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Your Dispute Strategy in Action

By now, sellers realize that the consumer trend away from in-store shopping and toward e-commerce is not going to reverse any time soon. In fact, a recent study reported that 44% of global consumers now purchase physical goods online.¹

With so much new online purchasing and so many businesses moving online, are CNP sellers developing the right dispute strategies to manage this new payments landscape? Are they deploying the right technology? Do they have the right processes in place? And are they testing to make sure their dispute strategy is effective? Knowing the answers to these questions is essential for any CNP business that wants to minimize the impact of disputes.

Analyze Your Dispute Threat and Secure Your Defenses

Whatever tactics you may have currently implemented to reduce the risk of disputes, it’s best to begin by examining them and their effectiveness. While you may have best-known tools to prevent and reduce the risk of fraud, no matter what efforts you make in the early part of the transaction life cycle, first-party fraud or friendly fraud can be seen as a path that some bad actors take to game the system. When a customer commits first-party fraud or friendly fraud, they are disputing a valid transaction they don’t recognize – or claim not to. In both cases, the purchases are legitimate. The difference with the latter case is that these customers are intentionally challenging legitimate purchases as fraudulent to regain funds. In fact, in a recent survey report, 16% of consumers who were contacted admitted to perpetrating friendly fraud² – adding a cautionary note that this number is likely conservative. This statistic sends a clear message that sellers need to apply dispute management tactics in the post-purchase environment to reduce friendly fraud and the resulting disputes.
Start by looking for gaps in your payment processes with vulnerabilities to fraud and disputes. Are you using authentication tools to stop fraud and defer liability? Are you identifying disputes stemming from dissatisfaction with products or services? Are you collecting the best evidence for dispute responses and revenue recovery? Find the holes and fill them before stress-testing your strategy.
Every dispute management strategy is unique, and each seller has specific needs and goals.
Consider the following tactics to help test and strengthen your dispute strategy to better protect your business throughout the payments life cycle:

Pre-Authorization

At the pre-authorization stage, the seller’s objective is to find the right balance between fraud prevention and authorizations to meet revenue targets. Different categories of sellers will have different business needs, so it’s important for each seller to determine the mix of fraud prevention and authorizations that works best for their business and test against it. As an example, high-risk sellers with subscription-based businesses or that deal in intangible goods may experience larger dispute volume. These businesses may consider decreasing their fraud prevention measures to allow more authorizations, thereby spreading the cost of disputes over a larger revenue figure.

Post-Transaction

After the customer has made their purchase, sellers can sometimes feel powerless to prevent a dispute, should the customer choose to file one. Fortunately, there are actions sellers can take and solutions to reduce risk provided by the right partner. The first tactic is post-purchase outreach and communication. Follow up any transaction with a confirmation email, tracking information, and/or delivery status. To ensure your communications are effective, check email open rates, click-through rates, and A/B test subject lines. Additionally, collaborate with your customer service to capture their findings on customer responses and success metrics.
As a best practice, sellers should be proactive about communicating service policies for returns/refunds and T&C to customers by including these policies in post-transaction communications or even during checkout as a condition for completing an order. However you choose to surface your policies, they should also be clearly displayed on your website and easy to find. Measuring the amount of traffic leading to your policy pages can indicate the potential for their visibility to your customers. If traffic to policy pages is low compared to the amount of customer service interaction on issues involving service policies, then sellers may need to increase visibility on their policy web pages to help reduce operational strain.

The goal is to convince your customer to work with you instead of their bank if there’s an issue with the customer’s transaction. When the customer does contact you, ensure to have processes in place to offer a refund or credit voucher to save the relationship. Another tactic is to take advantage of seller-issuer collaboration technologies. These solutions can enable sellers to engage with quick responses to prevent the dispute, provide a resolution, or accept liability to potentially fight the dispute later. Such collaboration solutions involve a level of automation to help identify transaction information to prevent a dispute at inquiry, as well as provide a quick resolution by refund, if warranted, stopping a chargeback from ever occurring.

Dispute Response & Recovery

When it comes to chargebacks, sellers are simply leaving money on the table. Chargebacks don’t have to be accepted as just part of doing business. If you know that you’ve made a valid sale, then it’s worth the effort to recover revenue that you’ve rightfully earned. With the right resources and know-how, an in-house dispute management team can build effective dispute responses to recover funds. Third-party services, however, can do the heavy lifting for you, employing expert tactics to aggregate dispute source data, assemble the best-case evidence, and prepare and deliver dispute responses in the proper time frame.

To decide whether to represent in-house or outsource, sellers must measure operational cost against the cost of a third-party service. Sellers must calculate human capital, benefits, and overhead operational costs – not just payroll – before making a decision.

Sellers should also consider their overall representment rate. For example, what is the percentage of chargebacks that are being represented out of the total number of chargebacks received? By reviewing the total number of chargebacks, there may be opportunities to increase revenue recovery by representing more cases. In addition, consider the net win rate of your chargebacks vs. your gross win rate. After all, customers can resubmit a dispute even after successful revenue recovery.

Whether your dispute management is performed in house or by a partner, these tips can help maximize your recovery wins:

A/B test response packages with multiple acquirers for insights on which formats work best for response wins.
Use reports from dispute case management tracking to understand fraud and reason codes that might cause most common dispute cases, then update operations to prevent them.
From your CRM and dispute source data, identify customers who are disputing transactions and why. If necessary, block from future transactions.

Refine Your Dispute Strategy, Test Again

Your dispute strategy will never be finished. As long as the payments landscape keeps shifting, your dispute strategy must be ready to accommodate those changes. That means constant review of your tactics. Are your security measures creating too much friction and causing missed sales opportunities? Are your measures too lax and allowing too much fraud through? How many representments are you acting on, and can you do more? Are there seasonal spikes in your chargebacks? Answers to these questions and more will inform how you adjust for the best possible dispute strategy that works for you and your customers.
This clear-eyed analysis of your technology and processes in all stages of the transaction life cycle can help reduce fraud and disputes, improve your customers’ experience, and set your business up for continued success and growth.

