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TrustPay announces new partnership with MuchBetter

Computer users and programmers have become so accustomed to using Windows…

TrustPay announces new partnership with MuchBetter

Computer users and programmers have become so accustomed to using Windows…

TrustPay announces new partnership with MuchBetter

Computer users and programmers have become so accustomed to using Windows…

26. March 2021

Is your acquirer adding value?

Health
author: TrustPay
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Merchants have to deal with a larger, more complex range of operational challenges than ever before – and the payments process is certainly no exception. Navigating growth plans, regulatory hurdles, new technologies, changing customer preferences, fraud risk, and cost control are ongoing battles for merchants of all sizes and across all sectors.

Understandably, most merchants don’t have a huge pool of in-house resources focused on unpicking all these challenges – their focus needs to be on the core business. But luckily, there are external resources that can really make a difference in ensuring the payments challenges are addressed, and the right balance is struck to support business success. Acquirers are uniquely placed to be that supporting resource – they can make a real difference by helping merchants with monitoring fraud, issuer liaison, providing advice on new market entry and a range of other challenges.

Vendor or partner?

If your acquirer is purely providing you with just the hardware and minimum connections you need to process card payments, then you’re missing out on a lot of potential value.

In fact, an experienced, proactive acquirer should be acting as your payments partner rather than just a supplier of the necessary tools. We’ve put together some ideas on five ways your acquirer can add real value to your business.

Acquirers can help you to:

Improve conversions

Converting customers is the top KPI for most merchants, yet conversion rates are often still very low, with a large percentage of customers abandoning their order at the point of payment. Delivering the right customer checkout experience can make a huge difference. Acquirers should enable merchants to optimise their payment page and improve the transaction flow, to create a fast, seamless checkout process that minimises cart abandonment and maximises conversions.

acquirer

Improve acceptance

Even if a shopper commits to buy, you can still lose the sale if the transaction gets declined. The ultimate authorisation decision sits with the card issuer. However, it doesn’t mean that merchants can’t improve their payment acceptance levels.

Acquirers can also help give you a better view of your payments acceptance performance and provide advice on improvement areas.

Reduce fraud and chargebacks

Fraud is an ever-growing headache for merchants, and it costs heavily to have an inefficient fraud prevention strategy in place. Your acquirer should be able to supply you with tools to help reduce your fraud and chargeback levels through effective customer authentication, identity verification services, and tailored risk management monitoring.

This valuable support can help you drastically reduce costs by separating fraudsters from genuine customers and reducing chargeback management’s significant costs.

Tackle regulatory change

Payments regulation can be complex and confusing; whether it is meeting the obligations of PSD2’s Strong Customer Authentication, data security and privacy laws or sector-specific regulation, it all takes time and resources to navigate. Since regulation is something that no business can afford to ignore, this is another area where acquirers can really lend a hand.

As payments experts, acquirers have to have a strong understanding of regulations and act as valuable advisors to merchants and understand what each change means for your business, what you need to be aware of, and what action you need to take.

Support growth

Whether you’re looking to grow domestically or cross-border, you need the right payment methods and technical connections in place. Working with the right acquirer can ensure you can support all the different ways your customers want to pay, including alternative payment methods and different models such as recurring billing. Having the right payment mix can help you break into new markets and segments with greater success by ensuring you are catering to consumer preferences.

International acquirers

International acquirers can also offer valuable insight into the market dynamics (regulations, scheme issues, customer demographics etc.) of new geographies that you’re looking to target – giving you a head-start in preparing for new market entry.

For any merchant struggling with their payments operations – or indeed any one of the above challenges, look to your acquirer for assistance.

If you’d like to know more about how TrustPay assists its merchant customers with these core areas, get in touch at sales@trustpay.eu.

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11. March 2021

EMV 3DS transition update

Health
author: TrustPay
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All stakeholders within the e-commerce and online payment industry are keen on ensuring the security of each and every online transaction.

The industry’s interest is to reduce fraudulent transactions and to enhance the security of online payments, while at the same time promoting the cardholder’s overall experience in the online payment environment. Performed effectively, these efforts will without question lead to better revenues of particular e-commerce merchants and the whole industry will yet further sustain its position as the future of all payment services.

What you already know about 3DS 1.0.2.

To that end, Visa Secure, in its original specification 3DS 1.0.2. was introduced over 15 years ago. It was designed to make online payments more secure by enabling an issuer to authenticate its cardholders, thus ensuring payments are made by the legitimate owner of the account.

To foster the set goals even further, EMV 3DS, an updated version of the 3DS 1.0.2. was published in October 2016. It provides for a seamless user experience, enhanced data exchange for better fraud management and authorization decision making, and support across multiple payment channels and devices.

With the event of the SCA mandate established under the PSD2, the inevitability of the transition from 3DS 1.0.2. to EMV 3DS became even more apparent.

EMV 3DS - secure payments

What Visa intends to do?

Visa has recently reaffirmed its commitment to support the industry’s full transition from 3DS 1.0.2. to EMV 3DS. Effective 15 October 2022, Visa will discontinue support for 3DS 1.0.2 and all related technology. 

Such changes are not accomplished easily. Being well aware of that, Visa has decided to give its clients more time to prepare for the full abandonment of 3DS 1.0.2. by revising the rule change announced earlier to remove merchant fraud liability protection on 3DS 1.0.2.

What is it going to look like?

From 16 October 2021 onwards Visa will continue to support 3DS 1.0.2 transaction processing, while at the same time:

  1. If a particular issuer continues to support 3DS 1.0.2. after the effective date, Visa will guarantee Merchants fraud liability protection on all transactions processed under 3DS 1.0.2. using payment cards issued by this issuer.
  2. If a particular issuer no longer supports 3DS 1.0.2. following 16 October 2021, Merchants may still process transactions made using payment cards issued by this particular issuer under 3DS 1.0.2., yet Merchants will have to assume full liability for fraud-related disputes.

 

In order for Merchants to avoid any inconveniences in the future and to boost the sound operation of their e-commerce businesses we recommend Merchants migrate to EMV 3DS in a reasonable time. To find out more on the migration to EMV 3DS, do not hesitate to get in touch at sales@trustpay.eu.

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11. February 2021

Optimising the payment page

Health
author: TrustPay
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Cart abandonment is still an ongoing battle for merchants, with an alarmingly high 80% average dropout rate at the payment checkout page. It’s essential to create a smooth and seamless customer experience at the checkout to diminish the number of customers who drop out at the last minute.

Once customers get to the payment checkout page, they’ve decided to buy – all they need to do is complete the payment process. While it seems a simple step, cart abandonment is still an ongoing battle for merchants, with an alarmingly high 80% average dropout rate at the online checkout.

Payment page versus cart abandonment

The reasons for cart abandonment are many and varied, but some of the most common reasons given by shoppers include hidden shipping costs, the need for customer registration, a lack of trust in the payment page and overly complex checkout processes.

online payment page checkout

While you can’t entirely prevent cart abandonment, (there will always be customers who simply change their mind, for instance) there is a great deal that merchants can do to reduce it and, in doing so, increase conversion rates. The first – and perhaps the most fruitful step – is to optimise the checkout experience.

Tips for creating a conversion-boosting payment checkout process

To give a better chance of moving the customer through the checkout successfully, merchants need to create a checkout process which is convenient and trusted. Often, merely simplifying the process can help significantly. The payment page must be clear, straightforward, easy to complete and avoid giving customers any reason for hesitation or doubt. Here are our top tips for creating a frictionless, conversion-boosting checkout process.

  1. Keep the payment page simple

  • Ensure the payment page is optimised for each device type (smartphone, tablet, computer etc.), so customers have a clear view of everything in one place.
  • Avoid visible or awkward page redirections – they risk technical glitches and customer uncertainty.
  • Minimise the number of fields on the page or steps in the checkout process.
  1. Deliver convenience and choice

  • Support a relevant range of payment methods; ideally, the top three preferred methods in each market.
  • Offer one-click payment options for returning customers.
  • Implement a guest checkout option for new customers, with the chance to create an account after the transaction is completed.
  1. Inspire trust

  • Make sure pricing is transparent ahead of the final checkout, including listing any shipping costs.
  • Use low-friction, trusted customer authentication methods where possible.
  • Assure customers that their payments details are being protected.

online payment page checkout

  1. Put your stamp on it

  • Employ a consistent look and feel throughout the process.
  • Customize your payments page to make sure it is a fitting part of your brand experience
  • Work with your payment provider to capture exactly the right data and personalize for your customers where possible.

