What is the purpose of the High-Risk Chargeback Monitoring Program (HRCMP)?

The High-Risk Chargeback Monitoring Program (HRCMP) is designed specifically to help financial institutions and merchants manage the risks associated with high chargeback rates. By alerting merchant banks to high-risk chargeback rates, the program serves to monitor and track merchants who are exhibiting potentially problematic chargeback behaviors. This proactive approach allows banks to take necessary actions to mitigate financial risk, which may include monitoring the merchant more closely or potentially instituting measures to help reduce chargebacks.

This focus on identifying and addressing high-risk chargebacks is crucial for maintaining the health of the broader payment ecosystem, as excessive chargebacks can lead to financial losses for both banks and merchants, as well as impact their reputations within the payment card industry. Therefore, the primary purpose of the HRCMP is clearly aligned with monitoring and responding to these chargeback rates in order to protect the integrity of the payment system.