Want more? Don’t forget to read our previous blog post “Top 3 Ways to Improve Your Dispute Strategy”.

¹ Mobile & Online Remote Payments for Digital & Physical Goods – Juniper Research, 2019-2024
² Improving the Dispute Experience: Transparency Is Power – Aité, 2020

The Importance of Building a Dispute Strategy

Success and longevity in e-commerce are driven by a solid payments strategy and strong customer service standards. Yet, the payments landscape is changing rapidly, which can make it difficult to navigate without a strategy. According to a recent study, in-store shopping has dipped 3% year-over-year, while online shopping has increased by 10% over that same period*.

Today’s sellers need to maintain diversified payment channels – mobile sales, third-party facilitators, e-wallets, etc. – as well as work with multiple acquirers to deliver products and services to a broad and growing customer base. Great attention must also be placed on robust CRM systems and data security protocols to protect your business and your customers.

The evolution of card-present and card-not-present payments (CNP) continues to provide many conveniences for sellers and customers alike, but there is a downside. With the growth of e-commerce comes an increase in fraud and disputes, which can lead to revenue drain in many ways. In fact, CNP payments have risen by 29%, and disputes have risen by 27%**.

Establishing a viable payments strategy is essential to building your business. But how do you protect your revenue and brand equity from being sapped away by disputes? The writing is on the wall: It’s time to build a complete dispute strategy.

What Is a Dispute Strategy and Why Does Your Business Need One?

While many sellers consider disputes as “the cost of doing business,” they don’t have to be accepted as the unsolvable problem that you just have to live with. Disputes can be reduced and prevented, as well as fought and won.

E-commerce has become familiar with consumers throughout global markets, but this is just one side of the coin. For businesses transitioning from brick-and-mortar to click-and-order, there may be an unexpected learning curve. Such businesses might have had a handle on managing disputes in physical shops and enterprises, but the CNP landscape can present challenges throughout the digital payments cycle that require greater attention on managing fraud and disputes.

What does a dispute strategy look like? It works in three active stages of the payment life cycle:

Authentication and pre-authorization
Post-authorization and pre-dispute
Disputes, chargebacks, analytics, and prevention

Featuring a dispute strategy in core business principles and operations fosters a healthier payments ecosystem – for sellers, acquirers, issuers, and all their customers. Inevitably, for the seller, implementing a dispute strategy translates to revenue optimization, and a better customer experience and business growth.

How to Build an Effective Dispute Strategy

The foundation of an effective dispute strategy can be composed of three pillars: Technology, Operations, and Analytics & Policy.

Technology – Use of a sophisticated CRM system can track customer purchasing behavior and collect vital information to identify customer activity throughout the transaction life cycle. At the payment gateway, intelligent screening tools can protect sellers from fraudsters and bad actors. Such tools include fraud filters informed by real-time fraud scoring, confirmed fraud data, 3DSecure protocols to authenticate customers, and account updating solutions to ensure continued service for card-on-file.

Post-transaction proactive communication of billing and delivery information includes the customer in the transaction lifecycle after they have purchased. It can ensure customer satisfaction, lead to self-resolution, and serve as compelling evidence for revenue recovery, should a dispute occur. Sellers should retain all communications, including sales confirmation emails, proof of customer acknowledgement of return policy and terms & conditions.

Further, data-sharing solutions can be used in the post-authorization stage to mitigate fraud and disputes. Issuers that can review seller data at the point of a customer transaction inquiry can prevent unwarranted disputes and ensure valid sales. In addition, providing digital receipts to customers through consumer banking apps can increase visibility and reduce instances of reported fraud and disputes.

Operations – Sellers’ internal operations and customer service teams should be aware of and understand rules imposed by card brands, returns/refunds policies, and customer service best practices to ensure viable sales. Internal operations – such as financial, sales, and analytics teams – must review findings in sales and returns data to understand the cause of disputes, such as true fraud, family/friendly fraud, and customer dissatisfaction relating to product/service availability and delivery. Collaboration among internal teams can improve customer service practices to ensure valid authentications and authorizations, as well as reduce instances of fraud and disputes.

Analytics & Policy – Legal, finance, sales operations, logistics, risk & shrinkage, and payments teams must analyze activity in collaboration to identify use cases to be communicated and implemented as best practices that can help reduce fraud and disputes.

Use Case Examples:

Family/Friendly Fraud – disputes resulting from purchases not recognized on the cardholder’s account
Digital Downloads or Services – claims of non-receipt or non-use, defective performance
Product Returns – claims of defective items or non-receipt with no actual return (“digital shoplifting”)

Implementing an Effective Dispute Strategy

Successfully preventing and resolving disputes, as well as recovering revenue otherwise lost to unwarranted disputes, can make or break a business. By setting up and practicing a strong dispute strategy – including transaction pre-authorization, post-authorization, and well-maintained data analytics – sellers can reduce fraud and disputes and ensure healthy revenue streams.

In our next blog, Stress-Testing Your Dispute Strategy, readers can learn more about how to implement an effective dispute strategy to optimize their revenue, grow their customer base, and streamline business operations.
To learn more about the state of digital payments today and building a complete dispute strategy, register for our upcoming webinar for insights from Verifi payments experts.

* Javelin – Optimizing Dispute Strategies (Oct 2020)
** VisaNet – August 2020

Total Dispute Management and Pre-Disputes

In October 2019, Visa acquired Verifi. Since day one, the companies have been exploring ways to prevent or resolve disputes quickly. Since then, we have made tremendous strides integrating our solutions with Visa’s infrastructure and have co-developed a revolutionary product, Rapid Dispute Resolution (RDR) – the first fully automated dispute management solution. This is significant because much of the cost of disputes is in the operational time it takes to manually process and resolve a dispute or represent a chargeback.