These simple steps can help you create a smoother, more seamless customer experience at the checkout, which in turn can help you boost conversion and reduce the number of customers who drop out at the last minute. The more at ease your customers feel when they reach the payment page, the more likely they are to complete their transaction.

If you are looking for a customized, modern payment page or want to find out more, get in touch at sales@trustpay.eu

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18. January 2021

Payment fraud de-mystified

Health
author: TrustPay
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Payment fraud is one of the key ongoing challenges faced by e-commerce merchants, as fraudsters’ tactics and the technology to carry out fraud attacks gets ever-more sophisticated.

Most e-commerce merchants have seen an enormous influx of new customers this year as the pandemic has pushed ‘digital avoiders’ to make the switch to online shopping. This has created an ideal environment for fraudsters to hide their activities but has also made it far more difficult for merchants to separate good customers from fraud.

The first step in battling fraud is to understand how it is most commonly perpetrated, along with the most effective tools for fraud prevention.

Common fraud types

There are many different types of fraud – too many to cover in one short blog. However, some types of fraud hit merchants far more than others. Here are some of the most common frauds that e-commerce merchants experience:

Identity theft

Forter recently reported a 123% increase in Identity Manipulation this year- where fraudsters use stolen Personally Identifiable Information (including sensitive data such as card details, address, email etc.) to conduct attacks. According to Ravelin, identity theft is at the root of a vast majority of e-commerce fraud, comprising over 71% of all attacks.

Fraudsters can obtain the data from genuine customers from various sources, including the dark web, bot attacks, other forms of hacking, phishing, lost or stolen payment cards, and the list goes on. They use real data to make fraudulent purchases – resulting in losses for both the genuine customer and the merchant.

 

Account takeover fraud

Account takeover fraud is a form of identity theft where a fraudster gains access to an account (bank account, payment card or digital wallet, for instance). The fraudster changes information such as log in credentials or personal information and then makes unauthorized transactions using that account.

Card testing

Fraudsters often use e-commerce sites to test stolen card details to see if they’re useable. Card testing is often conducted using very small payment amounts, sometimes repeatedly, before the fraudster moves on to higher-value purchases.

Friendly fraud

Friendly fraud is a growing problem – and one that is difficult to spot, because the customer is real, and often legitimate. In friendly fraud, the customer pays for a service or product and then claim it was never delivered. The merchant then has to issue a refund, replace the item, or face a chargeback.

The tools and tactics to beat fraud

A solid fraud prevention strategy is vital for maintaining profitability, customer satisfaction and strong conversion rates, as well as minimizing losses – because it’s just as important to ensure genuine customers are not wrongly declined, as it is to block fraud.

While it’s virtually impossible for e-commerce merchants to eliminate fraud entirely, there are many tactics that you can and should put into place to protect your customers and your business from fraud losses. These include:

  • Understanding the latest fraud trends can help you adapt your fraud prevention processes to address emerging threats
  • Ensuring that you capture and analyze as much customer data as possible within the transaction and use it to build strong customer profiles. This will help you spot unusual behaviours that may signal fraud – but it will also ensure you understand and support genuine customers better.
  • Ensure you validate customers through a robust authentication process such as 3D Secure
  • Consider tokenization or encryption methods to help protect sensitive customer data.
  • Make sure your fraud solution can identify patterns that highlight repeat offenders of friendly fraud. You can then take action to shut down those accounts if needed, or at least review orders before approving them.

Velocity risk checks can help spot card testing and repeat fraud by flagging accounts with an unusually high number of transactions in a short time period.

If you want a customized fraud prevention strategy or useful tips on how to minimize fraud with your specific business model, get in touch at sales@trustpay.eu.

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6. January 2021

Visa Free Trial Subscription Updates

Health
author: TrustPay
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As previously published in our blogs, Visa had decided to update its acceptance, disclosure and dispute policies for transactions at merchants that offer free trials or discounted introductory promotions as part of an ongoing subscription service as of 18 April 2020. The changes applied to merchants selling either physical or digital goods and services if they offered free trials or introductory offers that roll into a recurring agreement.

An overview of all requirements forming part of Visa’s update can be found in our previous article.

Enhanced Statement Descriptor

The effective date of the requirement to support an enhanced descriptor for the first transaction at the end of a trial or discounted promotional period, originally included in the requirements, was due to the pandemic postponed to 17 April 2021.

Nevertheless, Visa has recently adopted a new standpoint concerning the implementation of the enhanced descriptor. According to Visa’s reasoning, it is critical for the payment system to remain stable and secure for all stakeholders during the evolving COVID-19 pandemic. Visa recognizes that our businesses are facing significant operational challenges at this time, particularly for technology updates. To that end, Visa has decided to remove the requirement for support of the enhanced statement descriptor.

Keep in mind the effective date

Effective 17 April 2021, the enhanced descriptor will be optional for the first transaction at the end of a trial or discounted promotional period. The descriptor can be used in the merchant name field or the merchant city field. All other requirements, as previously announced, are still applicable.

Contact us for more information or help

Do you need help or have further questions? Please, do not hesitate to contact your Account manager or contact us via sales@trustpay.eu. We will be pleased to advise you.

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4. December 2020

Brace for impact, SCA is about to hit – are you ready?

Health
author: TrustPay
Follow us:

As we enter the final part of the year, peak shopping season, pandemic-driven e-commerce acceleration and the annual change freeze period will collide. But this year the introduction of Strong Customer Authentication (SCA) will also enter the mix – and for some merchants, it may feel like the end of 2020 will be even more daunting and difficult than the early part of the year.

Ahead of this perfect storm of payments challenges, we wanted to share our insight into the issues e-commerce merchants are likely to face around the online customer experience and what can be done to minimise disruption.

SCA – a quick recap

Strong Customer Authentication (SCA) was introduced as part of the Payment Services Directive (PSD2) and requires electronic payments initiated by the buyer to be authenticated by at least two of the following three factors.

  • Something the cardholder knows (e.g., a password or PIN)
  • Something the cardholder has (e.g., a token, a mobile phone)
  • Something the cardholder is (e.g., a fingerprint or voice match)

The original deadline for SCA implementation in e-commerce had been extended but is now set to be enforced in the UK from September 15th 2021 and across most of the EEA from January 1st 2021.

The COVID effect

The impact of COVID-19 on e-commerce merchants and their Strong Customer Authentication (SCA) preparations have been significant, especially since the industry has seen unusual and unpredictable transaction trends throughout most of this year. As a result, the payments industry called for additional time to allow merchants to focus their efforts on SCA again. Unfortunately, while the UK authorities have granted a final short extension, The European Commission decided against any further delay, stating:

“The Covid-19 pandemic has increased the volume of e-commerce and consequently of online payments. It can be expected that many EU consumers will maintain these new payment habits. This would call more than ever before for robust and innovative strong authentication methods. Delaying them further could undermine customer trust in e-commerce and slow down the deployment of new and innovative state-of-the-art authentication methods in the EU.”

This means that the majority of merchants across Europe have only a matter of weeks left to prepare and comply.

What happens if merchants don’t meet the deadline for SCA?

If a merchant isn’t able to support a card issuer SCA process, the issuer will be legally required to decline those payment requests. This ultimately means lost sales, unhappy customers and a big impact on revenues.

While most issuers and acquirers are likely to be ready for the impending deadline, research suggests that many e-commerce merchants are still relying on their payments providers to navigate any compliance changes on their behalf. As a result, some may be caught unawares.

On the flip side, merchants who are able to meet the SCA requirement may also face friction at the checkout, due to the additional steps that customers will have to take to complete their payment. This can cause cart abandonment, reduced conversion rates, lost revenue and reputational damage.

Fortunately, there are steps merchants can take to reduce friction for genuine customers.

Securing the online payments experience

Some transactions are exempt from SCA and merchants can also apply to add exemptions for additional transactions or customers. It’s important for merchants to understand all the various factors and form an exemptions strategy. This will help minimise the number of transactions that have to go through the extra SCA checks and maximise the use of the frictionless flow route for genuine customers.

