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):
- Fraud (RC 10)
- Authorization (RC 11)
- Processing errors (RC 12)
- 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:
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).
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.
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 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.