It was estimated that nearly $31b is lost every year to disputes⁴, which could be reduced through proactive management of a new dispute category we’re introducing called “pre-disputes”. Pre-disputes exist in the period before a simple cardholder inquiry escalates to a chargeback. We recognize the dispute system has been skewed towards the cardholder since inception, and today Visa and Verifi are working to change that.

Verifi initially leveraged opportunities with our original Chargeback Representment service and Cardholder Dispute Resolution Network™ (CDRN®). But when we combine our pre-dispute solutions, PREVENT and RESOLVE, with Visa’s risk and fraud management solutions, we create something greater. Our combined technologies foster brand-agnostic collaboration among all stakeholders, delivering dispute management solutions that are intelligent, data-driven, and customer-centric.

Visa has expertise in acquirer and issuer solutions, global payments coverage, and has made significant inroads with the deployment of the Visa Merchant Purchase Inquiry (VMPI), which has been renamed as Verifi’s Order Insight® (PREVENT).

Verifi has strong relationships with sellers and issuers, payments protection coverage in North America and Europe, and had already gained ground with dispute solutions CDRN and Order Insight.

Marrying these strengths, together we are reinventing the dispute space with a full suite of Total Dispute Management solutions, providing data transparency, automation, efficiency, and recovery of funds otherwise lost to disputes (chargebacks).

Introducing Pre-Dispute Management

Above is the conventional chargeback flow, from cardholder inquiry to representment from the seller. Our goal is to stop chargebacks at the pre-dispute stage, redefining the system.

Our focus going forward is to introduce, expand, and innovate pre-dispute management. Preventing or resolving disputes before they’re submitted to card brands as a traditional chargeback will save time, expenses, and protect the seller’s dispute ratio.

In the usual chargeback flow, after the dispute is submitted to Visa Resolve Online (VROL), a lengthy process begins by sending the dispute to the seller through the acquirer. This puts operational and financial burdens on all stakeholders involved, with constant communication between seller, acquirer, and issuing entities – all in a very compressed timeframe. Sellers must create compelling evidence cases. Acquirer teams must process paperwork for sellers to fight the dispute. All this work mounts up just to provide issuers with more information about a transaction. Then issuers must staff back-office teams to intake and review this compelling evidence and decide the outcome of the dispute. It’s quite apparent that simple, clear communication has been lacking in this process for some time.

With their improvements to the standard dispute process, Visa was able to successfully reduce the average time frame for dispute resolution from 55 days to 24 days. Since joining forces with Visa, Verifi has developed Rapid Dispute Resolution to resolve a pre-dispute even faster – in one second.

Visa & Verifi – Better Together

By combining Visa and Verifi’s expertise, we are rapidly innovating the dispute space, creating dispute management solutions that empower greater levels of transparency, efficiency, automation, cost savings, and revenue retention for partners worldwide.

PREVENT Is Proactive

The PREVENT solution is powered by Order Insight and enables sellers to share data with issuers in real time, while the cardholder is on the phone with an inquiry. For issuers, it reduces call center time, provides greater transparency for their cardholders, and delivers stickier solutions on all the main cardholder touch points.

RESOLVE Is Reactive

When a cardholder wants to initiate a dispute, RESOLVE provides sellers the opportunity to return funds to the cardholder to avoid escalation. This solution can lessen the impact of a negative customer experience with the seller’s brand, reduce seller dispute ratios, and keep countless disputes out of the payments ecosystem. Issuers can also reduce the time to close a case from weeks to seconds, while providing world-class customer service and reducing operational costs.

INFORM For Educated Decisions

INFORM provides sellers with near real-time data from all global Visa issuers to update their systems and fraud models and protect against future losses, while evolving the customer experience.

Pre-Dispute Flow – PREVENT

Now that we have identified what a pre-dispute is and what solutions Verifi and Visa provide to help the ecosystem – how do they interact?

When a cardholder has a transaction inquiry, they most often reach out to their bank instead of the seller. This is where the Total Dispute Management Suite comes into play.

PREVENT provides the means for sellers to send issuers enhanced transaction details or a digital receipt. This is detailed information that an issuer call center can review with the cardholder at that point of initial inquiry. This data presents compelling evidence to cardholders and can prevent loss due to forgetfulness or buyer’s remorse and can help identify intentional fraud.

Issuers can also deploy this same data into their mobile or digital banking applications to enable cardholders to self-validate sales. This cardholder access can lower operational strain on issuer call centers, and it enhances the customer experience for both seller and issuer.

However, if the pre-dispute cannot be prevented at the initial cardholder inquiry, then the issuer can then attempt to resolve the pre-dispute.

Pre-Dispute Flow – RESOLVE

RESOLVE facilitates a quick-and-easy automated resolution through a decision engine operating on rules set by the seller. For example, sellers can set a rule to refund pre-disputes under $10, or for a certain descriptor, for a certain reason code, or even a specific issuer. If the transaction details meet the rules set by the seller, then Visa’s network will resolve the inquiry. Funds are returned to the cardholder, an immediate and final resolution is made, and an improved cardholder experience is attained on behalf of the seller and issuer.

Pre-Dispute Management – The Sooner the Better

By adopting the PREVENT and RESOLVE pre-dispute solutions, sellers can experience immediate and lasting positive effects on their business. Seller accounts are protected against friendly fraud, buyer’s remorse, and lost merchandise. Additionally, both issuers and sellers protect revenue channels from reduced operating costs.
Pre-dispute solutions empower sellers, acquirers, and issuers to share data for quick and easy prevention and resolution at the point of customer inquiry. And an automated process means resources are freed up, enabling payments stakeholders to focus on business growth and innovation.