3D Secure (3DS) can help merchants meet the new authentication requirements set out by the SCA mandate. The latest version of this technology is suitable for both online and mobile channels and can offer a slicker process for shoppers. However, it is possible to use a dynamic approach to 3DS, which uses verified customer data to help recognised, genuine customers, to avoid the additional authentication steps. This, of course, is something that merchants must carefully weigh against the risk of fraud liability and to bypass 3DS, merchants must be able to supply the complete range of required data to the card issuer within the transaction process.

There are also some e-commerce transactions which are out of the scope of the regulation, flag all your out of scope transactions correctly and completely to keep payments flowing as smoothly as possible.

If you’re a TrustPay merchant and have any questions or concerns about SCA, you can review our API manuals for technical details, or get in touch with your account manager to discuss your support needs.

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16. November 2020

Bolster the battle against chargebacks

Health
author: TrustPay
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Fraud is a costly and ever-growing battle for merchants. Every euro, dollar or pound of fraud now costs merchants more than three times as much in associated fees and indirect costs. Unfortunately, the cost of fraud for online merchants is often higher still.

Proactive fraud prevention is, of course, vital. But there will always be a certain level of fraud that slips through the net, and merchants need to do whatever they can to reduce the financial impact. A huge part of this challenge is handling chargebacks. It’s an expensive and resource-hungry process that can cost merchants dearly in fees, scheme fines and even loss of their card processing rights, should high chargeback levels be left unchecked.

Stop chargebacks before they start

Our analysis suggests that around 89% of chargebacks are due to fraud. These transactions are usually flagged by the issuer and fed back as a fraud notification by the card scheme.

Usually, merchants receive a fraud notification around two days after the disputed transaction has gone through. Often, by this time, the defrauded customer has already initiated a chargeback and the merchant has lost the chance to prevent the process from being counted against their chargeback rates.

Difference between fraud date and chargeback date (in days)

Many of these chargebacks can, in fact, be avoided if the merchant’s acquirer is able to flag the fraudulent transaction and initiate a refund at an earlier stage – i.e. before the customer raises a chargeback. In summary, these chargebacks are avoidable. What’s more, according to our analysis, these avoidable chargebacks are a huge proportion of the chargeback volumes that merchants receive

Because acquirers receive fraud notifications at least a day earlier than merchants, these alerts can be used to refund confirmed fraudulent transactions en-masse which has a sizeable impact on preventing chargebacks, without much downside. The sooner the refund happens, the better the chance of preventing a chargeback.

Given how likely it is for a chargeback to happen following a fraud notification, it can save merchants significant costs in chargeback fees and resources to refund these transactions at the earliest possibility.

For example, take a small transaction worth 36 €, the merchant could be looking at a chargeback fee as high as 30 €, compared to a refund of just 1 €. It’s a clear commercial winner and helps to protect merchant reputation and relationships too.

We have already seen that using this proactive refund strategy, it is possible to reduce the chargeback volumes by up to 42%.

How TrustPay can help

We’re pleased to announce the full market launch of TrustPay’s new auto-refund tool designed to help merchants reduce their chargeback burden. The solution has been operational with a handful of our merchants for the last year. It has already delivered a 31% reduction in chargebacks for one merchant customer involved in the pilot programme.

The new auto-refund tool

The auto-refund tool delivers these benefits by proactively and automatically refunding a transaction which has been confirmed as fraud by the card scheme. Since we receive fraud notifications at least a day earlier than merchants, the auto-refund tool can power fast, automated action to be taken on day 1. This saves valuable time and means the customer doesn’t need even to initiate a chargeback.

Following the success of our pilot programme, the TrustPay auto-refund tool is now available to all our merchants across Europe.

If you’re looking to reduce your chargebacks and would like to know more about our auto-refund tool, get in touch with the team.

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22. October 2020

Payments in a pandemic: Why you need to health-check your processes

Health
author: TrustPay
Follow us:

The COVID-19 pandemic has pushed both consumers and businesses to rely on online channels, driving a surge in e-commerce volumes far beyond the increases that were predicted for this year.

With customer demand soaring and many bricks and mortar merchants also ‘going digital’, competition is fiercer than ever and merchants can’t afford to deliver a sub-par customer experience.

The peak shopping season is now fast-approaching, and merchants need to be prepared for further increases in volume as well as for more unusual shopping trends. A big part of this preparation is ensuring payments processes are slick and robust.

An unexpected e-commerce surge

As businesses around the world were forced to close and millions restricted to their homes, consumers turned to e-commerce to get the goods and services they needed. In the second quarter of 2020, global revenue from online sales was 71% up on last year, according to Salesforce’s Shopping Index.

A new Kantar study, covering Europe’s three largest e-commerce markets, showed that the share of consumers that do more than half of their total purchases online has increased between 25 and 80% (depending on age group and location) since the start of the pandemic – and this isn’t showing much sign of slowing down.

The knock-on effect

Now that most e-commerce merchants have overcome the initial shock to the supply chain and logistics demands, it’s important to focus on how best to sustain revenues through these changeable times. This includes making sure that the customer makes the purchase in the first place and ensuring costs and fraud losses aren’t left unchecked.

The right balance of acceptance levels, fraud prevention, and a smooth checkout experience are factors are which are now vital for maintaining strong revenues and conversion rates.

Health-check your payments processes

To help you gauge if your payments processes are putting you in a good position to meet the challenges of 2020 and beyond, we’ve put together a five-point health-check. We recommend you use this list to assess your approach and discuss with your payment provider to see where improvements can be made.

Your five-point checklist

1. Are your website and payments processes robust enough to cope?

Make sure your e-commerce site and your payment gateways can cope with the increased volume, without negatively impacting the customer experience. If the website stalls or the payment process takes too long, you could lose the sale – and potentially lose the customer altogether.

2. Is your payments page optimised?

The checkout process has to be as slick and convenient as possible. This means making sure the right payment methods are available, redirects and scrolling are minimised. The page is simple and clearly branded as well, and that it is optimised for different devices, including mobile.

3. Are your acceptance levels high enough?

Make sure you look at your acceptance levels and monitor them on an ongoing basis. If you’re getting a high volume of declines, you need to understand why – and take action to improve them, to ensure genuine sales are not being turned away. If you’re unsure where to start, talk to your payment provider to get some insight on where your declines are coming from and how you can turn things around.

4. Are your fraud levels low enough?

Higher e-commerce volumes often mean higher rates of attempted fraud – and inevitably higher chargebacks. Both are costly and you need to ensure that your fraud screening process is optimised in line with the latest fraud trends and threats. You also need to make sure your fraud strategies don’t inadvertently block genuine customer orders.

5. Do you need to adapt?

The pandemic has affected which products are being purchased, the fulfilment options customers are choosing, their payment preferences, fraud trends and many other factors. This will also change throughout the next few months as we add the holiday shopping season to the mix. Make sure you benchmark and monitor buyer behaviour. Determine where you might need to adapt your payments or fraud strategies on an ongoing basis.

If you find there are issues in your payments processes, and you need help to address them, get in touch with our merchant services team.

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24. June 2020

Termination of VISA fraud liability protection using 3DS 1.0.2

Health
author: TrustPay
Follow us:

As the ongoing pandemic situation has proved, the digital economy plays an increasing part in all our lives; therefore, it is vital that electronic payments are secure, convenient, and accessible.

Visa, in accordance with the Payment Services Directive 2 (PSD2), aims to contribute to a more integrated and efficient European payments market and ensure a level playing field for all Payment Service Providers (PSPs). As such, it introduces enhanced security measures to be implemented by all PSPs.

To implement these new security measures, TrustPay has already informed our Partners that due to new SCA mandate introduced by Payment Services Directive (PSD2), it is required to update TrustPay gateway integration by the 1st October 2020.

Current protection from fraud disputes

Visa supports the PSD2 requirements for Strong Customer Authentication with 3-D Secure (3DS). 3DS provides secure, compliant, advanced, and convenient electronic payments, and aims to deliver the right balance between security and consumer convenience. Visa Secure is designed to make Visa transactions more secure; as such, it uses the 3DS specification, which enables to authenticate the payer. At present, merchants that authenticate Visa transactions using 3DS 1.0.2 are generally protected from issuer card-not-present fraud-related dispute claims.

What are the changes?

The main change is the new protocol, EMV® 3-D Secure, commonly known as 3DS 2.0. The transition to 3DS2.0 will take place on 17th October 2021.

