With card payment disputes rising, costs and processing times increasing, Visa is introducing the Visa Claims Resolution (VCR).
How will Merchants Benefit?
Over the years, Visa has made significant changes in chargeback rules to have consistent rules for merchants and acquirers globally. To help improve the efficiency of handling chargebacks, Visa has focused on simplifying and shortening the dispute-resolution process whilst keeping pace with the needs of the payment industry.
The VCR simplifies the dispute process by migrating from a litigation-based model to a liability assignment model. Visa will leverage the existing data and use the Visa global dispute platform, Visa Resolve Online (VROL), to simplify processing the disputed transactions.
Visa will identify and block disputes that do not meet the necessary criteria for the selected dispute category. For example: proper fraud reporting, approved authorisations, fraud disputes on new authorised transaction after a fraud dispute or fraud report on the same account. This added layer protects the integrity of the dispute ecosystem and will reduce the number of disputes processed by clients.
Visa will reduce the processing timeline, touchpoint and processes involved in the dispute resolution through proposing:
• Allocation – For most authorisation and fraud disputes, VROL will determine the initial liability assignment in real-time. Acquirers and merchants respond under certain conditions (e.g. invalid data, credit issued, compelling evidence, and evidence of a manual imprint).
• Collaboration – While most disputes may fall under the category of allocation, a subset will require interaction between merchants, acquirers and issuers. Through a concept called collaboration, VCR will reduce the timeframes and simplify this communication.
Reduced resolution timeframe, a typical dispute currently takes around 46 days to resolve, with some of the more contentious issues taking more than 100 days. The new process will provide more efficient processing and some cases less need for multiple back and forth cycles to exchange documentation and information, allowing for quicker dispute resolution. The new process is expected to reduce time and resources. Visa expect to resolve most disputes within 31 days, benefitting merchants, cardholders and clients.
The updates process will reduce unnecessary processes by removing invalid disputes. By becoming more efficient, merchants can focus on value added tasks and dedicate their time to providing other services to their clients.
Merchant Purchase Inquiry
The Integrated Merchant Purchase Inquiry is a simple, easy to implement plug-in to Visa’s globally used dispute platform VROL.
The solution allows merchants to avoid disputes through where additional data elements pertinent to decision making are provided to issuers at the beginning of the dispute process. Eliminating potential disputes from becoming a chargeback will yield significant cost savings for merchants and issuers.
How it Works
1. Issuer tags the request as unrecognized and requests more information
2. Visa confirms merchant participation in Visa’s Integrated Merchant Purchase Inquiry solution
3. Visa sends a request to the merchant for additional data
4. Merchant runs internal rules to determine the best response
5. Merchant sends one of the following responses2
– Respond with additional data – provides transaction-specific data such as a description of goods purchased or device used
– Respond with customer credit – allows you to credit the cardholder prior to receiving a chargeback
– Respond with additional data and a credit
6. The response is forwarded to the issuer