The Next Evolution

It’s evident, as the events of 2020 have proven, that nobody can predict the future. But one thing we are confident of is innovation and collaboration in our business is key to making the dispute and pre-dispute processes better for all involved.

Payments continue to change and are evolving faster all the time. Consumer behavior is also changing, as more consumers are shopping online and paying with digital wallets.

Disputes remain a key component of payments, and successful management of them requires trust and transparency when things go wrong. So, continuing to evolve the dispute process is vital – and Visa and Verifi are committed to doing just that.

If you missed Part 1 of this series, you can find it here.

¹Visa Claims Resolution Updates, 2018
²Average resolution rate (hours) for CDRN (Jan – Dec 2019)
³Average response time based on Beta testing data, July/Aug 2020
⁴Visa Internal Reporting

When I founded Verifi in 2005, the term “FinTech” was just gaining traction. And suddenly the SaaS transaction dispute solution I was working on had a category. Our first launch in dispute management was Managed Dispute Representment. By 2017, we had worked our way up the dispute cycle to resolve and prevent pre-disputes before a dispute representment is necessary. Chargebacks may never go away altogether, but we have made strides in controlling them throughout the dispute life cycle. I am proud of the ever-evolving teams that helped build, market, and sell our Total Dispute Management Suite – and add value to the Verifi brand. And now, as a Visa company, I am awestruck by what our company’s collaborative efforts have made into reality.

There’s no doubt that 2020 was a character-building year. Most inhabitants of the planet had to adjust their daily lives, causing reverberations throughout global infrastructures. With supply chains interrupted, air travel grounded, and people unable to gather, nothing has been business as usual. With physical movement all but halted, e-commerce transactions skyrocketed, along with disputes, causing many business categories – especially brick and mortar businesses – to suffer. As the situation drags on, customers are developing new buying habits, providing some businesses huge windfalls, while others struggle just to remain solvent.

From a payments perspective, let’s examine why the system is set up the way it is, some of the challenges we’ve faced, the gains we’ve made, and what the future may hold.

Why Disputes Exist in the First Place

Disputes play a pivotal role in the payments life cycle. Disputes provide recourse for cardholders and provide a feeling of protection and security when completing a transaction with a seller. Together, these elements can help drive sales.

Disputes also help protect sellers against fraudulent activity. Disputes ensure the integrity of card brand networks by providing a consistent, fair, and equitable process to resolve exceptions for all parties in the ecosystem.

The Evolution of Dispute Management

Before delving into what the future of dispute management holds, it would help to get some perspective on how we got here.

The chargeback was created in 1974, primarily to enact consumer protection regulations. In response, the Visa network dispute process was born. Since then, there have been numerous advancements in payment technology, payment channels, and addressing security needs.

However, it is only in the last 20 years that the industry has made progress optimizing and automating dispute management. In 2001, Visa launched the first major effort to simplify the dispute process, Re-engineering Disputes, known as RED. This effort consolidated dispute reason codes from around 48 to 22 and removed an entire response cycle to improve resolution time frames.

This effort also included the move to electronic information and documentation exchange in 2005, with the implementation of Visa Resolve Online (VROL). Prior to this, all information and documentation were exchanged mainly via the postal service through different colored envelopes representing each card network for sorting purposes. For inquiring minds, Visa’s envelope was blue.

2005 was also the year Verifi was founded. Our humble beginnings started in an apartment in Los Angeles with our first solution: Chargeback Representment. Over the next couple of years, as our client list grew, we heard time and again that sellers would like a way to communicate with the issuer in real time as a dispute was starting to escalate.

This industry need led to Cardholder Dispute Resolution Network™ (CDRN®). Launched in 2007, it was the first dispute network outside the walls of the card brands. It was also the first solution to reduce operational strain for issuers and gave sellers the opportunity to resolve a pre-dispute before it escalated to a chargeback. This resolution service reduced the operational, financial, and processing risks associated with elevated dispute ratios.

Because we’ve worked with many sellers and issuers, Verifi is in a unique position to innovate and build solutions for our users and react to their needs. In 2016, we launched Order Insight®, enabling what no other solution had done before: Facilitate the sharing of enhanced transaction details between sellers and issuers.

Visa had also continued to evolve the dispute process and launched another major re-engineering of the process with Visa Claims Resolution (VCR) in 2018. With this effort came a reduction from 22 reason codes to 4 general reason categories, as well as improvements to block invalid disputes and the creation of new workflows for even quicker resolution time frames.

The Real Impact of Disputes

Data from Visa shows that sellers challenge only one in three disputes. But understanding this statistic requires a look at some underlying context. The truth is most sellers have experienced frustration with understanding – let alone representing – disputes, which has led to the “Discouraged Seller” effect. Why bother engaging with a system that doesn’t make sense or work for them?

Completely ignoring disputes is not an option. If not addressed, then disputes can have far-reaching and severe financial impacts on all payments stakeholders. The good news is the majority of transactions are successful, and disputes make up only a small percentage of sales.

But if disputes are challenged or responded to by sellers only 33% of the time, then that means the other 67% of the time sellers absorb disputes as a cost of business. In fact, 76% of Visa disputes in NA¹ are related to fraud.

Verifi research has shown that card-not-present (CNP) sellers experience 34% more cases of friendly fraud² than physical channel sellers. That means for some types of businesses this number is much higher. These disputes are mainly caused by cardholder confusion, family fraud, or buyer’s remorse. In speaking with sellers across the globe, that number can be as high as 75%. It depends on the seller’s industry and business model.

Each of these statistics has a real and lasting effect, and there is no doubt disputes cause significant losses for stakeholders in the payments ecosystem.

Shifting Consumer Behavior

Over the last two decades, airlines and travel agents have been among the industries leading the revolution in how people make transactions. From telephone purchasing and travel agents to online agencies, e-commerce, and mobile commerce, the travel industry has been at the forefront of transaction evolution.