As a result, from this day on Visa will remove fraud liability protection for merchants on all 3DS 1.0.2 fully authenticated or attempted authentication transactions.

What does it mean to you?

You will be still able to submit transactions through 3DS 1.0.2 for cardholder authentication, however beginning from 17th October 2021, the transactions authenticated by the 3DS 1.0.2. will be open to fraud-related disputes in Visa (chargebacks).

Are any changes to MasterCard transactions?

No, Mastercard will continue to support 3DS 1.0 transactions on the Mastercard Authentication Network up until the final decommission date, which takes place on 14th October 2022. There are no changes to MasterCard 3DS liability protection rules. Liability protection rules will continue to apply to both EMV 3DS and 3DS 1.0 transactions as they do today.

Contact us

For further questions, please contact us via the e-mail address support@trustpay.eu and our colleagues will be happy to advise you.

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17. June 2020

Strong Customer Authentication (SCA) explained

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author: TrustPay
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Strong Customer Authentication (SCA) is a mandate introduced by the Payment Services Directive (PSD2) enacted by the European Commission, which requires electronic payments initiated by the buyer to be authenticated by at least two of the following three factors.

  • Something the cardholder knows (e.g., a password or PIN)
  • Something the cardholder has (e.g., a token, a mobile phone)
  • Something the cardholder is (e.g., a fingerprint or voice match)

1. To whom does SCA apply?

SCA applies to electronic transactions that occur within the European Economic Area (EEA). When you accept cards issued in the EEA, the SCA check must be performed to all in-scope transactions unless exempted by the legislation.

2. Transactions out of scope for SCA

The SCA check is not required for the following transactions:

  • Anonymous payment instrument transactions – Transactions where anonymous payment instrument is used, for example, anonymous prepaid cards.
  • Mail Order/Telephone Order (MOTO) Transactions – Payments transacted over the phone or e-mail.
  • One-leg transaction – Transactions where only one of the payment service providers is located inside the EEA. Since TrustPay is located within EEA, the one leg transactions are the transactions submitted with a card issued outside EEA. PSD2 expects that SCA should be applied for the one-leg transactions on a best effort basis.
  • Merchant Initiated transactions (MIT) – transaction initiated by the merchant, for example, credit fund transfers or repeatable (recurring) transactions, direct debits.

3. E-commerce transactions exempted from SCA

Transaction category Description Applied by
Low-value transactions Electronic payments under €30—and:

  • The cumulative amount of previous electronic payment transactions since the last application of SCA does not exceed €100; or
  • The number of previous electronic payments since the last application of SCA does not exceed five consecutive individual transactions.
TrustPay
Trusted beneficiaries Payers can assign merchants to a whitelist of trusted beneficiaries which is maintained by their bank. Whitelisted merchants are exempt from SCA. Issuer
Secure corporate payments Electronic payments made through dedicated corporate processes initiated by businesses, for example, secure corporate cards. Issuer
Low-risk transactions TrustPay is allowed to request an exemption based on the risk analysis when its fraud rates do not exceed the specified thresholds. TrustPay

4. How is SCA applied to e-commerce transactions?

The Strong Customer Authentication requires that two independent factors need to be initiated (what cardholder knows, has, or is). The security protocol EMV 3-D Secure has been introduced as a tool fulfilling the SCA mandate.

5. What is EMV 3-D Secure?

3-D Secure (3DS) is a customer authentication security protocol, designed to reduce fraud rates and provide security to card-not-present transactions. 3DS1 is already widely used by TrustPay today.

With the event of the SCA mandate, the new version of 3DS protocol was introduced EMV 3-D Secure (3DS 2.1.), and its systems are ready to support 3DS 2.1 as well. At present, TrustPay is preparing their systems to be ready for 3DS 2.2. as well and we will inform you when will be available.

6. How to apply for exemption from SCA?

An issuer will decide whether the SCA is required for exempted transactions or not. In case of exemptions applicable for TrustPay (please, refer to point 3), a merchant can apply for the exemption through the specific exemption flag submitted in the authorization request. How to submit an exemption flag, there will be a separate communication distributed to you.

7. What to do in case of out of scope transactions?

The merchants do not need to take any action in relation to the out of scope transactions. These transactions will be submitted automatically without a need for the SCA check.

***NO DELAY TO SCA DEADLINE***

The impact of COVID-19 on merchants and their Strong Customer Authentication (SCA) preparations has been significant, and the payments industry called for additional time to allow merchants to focus their efforts on SCA again. As a result, the official request for six months long delay was submitted by a couple of payment industry representatives to the European Commission.

We would like to bring to your attention that the European Commission has recently announced that the merchants and payment service providers will be granted no further time to prepare for and comply with the SCA mandate.

Therefore, we would like to assure you that the current deadlines are valid as they were communicated to you before. We encourage you to dedicate enough time and effort to the SCA migration to meet given deadlines. You are required to update your TrustPay gateway integration using the new version of 3-D Secure by October 1st, 2020.

Please refer to the previous TrustPay communications or contact us via the e-mail address support@trustpay.eu and our colleagues will be happy to advise you.

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21. May 2020

Coming This October: Visa High-Brand Risk Merchant Registration

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author: TrustPay
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Already in use by Mastercard, Visa is also introducing new rules for high-brand risk merchants requiring global registration.

Visa will also expand the categories identified as a high-brand risk. This change will become effective on 17 October 2020.

As you already know, Mastercard requires registration of the high-risk merchant types, including sub-merchants of payment facilitators, using the Mastercard Registration Program. Mastercard assesses an annual USD 500 registration fee for each merchant and sub-merchant under the high-risk categories.

 

Visa’s High-Brand Risk Merchant Registration

Now Visa is expanding the existing high-brand risk (HBR) merchant registration program globally and adding categories to the list of merchants warranting additional oversight. During registration, key information about the merchant is gathered and provided to Visa for review such as the merchant’s URL(s), principal identity/identities, business address, dates of site inspection, and approved monthly sales volume.

Registration of the Merchant Category Codes

Starting on 17 October 2020, all HBR merchants must be registered with Visa. The following merchant category codes (MCCs) are classified as high-brand risk and must be registered with Visa:

Transaction type MCC Description
 

 

 

 

 

 

 

Card-Absent
Transactions

MCC 5962—Direct Marketing—Travel-Related Arrangement Services Sale of travel-related services such as timeshares and discount vacation travel clubs via outbound telemarketing calls or mass emailing
MCC 5966—Direct Marketing—Outbound Telemarketing Merchant Sale of products or services using outbound telemarketing; examples include services such as unsolicited tech support desks or credit card protection
MCC 5967—Direct Marketing—Inbound Teleservices Merchant Adult content and services such as website subscriptions and video streaming
MCC 7273—Dating Services Dating and escort-related services such as online classified ads that include escort services or monthly subscriptions to dating websites
MCC 7995—Betting, including Lottery Tickets, Casino Gaming Chips, Off-Track Betting, and Wagers at Race Tracks Funding for games of chance such as placement of wagers on an outcome or purchase of chips at a gambling establishment

 

Transaction type MCC Description
 

 

Cross-Border
Card-Absent
Transactions

MCC 5122—Drugs, Drug Proprietaries, and Druggist Sundries  

Sale of prescription-required drugs

MCC 5912—Drug Stores and Pharmacies
MCC 5993—Cigar Stores and Stands Sale of tobacco-based products such as cigarettes, electronic cigarettes, vaping devices and smokers’ supplies

Overview of High-Brand Risk Activity Requiring Registration

 

High-Brand Risk Activity Requiring Registration

MCC

Transaction type

Cyberlockers and similar remote digital file-sharing services where uploaded content is accessible to the public or the service pays uploaders for content MCC 4816—Computer Network /
Information Services
 

 

 

 

 

Card-Absent
Transactions

Games of skill such as daily fantasy sports gaming where consumers pay a fee to enter and the outcome of the game is determined by skill instead of luck MCC 5816—Digital Goods—Games
Purchase of cryptocurrency, funding of crypto wallets or funding of initial coin offerings (ICO) MCC 6051—Non-Financial Institutions— Foreign Currency, Non-Fiat Currency (for example: Cryptocurrency), Money Orders (Not Money Transfer), Account Funding (not Stored Value Load), Travelers Cheques, and Debt Repayment

TrustPay is already registered as High-Brand Risk Acquirer. To remain compliant with the updated Visa rule, we will register all our existing high-brand risk merchants in April 2021.

