to calculate your current SMMP exposure and model remediation scenarios, the Mastercard chargeback fines calculator at Chargemate is a practical starting point for understanding your financial exposure under different dispute rate trajectories.

Remediating SMMP: The Operational Path

Exiting SMMP requires reducing your monthly ratio below the Standard threshold for three consecutive months. This means the remediation must be durable, not just a temporary dip.

Fastest ratio impact (30 days):

• Implement or improve dispute representment to win more cases
• Enroll in Mastercard Consumer Clarity (pre-dispute deflection)
• Fix merchant descriptor to reduce non-recognition disputes

Medium-term impact (60–90 days):

• Implement 3DS for CNP transactions to reduce fraud disputes
• Add pre-billing notifications for subscription merchants
• Fix identified root cause dispute categories (the reason code that's 40% of your volume)

Structural (90+ days, but essential for sustained compliance):

• Fraud prevention stack improvements
• Checkout documentation improvements
• Return and refund policy clarifications
• Customer service responsiveness to complaint resolution before disputes

The Chargemate SMMP guide provides the full operational framework for remediation, including what acquirers need to see in an MPI plan to be satisfied with your progress.

Working With Your Acquirer During SMMP

Acquirers vary significantly in how they manage merchants in SMMP. Some have proactive account management teams who partner with merchants on remediation; others are more transactional and simply pass through fee notifications.

The key is transparent communication. Share your remediation plan, show progress data monthly, and escalate problems early. Acquirers who see a merchant trying — and making measurable progress — are much more patient than acquirers managing silent accounts.

If your acquirer relationship is deteriorating due to SMMP, consider whether bringing in a specialist for the remediation period might accelerate the timeline enough to preserve the relationship. At Fincoro, we've worked with merchants in both Standard and Excessive tier SMMP who successfully exited the program within 60–90 days with a combination of the interventions above. The program is recoverable if you move quickly and systematically.