2020, for so many reasons, had been an interesting year because we have seen more changes, more innovation, and a greater shift in consumer spending than we have in the past two decades.

A prime example of changing behavior is the difference in CNP spending trends this year compared to recent history. Sellers across the globe have been affected by the pandemic and the loss of consumer access to brick-and-mortar stores.

In May 2020, The New York Times reported United and American Airline sales were down 95% from April 2019. The same article quoted a report from Airlines for America that showed a $350 million daily loss. But all reports were not doom and gloom.

In the same period, home furnishing outlet Wayfair’s earnings showed a 20% surge in Q1 Sales, and Netflix added 15.8M new subscribers in Q1. Consumers were quickly adapting to the “new normal”.

2020 aside, consumer behavior has completely changed over the past two decades, and consumer expectations have evolved as well. In the past two years, this evolution has noticeably accelerated.

Visa research has shown that between 2017 and 2020, CNP spending increased nearly 30%. I believe that this is, in part, a result of increased convenience consumption, such as food and beverage delivery, the ease of home delivery for apparel and home purchases, and the increased adoption of digital wallets by consumers and sellers alike. These advances have benefited many, but they have also allowed new vulnerabilities for fraud and dispute abuse.

Visa has shown there has been a 27% increase in disputes between 2016 and 2019³ – strikingly similar to the rise in CNP spending. Ideally, we would not see CNP spending and disputes rise in tandem. The goal is to reduce disputes and ensure a positive experience for the consumer – the glue that bonds sellers and issuers together.

Unfortunately, the seller is often left out of the first customer inquiry that leads to a dispute: Up to 76% of the time³, customers contact their bank instead of the seller with a transaction inquiry. This reality has serious ramifications for sellers by not allowing them to provide best-in-class customer service, protect their brand value, and provide a direct resolution for their customer. In 63% of cases⁴, once a customer experiences fraud with a transaction, they won’t return to that seller.

Until recently, issuers did not have quick or easy access to additional transaction data. Typically, the only additional data they had was the merchant category code, which may be useful to help identify the transaction but not likely for most cases. Some issuers would pursue a simple internet search for additional data. But this took time and, in many cases, did not deliver any additional data to resolve the cardholder inquiry.

Toward the end of 2019, Visa acquired Verifi, and the leader in global card transactions was now in collaborative partnership with the global front-runner in post-transaction dispute services. In one short tumultuous year, the companies have made great strides together in CNP disputes solutions.

Read about Visa and Verifi’s collaborative progress in part two of this series, “The Dispute Landscape – Past, Present & Future (Part 2)”.

* Visa Internal Reporting
¹Visa Internal Reporting
²The Chargeback Triangle, Javelin Strategy & Research
³Visa Internal Reporting
⁴The Chargeback Triangle, Javelin Strategy & Research

Remote Purchasing and Automation

The rapid growth of e-commerce has brought on technology that provides greater purchase transparency for customers. After all, the customer is the king – they have the right to know what’s happening in their accounts. Now, up to 73% of customers engage with their issuer’s mobile app or website at least once a month to review their transactions*. As a result, consumers have become more aware of possible payment fraud and are quicker to report as such to issuers. Unfortunately for sellers, this frequently means an increase in chargebacks, many of which may not be actually valid.
Furthermore, the trend for at-home purchasing has increased significantly in 2020. The more that people are working at home, the greater interest they take in improving their home environment. In light of this trend, Home Depot has reported an increase in online purchasing of 80% year-over-year for Autumn 2020**. Remote payments are projected to grow more than 66% by 2025†, suggesting that at-home and mobile purchasing are setting new standards for e-commerce sales. One can only speculate what this means for a commensurate increase in chargebacks, valid or not.
There’s no question that e-commerce, remote purchasing in general, has expanded in availability to consumers in the past several years, particularly in 2020. Automated authentication and authorization have become the standard for today’s online sellers and buyers. Customers now have greater visibility of their purchases, when they want it and where they want it. And real-time fraud protection has also been set up by sellers and their payment facilitators to further ensure safe purchasing. Indeed, the payments landscape has risen to a new paradigm of convenience and protection by automation. But where is the advancement in real-time dispute resolution? How can sellers stop the inevitable increase in chargebacks, the other passenger in this automated flight to the future?

Stop Chargebacks with Rapid Dispute Resolution

Developed by Visa and Verifi, Rapid Dispute Resolution (RDR) provides automated, real-time dispute resolution and chargeback prevention for e-commerce buyers and sellers. Now, sellers can protect themselves – and their customers – from unwarranted disputes at the time customers present them to their payment card issuers.
What’s more, only Visa and Verifi could provide the real-time resolution of RDR on a global scale. Visa is the largest card brand provider in the world with the largest issuer network. Verifi’s peerless payment protection technologies, combined with Visa’s array of purchasing capabilities throughout the world of payments, can now enable sellers and issuers to resolve transaction disputes automatically. A much-needed solution for all stakeholders in the payments industry, RDR will soon be live globally with general availability for all interested parties.

Seamless Control for Sellers

What does this new level of automation mean for sellers? Establishing their place and an even playing field that prevents unnecessary chargebacks.
By implementing RDR, sellers simply define terms of resolution eligibility by applying rules and attributes set up in Verifi’s decisioning engine. The process is simple. When an issuer submits a disputed transaction into Visa’s dispute processing platform, disputes qualified by sellers’ pre-defined rules are immediately resolved by RDR at the pre-dispute stage. In other words, this automated action occurs prior to the case being fully processed as a dispute, stopping a chargeback from ever happening.
Verifi has made defining rules and attributes for automated dispute resolution a simple task for sellers. In fact, once completed, the automated system of RDR enables sellers to focus their attention and resources on business growth and customer service, instead of resources being diverted to manual dispute review and the laborious efforts of chargeback representment. Of course, rules and attributes can be adjusted at any time to address changing trends and suit the best needs of the individual business.
Real-time dispute resolution equates to hands-off automation that stops unwarranted chargebacks:
• No manual review or extra operational demands
• No impact on dispute ratio – all resolutions are complete and final
• No drain on revenue from unwarranted chargebacks
• Service reports can lead to increased authorizations
• Extend and improve customer service in post-transaction
Absolutely no integration is required by the seller or their payment facilitator. Since RDR operates at the issuer level, once sellers have opted in and define their rules, Verifi’s real-time, automated decisioning engine does the rest, requiring no further action by sellers.