Registration fees are USD 500 per merchant annually. The initial registration fee is billed at the time of registration, and annual renewal billing will occur each September beginning in 2022; renewal billing applies to all merchants registered in the previous calendar year. The merchant registration fee is nonrefundable.

4. May 2020

Visa COVID-19 Update: Policy for Subscription Merchants Offering Free Trials

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Visa is updating its acceptance, disclosure and dispute policies for transactions at merchants that offer free trials or discounted introductory promotions as part of an ongoing subscription service.

The changes apply to merchants selling either physical or digital goods and services if they offer free trials or introductory offers that roll into a recurring agreement.

New Visa Requirements

Here is the summary of the new Visa requirements:

  • express consent to entering an ongoing subscription service for recurring payments
  • enhanced electronic confirmation that contains a simple mechanism to enable the cardholder to cancel any subsequent transactions online easily
  • explicit transaction receipts stating the length of any trial period, introductory offer or promotional period, including clear disclosure that the cardholder will be charged unless the cardholder takes steps to cancel any subsequent transactions
  • easier cancellation similar to “unsubscribing” from an email distribution list
  • additional statement descriptor (e.g., “trial,” “trial period,” “free trial”) that appears on cardholder statements
  • expanded dispute rights and updated Visa complaint forms for issuers and cardholders
  • expanded policy for negative option and up-selling merchants

As we are all struggling with the effects the COVID-19 pandemic has on our lives, Visa has decided to postpone some aspects of this new policy change to ease the impact of this situation on the payment system.

 

Enhanced Statement Descriptor

The effective date of the requirement to support an enhanced descriptor for the first transaction at the end of a trial or discounted promotional period will be postponed to 17 April 2021.

 

Disclosure, Notification and Cancellation Requirements

The effective date for the additional aspects of the updated policy will remain 18 April 2020.

Visa’s reasoning is that a significant number of consumers around the world are sheltering in place/at home, and many of them are utilizing subscription services for the first time, often with a trial or introductory promotional discount (e.g., digital content/streaming, delivery of food or other goods). Therefore, it is vital to keep this effective date unchanged.

These additional aspects include:

  • Express cardholder consent for transactions beyond the promotional period, and the requirement for merchants to provide a copy of the accepted terms and conditions to the cardholder at the time of enrollment
  • Reminder notification to cardholder before the end of the trial/introductory promotional discount period
  • Enhanced transaction receipts disclosing the details of the trial/introductory promotional discount period, including clear disclosure that the cardholder will be charged unless the cardholder takes steps to cancel any subsequent transactions
  • Easier online cancellation, regardless of how the cardholder initially interacted with the merchant

 

Visa is taking a pragmatic approach during the COVID-19 pandemic, focusing primarily on situations where payment system integrity is at risk. However, we strongly recommend that you remain compliant with the card scheme rules to avoid unnecessary disputes.

30. April 2020

Mastercard Chargeback Process News Dispute Resolution Management During COVID-19

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author: TrustPay
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The new coronavirus (or COVID-19) has influenced our lives significantly. Not only has it changed the way we live and interact; it has also impacted the way we shop, pay, and accept payments.

Not all goods and services could have been received and enjoyed by us. We are all facing the situation when we have to apply for refunds or substitution of the services we had paid for beforehand.

The Impact of COVID-19 on the Payment Ecosystem

Also, Mastercard is closely monitoring the impact of COVID-19 on the payment ecosystem. The card scheme recognizes the challenges this may have on all participants, particularly when it comes to dispute resolution management. Issuers are strongly recommended to have cardholders attempt to resolve disputes with merchants before processing a chargeback.

On the other hand, acquirers are encouraged to ask their merchants to offer alternatives to the goods or services that cannot be provided, such as vouchers or credits.

Chargeback message reason code 4853 (Cardholder Dispute) governs dispute resolution for most scenarios that will arise from COVID-19-related disputes. This includes, but is not limited to:

  • Goods or Services Not Provided
  • Goods or Services Were Either Not as Described or Defective
  • Credit Not Processed
  • Failed Travel Merchant – Intra-EEA and Domestic European Transactions Only

Suggested Best Practices To Merchants

The following are the best practices that TrustPay suggests to its merchants. Please, read carefully the following advice:

First and foremost, we recommend that you attempt to resolve the disputes in a friendly and flexible manner. The main reason is to minimize the financial impact of this new and challenging situation.

  • We recommend to proactively engage with cardholders who will not receive services and provide cardholders with refunds or reasonable alternatives for future services in order to prevent chargebacks.
  • Where possible TrustPay will take advantage of Mastercard Collaboration pre-chargeback dispute resolution services to enable our merchants to proactively provide a refund to resolve the consumer’s reason for dispute/complaint before the formal chargeback cycle.
  • To pre-empt chargebacks, merchants should consider processing refunds promptly after a cardholder declines a merchant offer for reasonable alternatives.
    Please consider that while you may offer reasonable alternatives for future service when the service has been cancelled, such reasonable alternatives cannot be imposed on cardholders unless properly disclosed in the terms and conditions of purchase.
  • In the case, a cardholder is credited twice (once by the issuer as a result of a chargeback and again through a refund or reasonable alternative), TrustPay will process a second presentment which identifies the refund or reasonable alternative accepted by the cardholder.

FAQ

The cardholder purchased goods/services and the merchant will not be able to provide the goods/services. Does an issuer have chargeback rights?

Yes. There is a chargeback right when goods/services are not provided, including when they are cancelled due to government restrictions, insolvency or other exceptional circumstances.

 

The date of an event (e.g. concert, sports event) was changed or postponed due to COVID-19 restrictions; however, the cardholder cannot or does not want to attend on the new date. Does an issuer have chargeback rights? 

Yes. There is a chargeback right when services are changed or postponed and this is not accepted by the cardholder. Cardholders are not obligated to accept reasonable alternative services unless required by the merchant terms and conditions properly disclosed to the cardholder at the time of the purchase.

 

The merchant declines to process a refund for cancelled services citing a “Force Majeure” clause in the merchant terms and conditions properly disclosed to the cardholder at the time of purchase. Does an issuer have chargeback rights?

Mastercard will honor merchant terms and conditions properly disclosed to the cardholder at the time of the purchase. Due to the complexity of contractual disputes including the applicability of clauses like “Force Majeure” to COVID-19, Mastercard’s review and ultimate determination of these disputes will be fact-specific.

 

The cardholder has ordered goods to be delivered but they have not arrived by the scheduled or mutually acceptable extended delivery date. For example, the merchant has shipped the goods but due to quarantines or travel delays, the package has not arrived. Does the issuer have chargeback rights?

Yes. As always, the merchant is responsible for ensuring the goods reach the cardholder by the latest expected delivery date. If the goods are expected to arrive late, issuers are encouraged to ask the cardholder for patience and flexibility to avoid the need for a chargeback.

 

Reasonable Alternatives for Future Services

The merchant has cancelled services and offered the cardholder a reasonable alternative for future service. Does Mastercard prohibit this?

Mastercard is supportive of these efforts and encourages acquirers to recommend such practices to their merchants. Ultimately, if an amicable resolution can be reached between the cardholder and the merchant, this will be beneficial to the entire payment ecosystem during this difficult situation.

 

The merchant has cancelled services and offered the cardholder a reasonable alternative for future service. The cardholder declines this reasonable alternative but the merchant refuses to process a refund. Does an issuer have chargeback rights?

Yes. Reasonable alternatives for future services cannot be imposed on the cardholder in lieu of a refund unless the merchant has a right to provide the cardholder with such reasonable alternatives based on the terms and conditions properly disclosed to the cardholder at the of the purchase, or based on applicable legislation or government regulations that should be provided in the dispute documentation.

 

The merchant has cancelled services and offered the cardholder a reasonable alternative for future service. The cardholder does not want this reasonable alternative but the merchant refuses to process a refund citing legislation or government regulation. Does an issuer have chargeback rights?

Mastercard will review and factor in relevant and applicable legislation or government regulation aimed at addressing COVID-19 disputes. For example, the cardholder may need to accept a voucher in lieu of a refund if a government.

 

The merchant has cancelled services and the cardholder has accepted a reasonable alternative for future service from the merchant. Does an issuer have chargeback rights if the merchant later becomes insolvent and the reasonable alternative cannot be used?