Perfect Partner to the New Purchasing Normal

In the new normal of predominant online purchasing, automated dispute resolution will be a fixture in post-authorization customer service.
Once sellers define their rules and attributes and submit them to Verifi for implementation in the world’s only automated, real-time decisioning engine, unwarranted chargebacks can be significantly reduced. Issuers only need to access RDR, already implemented in the Visa dispute processing platform, to take advantage of this great service. At the point of real-time decisioning, communication is immediately sent to acquirers, so they can provide a quick return of funds to the customer. In all, the seller maintains a hands-off role in this correction. Benefitting all payments stakeholders, RDR provides expanded global protective coverage against revenue-diminishing disputes and chargebacks.
All payments stakeholders will benefit:
• Sellers maximize operational resources, revenue reliability, and customer loyalty, protecting their brand and payments viability
• Issuers provide quick, efficient dispute resolution services for cardholders, reducing resource and operational drain
• Acquirers maintain healthy dispute ratio on behalf of their seller clients, enabling portfolio stability and growth
• Customers experience quick, simple, and complete dispute resolution for increased satisfaction with the level of automation they’ve come to expect
Step up to the next level in online payments protection with RDR. Contact Verifi today to learn more.

*”Improving the Dispute Experience” – Aité, May 2020
**”COVID-19 Impact on Global E-Commerce and Online Payments” – yStats.com Nov. 2020
†”Ecommerce Payments Deep Dive Data & Forecasting 2020-2025″ – Juniper Research, Nov. 2020

So much of life is routine. On most days, many of us wake up at a set time to go to a job; we work a planned schedule; we commute a predetermined route both ways. On top of that, we program our morning coffee to brew at a certain time, set thermostats to turn on when we’re close to home after work, and even push a button to get our car to drive itself when possible. We have achieved this level of automation because doing so takes care of marginal tasks that are part of our daily routine, and we don’t want to think about them. But what if we could apply this kind of automation to a level of business where it really mattered? Verifi has taken this concept and applied it to transaction dispute resolution and chargeback management in the form of Rapid Dispute Resolution (RDR).

The Demand for Automated Chargeback Protection

In recent years, there have been many technological innovations to ensure customer convenience in digital payments, such as fraud protection for sellers and issuers. Tap-to-pay and contactless options enable frictionless purchasing experiences. EMV chips ensure reduction of fraud, benefitting customers, sellers, and issuers. Card networks have updated processes to provide transparency and a quicker response for customer return requests. Now, blockchain technology provides even more resistance from attack on digital purchases and more for greater protection against fraud. Dispute resolution technology has been due for a leap in evolution.
Verifi has led the payments industry with Cardholder Dispute Resolution Network™ (CDRN®), and collaboration services became the standard for protecting sellers and issuers from the costs associated with disputes and chargebacks. This robust solution enables issuers to collaborate with sellers to resolve disputes within 72 hours. The result is both parties are protected, and the customer receives a timely resolution – and chargebacks are prevented.
Now, Rapid Dispute Resolution (RDR) takes the chargeback management experience to the next level. RDR is built on technology developed by Visa and Verifi for real-time dispute resolution. Driven by Verifi’s decisioning engine, RDR enables sellers to automate dispute resolution by defining rules on how to resolve transaction challenges at the pre-dispute stage. The result is a touchless experience for the seller and seamless dispute resolution for the issuer with no demand on operations. Nearly all human error and manual effort is removed from the resolution process. As such, there is no other technology like RDR in the payments industry.

Resolution at the Pre-Dispute Stage

Resolving a dispute prior to the possibility of it becoming a chargeback is essential for the new age of automation. Only Verifi and Visa could provide the technological leap needed to ensure sellers and issuers can take the next step to automated dispute protection. We define this as resolving a transaction inquiry at the pre-dispute stage. As a function of the issuer dispute management platform, Visa Resolve Online (VROL), RDR will be activated for all Visa issuers on a global scale by April 19, 2021.
Establishing RDR rules and attributes for pre-dispute resolution is simple for sellers. For example, a seller can set a rule to accept liability on disputed transactions of $25 or less. In addition, sellers can customize rules with attributes to accept liability on transactions with unique purchase identifiers, currency types, dispute categories, and more. With 10 rules available per seller account and up to seven attributes that can be applied to each rule, sellers can maximize control over the real-time dispute resolution that is right for their business, in addition to providing a better customer experience. RDR allows sellers to set it and forget it; the decisioning engine does the work automatically.
RDR institutes a market-first product that is aligned with current technology trends and customer expectations for quick and efficient service. In short, RDR is a modern solution for modern needs.

Removing Human Limitations

Responding to disputes takes time, however quickly sellers respond to an alert or find themselves knee-deep in the chargeback process. Someone must manually review the pre-dispute, accept liability, and take action to refund the transaction. That person might make a mistake, take too long, or simply not be available due to a furlough or layoff. RDR remedies all of those concerns.
Taking advantage of RDR is simplicity itself for issuers and sellers. This new automated solution is built directly into VROL, so Visa issuers only need to make the choice to add RDR in their regular process. Once participating sellers choose to get on board, they need only to define their rules and attributes. Verifi specialists then upload and activate the rules, and the decisioning engine does the rest. The chance of human error is effectively removed from the experience.