Yes. By accepting the reasonable alternative for future service, the cardholder and merchant have agreed to new terms and conditions for the same purchase transaction, which is still considered a Mastercard transaction.

 

In any case and scenario, should you have any further inquiries, do not hesitate to contact your Account Manager.

#weareinthistogether

2. March 2020

Mastercard Chargeback Programs: 2020 Update

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author: TrustPay
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Mastercard has announced updates in its fraud and chargeback merchant compliance programs. Take the opportunity to be familiarized with these new standards.

Quite recently, Mastercard has announced updates in its fraud and chargeback merchant compliance programs.

We would like to take the opportunity to familiarize you with these new standards.

Excessive Fraud Merchant

New updates to the Mastercard Excessive Fraud Merchant (EFM) Compliance Program has become effective. These changes are in effect globally, including Europe with the exception of merchants in Germany, Liechtenstein, and Switzerland.

Background of the EFM Compliance Program

The EFM Compliance Program helps reduce fraud for e-commerce transactions and secure the ecosystem, providing a better experience for cardholders and ultimately an increase in approval rates for all participants. The Program measures compliance at the merchant ID (MID) level and sends the notifications and potential financial assessments to the acquirer.

Overview of Revised Standards

The Program will be updated to include two separate compliance frameworks that will be used globally, one framework for regulated countries* (see Appendix below) and a separate framework for non-regulated countries** (see Appendix below), where the term non-regulated refers to those countries without a legal or regulatory requirement for strong cardholder authentication.

The only difference between the two frameworks will be the 3-D Secure (3DS) percent threshold.

EFM Monthly Criteria
Number of Transactions Fraud Chargeback Amount Fraud Chargeback Basis Points 3DS Utilization
(including Data Only Tax)
1,000 or more EUR/USD 50,000 or more 50 or more • Less than 10% (Nonregulated Countries)
• Less than 50% (Regulated Countries)

Excessive Chargeback Merchant

Excessive Chargeback Merchant (ECM) program monitors merchants that receive an excessive number of chargebacks on a monthly basis. Merchants will be evaluated under two categories—Excessive Chargeback Merchant (ECM) and High Excessive Chargeback Merchant (HECM). Mastercard automatically tracks chargebacks for all transactions through network data and notifies acquirers when an individual merchant ID has breached the compliance threshold.

EFM and HECM Monthly Criteria
Monthly Criteria Number of Chargebacks Basis Points
ECM 100 to 299 150 to 299
HECM 300 or more 300 or more

Mastercard has already started monitoring transactions for EFM and ECM violations, therefore we kindly remind you to stay focused on your transaction compliance as the assessment fines are rather high:

Any Merchant ID exceeding the EFM threshold will be fined EUR 25 000.

The EFM Assessment will depend on the number of months above EFM thresholds. The fines start at EUR 500 for two months of noncompliance and may reach up to EUR 100,000 (for 19+ months).

Please reach out to us if you need more information regarding these two programs or anything else relevant to chargebacks.

Appendix 1: Regulated and Non-regulated countries

Below are some examples of regulated and non-regulated countries. For the complete list please email your Account Manager.

Europe Region

Regulated Countries

Austria Gibraltar Netherlands
Belgium Greece Norway
Bulgaria Hungary Poland
Croatia Iceland Portugal
Cyprus Ireland Romania
Czech Republic Italy Slovakia
Denmark Latvia Slovenia
Estonia Lithuania Spain
Finland Luxembourg Sweden
France Malta United Kingdom


Non-Regulated Countries

Albania Israel Serbia
Andorra Kazakhstan Tajikistan
Armenia Kosovo Turkey
Azerbaijan Kyrgyzstan Turkmenistan
Belarus Macedonia Ukraine
Bosnia and Herzegovina Moldova Uzbekistan
Channel Islands Montenegro Vatican City
Georgia Russian Federation
Isle of Man San Marino


United States Region

The United States is a non-regulated country.

17. February 2020

Mastercard’s Chargeback and Fraud-related Disputes

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author: TrustPay
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Mastercard is enhancing the chargeback process by making it easier and faster to handle disputes to improve the dispute handling processes.

Similarly to Visa, Mastercard has also announced plans to eliminate fraud. At the same time, Mastercard is enhancing the chargeback process by making it easier and faster to handle fraud-related disputes (we have already published news about the Mastercard Dispute Resolution Initiative in one of our previous articles).

Improving the Mastercard’s chargeback and fraud-related disputes

Its objective is to improve the Mastercard dispute handling process by automatically detecting invalid disputes, shortening dispute resolution timeframes and updating some dispute reason codes and their conditions.

“TrustPay automatically represents all invalid chargebacks.”

One of such changes is that chargeback reason code 4863 (Cardholder Does Not Recognize—Potential Fraud) will be eliminated deleted from the revised chargeback rules on or after 17 April 2020. This means that the first chargebacks will no longer be allowed and will be invalid.

Already, TrustPay automatically represents all invalid chargebacks.

Other reason codes for fraud-related chargebacks

However, there are still other reason codes for fraud-related chargebacks. Therefore, it is good to remind you when some of these must not be processed at all.

A No Cardholder Authorization chargeback must not be processed for any of the following:

  • Authorization Approval after the Fraud Notification Service (FNS) Date
  • The issuer approved the transaction after submitting two or more chargebacks involving the same Mastercard card account for any of the following message reason codes: 4837, 4840, 4870, or 4871.
  • FNS Counter Exceeds 15 Fraud-Related Chargebacks. The issuer submitted more than 15 chargebacks in aggregate involving the same account.
  • Transactions resulting from an account takeover and subsequently reported to SAFE as such.
  • Correctly identified Mastercard.
  • Digital Goods less than or equal to USD 25. An e-commerce transaction that was less than or equal to USD 25 (or the local currency equivalent) for the purchase of digital goods resulted because the merchant did not offer purchasing control settings to the cardholder when the cardholder created an account with the merchant.

In case such chargeback falls through the Mastercard elimination tool TrustPay will detect it and represent it on your behalf.

Furthermore, you can increase your chance for successful chargeback representment by providing us with compelling evidence that supports your arguments about cardholder participation in the transaction.

Compelling Evidence for E-commerce Transactions

At least one of the following documents and, when necessary, an explanation is accepted by Mastercard as compelling evidence:

  • Copies of written correspondence exchanged between the merchant and the cardholder (such as letter or e-mail) showing that the cardholder participated in the transaction;
  • The initial transaction was a Digital Secure Remote Payment (DSRP) transaction or was SecureCode-initiated;
  • Description of the goods or services purchased in the initial transaction;
  • Date and authorization approval code for the initial transaction; and
  • The initial transaction was not disputed
  • When a merchant requires a cardholder to register prior to completing a purchase, the merchant must provide documentation confirming the cardholder or authorized user is registered to purchase goods with a password and must provide one or more of the following documentations:
    • The cardholder or authorized user completed other undisputed purchases before, or after, the alleged fraudulent transaction
    • The cardholder or authorized user completed the disputed transaction from a registered device and IP address
    • Details of the purchase
    • Signed proof of delivery
    • E-mail addresses to support digital download delivery
  • The cardholder or authorized user registered the disputed goods or services (for example, registration for purposes of warranty or future software updates).
  • The disputed goods or services used.
  • A fully enabled SecureCode transaction was used to register a PAN for a future transaction.

If you want to get more information regarding the Mastercard dispute resolution or want to learn more about successful chargeback representment, please, do not hesitate to contact us.

3. February 2020

Mastercard Chargeback Process & Updates

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author: TrustPay
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Similarly to Visa’s VCR (Visa Claims Resolution) Mastercard has announced it is also updating and simplifying its chargeback processes.

At first sight, the chargeback processes of the two card associations are very much alike, the only difference being the terminology they use. Here is what Mastercard’s chargeback process looks like:

  1. First Presentment – cardholder’s purchase, i.e. original transaction.
  2. First Chargeback – disputed transaction (by cardholder or issuer). The disputed funds are withdrawn from your merchant account and transferred back to the cardholder’s account.
  3. Second Presentment – merchant resubmits the transaction with evidence to counter the chargeback.
  4. Second (Arbitration) Chargeback – provided evidence does not resolve the cardholder – merchant dispute and the issuer charges the transaction back to the acquirer.

Arbitration

The parties involved could not reach an agreement; thus Mastercard will resolve the dispute in an arbitration process.