Automated Dispute Resolution on the Visa Network

Combining Verifi’s ingenuity and Visa’s well-established vast data resources and excellence in secure and successful payments, RDR answers the call for automated dispute resolution. And it’s all on a worldwide scale, as Visa is the largest global provider of powerful seller, issuer, and customer payments solutions. As a Visa company, Verifi is in the ideal position to deliver automated dispute resolution with a reach like never before, in real time, and with virtually no vulnerability to human error.
To learn more about how RDR can benefit your business, contact us today.

Lack of communication and transparency in information can result in bad decisions and negative outcomes – particularly when it comes to transaction disputes.

Consider the following scenario: A customer makes a credit card purchase with a seller, but the customer doesn’t recognize or remember that transaction later while reviewing their bank statement. The customer suspects the transaction may be fraudulent activity and contacts their issuing bank for clarification. The issuer probably has no information on the transaction and moves forward with filing a chargeback on behalf of their cardholder. Meanwhile, the seller is left out of this discussion completely. At some point following this customer-issuer exchange, the seller receives a chargeback notification – after having dispensed the goods or services sold to the customer, and that revenue is now lost. The customer has reclaimed the money they paid, but the seller’s dispute ratio is impacted by a chargeback.

This negative outcome could have been avoided if the seller were able to communicate the transaction details when the customer inquired about the purchase. Since customers seldom contact the seller about unrecognized transactions, and may not even know which seller to contact, it’s almost impossible for sellers to prevent disputes on valid purchases in such a case. In these common scenarios, a little collaboration can go a long way to prevent disputes.

Fraud Affects Customers and Sellers

Most customers don’t make purchases with the intent of disputing them later on, but in this day and age of omni-channel shopping, it’s easy for customers to lose track of what they bought, where they bought it, and when they bought it. This problem is compounded when family members jointly access e-commerce accounts and share the same credit card used for various services. Cardholders can easily lose visibility on purchases made on their credit card and mistakenly think someone has unauthorized access. As a result, cardholders may be disputing transactions unnecessarily, cluttering the payments ecosystem with chargebacks that are really valid transactions.

Friendly Fraud (First-Party Fraud)

Despite its name, there’s nothing amicable about friendly fraud. In these cases, the customer is disputing a valid transaction that they don’t recognize – or claim they don’t recognize. It is possible that the customer forgot the purchase, or the billing descriptor on their statement isn’t clear. Whatever the reason may be, the customer probably wouldn’t dispute the transaction if only they had the details to recognize it as valid. However, in cases that are virtually impossible to measure, some customers are intentionally challenging a legitimate purchase as fraudulent to regain funds, which is better known as chargeback fraud.

Family Fraud (Familial Fraud)

When a single credit card is shared by multiple family members and/or across multiple services and platforms, then it can be difficult for the actual cardholder to keep track of the purchases made on that card. Parents who attach their credit card to their child’s gaming console or cell phone app store know that unexpected purchases can appear on bank statements.

Buyer’s Remorse

People sometimes make purchases they regret. Perhaps the purchase was an impulse buy or fueled by the excitement around the product or service, which faded fast. Now, the customer wants their money back even though they got what they thought they wanted from the purchase. Unfortunately, filing disputes based on remorse blurs the line into bounded the territory of intentional fraud.

Informed Customers Help Reduce Disputes

Sellers should always communicate as much purchase information to customers as possible. This communication can include a digital receipt, follow-up email, push notifications, and more. Unfortunately, that information is rarely top of mind when the customer is questioning a transaction that they don’t recognize days, weeks or months later. For this reason, sellers need a way to communicate detailed transaction data to customers at the point of inquiry. Being able to do so can help prevent disputes at the pre-dispute stage before it escalates to a formal chargeback.
Verifi’s pre-dispute solution, PREVENT, enables sellers to communicate transaction details to customers at the point of first customer inquiry. Featuring Order Insight®, PREVENT facilitates this communication by granting issuers real-time access to detailed seller business and transaction data. PREVENT works can be effective for any business type or industry, offering delivery of over 160 data fields to sellers to ensure transparency in transaction data. Sellers can communicate details such as the color of a product, the last time a subscription service was used, the device on which a purchase was made, and more.

Communication Is Key

By enabling collaboration between payments stakeholders, PREVENT extends the seller’s customer service into the issuer call center. And the issuer can now give inquiring customers detailed clarification on confusing transactions. Friendly and family fraud are virtually eliminated, because the cardholder has more detail to recognize the purchases as valid. Now, customers committing intentional fraud may think twice when the issuer can present to them compelling evidence that the purchases were made by the customer on purpose.
It’s rational to assume that most customers don’t intend to file frivolous disputes, but when customers question a transaction and issuers can’t provide answers, then what recourse do customers have? Verifi offers an alternative solution by enabling sellers to be part of the conversation. With PREVENT, sellers have a way to keep serving their customers, saving the sale and preserving the relationship.

For more information on Verifi’s pre-dispute solutions, contact us today.

Dispute representment, the process of responding to chargebacks to recover revenue, places significant demand on sellers’ internal resources. The process can be time-consuming and costly, where directing expenses on staff, information gathering, and communications with multiple parties would be better directed toward product and service development to grow a greater customer base. Fortunately, Verifi’s pre-dispute solutions can help sellers avoid representments and even turn transaction disputes into opportunities to strengthen customer relationships.