Recently, Mastercard has announced its plans to enhance the capability to prevent invalid disputes from entering the Mastercard Network, as well as expediting and simplifying the dispute resolution process.

This initiative has rolled out in three phases:

12 October 2018

Mastercard requires cardholder letter or email as supporting documentation in first chargebacks for chargeback reason code 4863 (Cardholder Does Not Recognize). Documentation must be a direct result of cardholder communication. Cardholder letter, email or a form will also be required for Disputes reason codes involving Digital Goods and Recurring Payment transactions.

12 April 2019

Mastercard reduces first chargeback timeframes from 120 days to 90 days for reason code 4834 Point of Interaction Error disputes. Fraud, Authorization-related, and Cardholder Disputes chargeback time frames remain unchanged.

Chargeback rights for these reason codes have been eliminated and invalid:

  • 4840 (Fraudulent Processing of Transactions)
  • 4863 (Cardholder Does Not Recognize)

Unjust enrichment associated with credits issued before or after a chargeback and/or after a second presentment will not be allowed via a pre- or compliance case and must be resolved via the chargeback management process.

17 April 2020

The arbitration chargeback cycle will be removed. As part of this change, some Fraud and Cardholder Dispute situations, such as requiring or involving progressive letters and expert opinion letters, will be required as part of the pre-arbitration process.

Notwithstanding these changes, the merchant chargeback response process is remaining the same, and we will continue to support you through it. Please, remember that a detailed chargeback rebuttal letter and compelling evidence need to be submitted to us within the given deadlines (typically 5 business days).

In case you have any questions regarding the Mastercard dispute resolution process, do not hesitate to contact your Account Manager.

21. January 2020

Visa Free Trial & Subscription Merchants Update: FAQ

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author: TrustPay
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Effective 18 April 2020, Visa is updating acceptance, disclosure and dispute policies for transactions at merchants that offer free trials or introductory promotions as part of an ongoing subscription service.

To help you better understand these new rules, below are answers to some of the frequently asked questions.

Do the changes apply to only physical goods merchants?

No. The changes apply equally to merchants selling either physical or digital goods and services if they offer free trials or introductory promotions that roll into an ongoing subscription/recurring agreement.

Do the changes apply to all merchants that offer subscription/recurring agreements?

No. Not all merchants that offer subscription/recurring agreements include free trials or introductory promotions. The changes apply only to merchants that offer free trials or initial promotions that roll into an ongoing subscription/recurring agreement.

What is the enhanced descriptor for? Where is it required?

The enhanced descriptor (e.g., “trial”, “trial period”, “free trial”) is to be included in the Merchant Name field of the clearing record for the first transaction at the end of a trial period. It is not required for subsequent transactions.

This descriptor will then appear on cardholder statements, online banking, mobile apps and SMS/text alerts. In the same way, discretionary data or additional invoice/order numbers appear for e-commerce transactions today, to identify the nature of the transaction.

What if the customer doesn’t want electronic notifications or reminders?

Visa’s updated rules will require the merchant to notify the cardholder at least seven days ahead of the expiration of their trial/promotional period, along with a link or other simple mechanism to cancel the subscription, either online or via SMS/text message.

The notification/reminder should be electronic (i.e., via email or SMS/text). It can be possible via another method of communication if the cardholder agrees in advance.

What if the trial/promotional period is less than seven days?

If the merchant’s trial/promotional period is less than seven days, the initial confirmation provided to the cardholder should include the details required in the reminder (i.e., date of expiration of the trial/promotional period, link or another simple mechanism to cancel the subscription).

What does “simple cancellation” look like? Is there a maximum number of steps/clicks?

No. The customer must be able to cancel their subscription online with the merchant without needing to contact the merchant through another channel (e.g., a phone call). Merchants may continue to support other channels for customer service, including cancellation requests, in addition to an online service.

If the above FAQs does not answer your questions, do not hesitate to contact your Account Manager for more detailed information on this Rule update.

7. January 2020

Subscription Merchants: Updates to Free Trials and Negative Option Billing

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author: TrustPay
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From April 2020, Visa will update its rules and requirements for free trials applying equally to merchants selling physical or digital goods, and services.

Starting in April 2020, Visa will update its rules and requirements for free trials. The changes apply equally to merchants selling either physical or digital goods and services if they offer free trials or introductory offers that roll into an ongoing subscription/recurring agreement.

This change is following Mastercard’s revised standards for high-risk negative option billing merchants that were announced in January last year.

There are already existing rules in place, including express, informed consent from customers after required disclosures and a simple cancellation mechanism.

Mastercard: Update effective since April 2019

Mastercard has already updated its requirements regarding high-risk negative option billing merchants. One of them is that the acquirer registers negative option billing merchants that provide a physical product (as opposed to digital goods).

The merchant must request the cardholder’s authorisation and obtain explicit consent for the payment amount before initiating the authorisation request after the trial period for a product has ended, but before the cardholder makes any additional payments.

The authorisation request must contain the following information:

  • The payment transaction amount
  • The payment date
  • The merchant name as it will appear on the cardholder’s statement
  • Instructions for cancelling the subscription at the cardholder’s discretion

Additionally, each time that the merchant attempts an authorisation transaction, the merchant must send a receipt to the cardholder electronically that includes instructions on how to cancel the subscription service or recurring billing cycle.

Visa: Acceptance, disclosure and cancellation policies update

Effective 18 April 2020, Visa will implement Rules update to address free trials more efficiently. The changes are designed to promote an enhanced cardholder experience; enable issuers to identify these transactions clearly, and bring more transparency to the requirements of the dispute.

Visa Rules Update Summary

The summary of these changes includes:

  • express consent to entering an ongoing subscription service for recurring payments
  • enhanced electronic confirmation that contains a simple mechanism to enable the cardholder to cancel any subsequent transactions online easily
  • explicit transaction receipts stating the length of any trial period, introductory offer or promotional period, including clear disclosure that the cardholder will be charged unless the cardholder takes steps to cancel any subsequent transactions
  • easier cancellation similar to “unsubscribing” from an email distribution list
  • additional statement descriptor (e.g., “trial,” “trial period,” “free trial”) that appears on cardholder statements
  • expanded dispute rights and updated Visa complaint forms for issuers and cardholders
  • extended policy for negative option and up-selling merchants

It should also be noted that specific documentation requirements will be implemented to protect merchants that have acted appropriately.

TrustPay works closely with the card schemes to help merchants better understand their requirements and stay compliant with the new rules updates. Therefore, if you have any additional questions regarding these changes, do not hesitate to contact your account manager.

10. December 2019

Fraud-related Disputes (VISA)

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author: TrustPay
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Fraud-related chargebacks make up the majority of all chargebacks TrustPay’s merchant receives. Take a closer look at fraud-related disputes (Visa).

Fraud-related chargebacks make up the majority of all chargebacks TrustPay’s merchant receives; they make up almost 90% of the grand total of the chargebacks we get.

Herein, we shall take a closer look at fraud-related disputes as processed by Visa.

Visa Resolve Online

Since April 2018, all disputes are processed by means of Visa Claims Resolution VCR and they are moderated by Visa’s own automated tool, Visa Resolve Online (VROL). This means that Visa will proactively provide an automated dispute decision based on the Visa rules. Hence the dispute process is more data-driven and disputes can be blocked before they happen.

An example of such a decision-making process is how following rules are enforced to block invalid card-not-present disputes from entering the system:

Maximum Fraud per Account

Visa puts a limit (35) on the number of card-absent fraud disputes that can be processed on a single account number within a 120-day time period.

Block Future Fraud If Account Not Closed

It is up to the issuer to decide if they wish to close an account once fraud is reported. However, failure to close an account prevents the issuer from initiating fraud disputes on any new transactions on that account, across all merchants.

Even so, should TrustPay spot a chargeback that has fallen through this elimination process, e.g. fraud chargeback that was filed past the 120-day chargeback period, such chargeback will be represented by TrustPay without any request from the merchant.

Additionally, acquirers and merchants still can respond to the fraud-related disputes and represent the chargeback, under certain conditions.

Such conditions are for example:

  • Cardholder No Longer Wishes to Dispute
  • Compelling Evidence
  • Credit Processed (transaction was refunded before it was charged back)
  • Invalid Dispute (e.g. past 120-day chargeback period)

Compelling Evidence

Merchants can still contradict the fraud-related chargeback with proof of the validity of the original transaction. Here are some examples of Visa’s accepted compelling evidence:

For a transaction representing the sale of digital goods downloaded from a Merchant’s website or application, the proof can be a description of the merchandise or services successfully downloaded, the date and time such merchandise or services were downloaded, and two or more of the following:

  • Purchaser’s IP address and the device geographical location at the date and time of the Transaction
  • Device ID number and name of the device (if available)
  • Purchaser’s name and email address linked to the customer profile held by the Merchant
  • Evidence that the profile set up by the purchaser on the Merchant’s website or application was accessed by the purchaser and has been successfully verified by the Merchant before the Transaction Date
  • Proof that the Merchant’s website or application was accessed by the Cardholder for merchandise or services on or after the Transaction Date
  • Evidence that the same device and Card used in the disputed Transaction were used in any previous Transaction that was not disputed

Recurring Transaction

For a Recurring Transaction, all of the following:

  • Evidence of a legally binding contract held between the Merchant and the Cardholder
  • Proof the Cardholder is using the merchandise or services
  • Evidence of a previous Transaction that was not disputed

If you want to learn more about successful chargeback representment, please, contact us.

20. November 2019

TrustPay Virtual IBANs: Why IBAN and Why Virtual?

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author: TrustPay
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Only one account in online banking, cost-effectivity, transparency, fast money transfer, no lost payments. Get the benefits of Virtual IBANs.

The International Bank Account Number (IBAN) is an internationally agreed system of identifying bank accounts to facilitate the processing of cross border transactions.

While in the traditional banking you need an IBAN per account, in the virtual world of transaction processing it is enough to have a single “real” IBAN per (company) master account and multiple “virtual” IBANs, each per (company’s) customer or contract.

What are the benefits?

There are several benefits of the virtual IBANs you can enjoy:

  1. Ease of management of just one account in online banking.
  2. Cost-effectivity. You only pay account fees for a single account, not multiple accounts.
  3. You know who is paying for what.
  4. No lost payments. There are no bank references nor variable symbols to be filled in by your customer.
    A virtual IBAN allows the rerouting of incoming payments to another, physical master account.
  5. Fast money transfer. All of the virtual IBANs issued by TrustPay are EUR denominated SEPA accounts.
    Thus, you can accept same-day payments throughout Europe at almost no cost to your customers.
  6. Save time of your clients. They only need to remember and save a single IBAN to send money to.
  7. Simple reconciliation. All IBANs maintain a zero balance at all times. All incoming payments to virtual IBANs are credited to your main account with TrustPay. You only ever have to reconcile the main account!
  8. Centralized transaction management and overview.

How do you get these Virtual IBANs for your customers?

Simply. You create and close virtual IBANs via our modern API Banking; no human interaction is needed. Our API banking also allows you to download statements and receive real-time notifications about your inbound transfers.

Do you need help or more information? If you are interested in this solution, please, contact your TrustPay Account Manager, or contact our Sales Department at sales@trustpay.eu.

6. November 2019

Visa Claims Resolution

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author: TrustPay
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With the number of disputes arising, and processing time and costs increasing, Visa has introduced the more efficient way of chargeback processing, meaning the shortening and simplifying the dispute-resolution process, with historic chargeback reason codes being consolidated under four groups only.

What is new?

The dispute elimination process is automated.

Under VCR, Visa will identify and block disputes that do not meet the necessary criteria for the selected dispute category; for example, if a chargeback has been filed after a certain time limit.

Chargeback reason codes are consolidated.

The previously recognized 22 chargeback reason codes are now consolidated into 4 dispute categories and new reason codes (RC):

  1. Fraud (RC 10)
  2. Authorization (RC 11)
  3. Processing errors (RC 12)
  4. Consumer disputes (RC 13)

Providing merchants with simplified dispute categories should simplify and streamline the dispute process.

All disputes follow one of two new processes:

Allocation

Reserved for fraud and authorization disputes. In this case, Visa will determine an initial liability assignment in real-time. Acquirers and merchants will have the ability to respond under certain conditions (e.g., compelling evidence, invalid data, credit issued, and evidence of a manual imprint). Again, Visa has automated the dispute eliminating process and put various automated checks in place (e.g. check for 3D Secure flag in fraud-related chargebacks).

Collaboration

Reserved for cases where interaction between merchants, acquirers and issuers is still required (processing error and consumer disputes). This process remains similar to the previously known chargeback process; however, the timeframes are reduced from approximately 45 days to 30 days on average, and communication between the involved parties should become more efficient.

 

Use of Compelling evidence

An Acquirer may submit compelling evidence with a dispute response. Examples of allowable compelling evidence include:

  • Evidence, such as photographs or emails, to prove a link between the person receiving the merchandise or services and the Cardholder
  • For an Electronic Commerce Transaction representing the sale of digital goods downloaded from a Merchant’s website or application, description of the merchandise or services successfully downloaded, the date and time such merchandise or services were downloaded, and 2 or more of the following:
    • Purchaser’s IP address and the device geographical location at the date and time of the Transaction
    • Device ID number and name of the device (if available)
    • Purchaser’s name and email address linked to the customer profile held by the Merchant
    • Evidence that the profile set up by the purchaser on the Merchant’s website or application was accessed by the purchaser and has been successfully verified by the Merchant before the Transaction Date
    • Proof that the Merchant’s website or application was accessed by the Cardholder for merchandise or services on or after the Transaction Date
    • Evidence that the same device and Card used in the disputed Transaction were used in any previous Transaction that was not disputed

More details on applicable compelling evidence will be provided to you by your TrustPay account manager.

Arbitration

When a dispute cannot be solved on the chargeback-and-representment level, Acquirer and Issuer request Arbitration decision from Visa. No new documentation that was previously not submitted to the opposing party may be provided to Visa at this stage.

Best Practices for arbitration, among others:

  • Always respond when Visa requests additional documentation/information from you for their arbitration ruling. Failure to do so could result in an unfavourable ruling. Visa suggests to frequently monitor queues in User Interface for case updates.
  • Always respond when Visa requests additional documentation/information from you for their arbitration ruling. Failure to do so could result in an unfavourable ruling.

Compliance

Compliance disputes can be initiated by both issuers and acquirers. Unless otherwise specified, merchant’s or cardholder’s bank may file for Compliance if all of the following occur:

  • A violation of the Visa Rules occurred that is not related to an Account Data Compromise Event.
  • The Acquirer or the Issuer has no Dispute, Dispute Response, or pre-Arbitration right.
  • The Acquirer or the Issuer incurred or will incur a financial loss as a direct result of the violation.
  • The Acquirer or the Issuer would not have incurred the financial loss had the violation not occurred.
  • The Acquirer or the Issuer made a pre-Compliance attempt to resolve the dispute.
10. October 2019

TrustPay Introduces New Payment Gateway to Merchants

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author: TrustPay
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TrustPay brings a new version of payment gateway according to up-to-date trends and technologies. The payment gateway now provides all merchants with more comfort regarding the implementation, payment overview, and transaction processing while offering their customers better, faster, and more secure payments online.

Customers can pay for goods and services online even more comfortably and securely. Instead of being redirected to a new payment page, the customer stays on the merchant’s website. Also, the payment form shows as a pop-up that’s fast, convenient and less time-consuming with every payment.

New payment gateway

The payment gateway offers a few significant advantages, including style and colour customization. First, merchants may upload their logo on the payment form instead of the TrustPay logo. Merchants may customize and modify the gateway’s design according to their brand, website or just the way they like. The payment form has a variable design and it’s entirely customisable for every merchant.

Besides the new redesign, payment notifications are more precise with all the details providing more information and specifics about every single payment.

A new payment gateway with original API documentation is now available for all existing and new clients of TrustPay without additional fees.

Richard Tési, Deputy CEO, commented: “Our constant goal is to provide clients with innovative products that improve the user experience, optimize and streamline merchant processes, and increase online payment security. Our new payment gateway is an excellent example of meeting these goals.”

Having any questions regarding the new gateway? Contact us at info@trustpay.eu.

If you want to get more knowledge on the latest updates issued by Visa, read the full article here to be familiar with the new Visa fraud and chargeback rules update with new thresholds applied improving the Visa Fraud Monitoring Program (VFMP) and the Visa Chargeback Monitoring Program (VCMP).