Representing Disputes is Difficult

Representing a dispute is always a net loss. Even if a seller recovers 100% of the transaction, the dispute has already impacted their dispute ratio with the card brand. Additionally, most sellers aren’t experts in dispute representment, and they may not be prepared for the amount of time and effort it takes to actually win a representment case. Below are some of the common challenges a seller could face:

Collecting Documentation

Each chargeback comes with its own documentation requirements. Staying on top of reason or condition code details requires an informed staff. Collection of some key documents for chargeback responses includes:

Proof of delivery, signed receipt for goods
Proof that the cardholder’s CVV was provided
Refund/return policy (all issuers require proof that your return/refund policy is clearly visible throughout the sales process)
All documented customer communications

Time Constraint

The customer has up to 120 days to file a chargeback from the transaction’s posting date. Sellers, however, have a maximum of 30 days from the date of the chargeback – not from the date of notification – to respond with representment. In the time it takes for sellers to learn of the chargeback and assemble an effective representment, sellers may have 14 days or less to respond to the chargeback.

Communication Breakdown

Sellers may discover that they have been preparing a case for a chargeback that their acquirer is already managing. For example, there may be times when the acquirer decides to push back against the chargeback, without informing seller clients.
In 2018 alone, sellers experienced $19.39 billion in costs for chargeback management¹.
While chargebacks do cause losses in revenue, for some sellers, time may be the greatest cost when managing disputes and chargebacks. If that’s the case, then the expense is made at otherwise growing their customer base and loyalty.

Keeping Up with Payment Options

Evolving payment technologies provide quick, convenient purchasing options for customers, creating expectations for lightning-speed payment acceptance. Advances in streamlined payments could be the driving force behind customer expectation for a quick, if not immediate, solution to their disputed transaction.
Customers benefit from speedy payment options, yet sellers are still slowed by complex and tedious dispute and chargeback processes. Today’s sellers need proactive solutions to minimize the cost and resource drain caused by disputes, while functioning at the earliest possible stage in the post-transaction environment.

Pre-Dispute Solutions

Sellers owe it to themselves – and their customers – to deploy quick-acting dispute prevention services as an essential feature of customer service at the endgame of the payment lifecycle. Verifi and Visa have developed technologies that enable sellers to prevent and resolve disputes at the pre-dispute stage, specifically at the point of customer inquiry with their card-issuing bank.
Furthermore, customer and issuer access to purchasing details at the point of customer inquiry could lighten the strain caused by friendly fraud. In fact, friendly fraud-related disputes are thought to be on the rise. It has been estimated that chargebacks related to friendly fraud could set back U.S. sellers up to $15 billion in 2020².
PREVENT
Verifi’s PREVENT, featuring the services of Order Insight, formerly known as Visa Merchant Purchase Inquiry (VMPI), directly delivers transaction and seller information to issuing banks and their cardholders. At the point of inquiry, issuer staff can access seller transaction details and review the data with the customer. Review of this data can provide immediate clarity on transactions, reducing instances of disputes and preventing friendly fraud from escalating to an unwarranted chargeback.
Order Insight Digital enables issuers to provide transaction details to their customers in their online banking portal or mobile app. Access to the details enables customers to review clear information on otherwise confusing billing information, so they can simply resolve the situation on their own, preventing a dispute from ever occurring.
RESOLVE
Verifi’s RESOLVE enables issuers and sellers to resolve disputes at the pre-dispute stage so a chargeback will never happen. RESOLVE comprises two solutions that enable sellers to provide a quick credit and prevent chargebacks.

Rapid Dispute Resolution (RDR) gives sellers the power to define rules for immediate resolution when a Visa dispute is submitted by participating issuers in Visa Resolve Online (VROL).
Cardholder Dispute Resolution Network (CDRN) empowers sellers to resolve disputes submitted on all other major card brands. Sellers receive notifications from participating issuers and have up to 72 hours to resolve a dispute and stop the chargeback process from ever happening.

Best of all, with PREVENT and RESOLVE solutions, inquiries and dispute submissions that are addressed at the pre-dispute stage will not count against a seller’s dispute ratio. And because of Visa’s global presence, sellers and issuers worldwide can take advantage of these solutions to maximize their resources and provide a quick and satisfying experience for their customers.

Post-Dispute Customer Communication

Verifi’s pre-dispute solutions serve as great tools for sellers to provide better service for their customers. Even when a transaction is concluded, the seller-customer relationship doesn’t end. Following a prevented or resolved dispute, sellers should take advantage of the opportunity to further nurture customer engagement and loyalty.
Considerations for post-dispute customer communication:

Email or phone your customer, acknowledging the resolved dispute, and provide a reassuring message on the importance of their ongoing patronage.
- Invite your customer to enter a higher level in your loyalty program
- Extend the range of free trial offers
- Provide alternatives to the disputed products or services
- Invite their participation in a survey to provide suggestions on improving your service – and reinforce with complimentary products/services
- Include customer service contact information to support a quick response to any future purchase issues

Taking advantage of every opportunity to build and grow customer loyalty should be a key element in a seller’s plan for core growth.
Verifi’s pre-dispute solutions enable sellers to take advantage of the new standards of quick and streamlined purchasing options, by extending customer service into the post-transaction environment. Not only do sellers win by reducing resource demands for dispute and chargeback management, but your customers win as well with your assurance of their importance by providing quick and complete dispute solutions.
To learn more about Verifi’s pre-dispute solutions, contact us today.

CITATIONS
1: “The Chargeback Triangle” – Javelin Strategy & Research, 2018
2: Merchant Chargebacks Are on the Rise due to Friendly Fraud – Mercator Advisory Group, 2019

The customer experience does not end with the sale

Your business provides an excellent frontend customer experience, with intuitive shoppability for locating items, colors, sizes – whatever the customer needs to make their selection and seamlessly move through a smooth, secure checkout. Just as important, however, is the post-transaction experience you deliver. This potentially is the difference between keeping the sale or having it end in a chargeback, with not only the loss of the sale, but also potentially the customer, as well. Providing digital receipts by email is a good first step sellers can take to save the sale and the relationship. When customers have questions about their transactions with your business, you’ll need extra help answering those questions, and Verifi’s pre-dispute solutions can help.

Elevating the post-transaction experience

What makes a good post-transaction experience? In a word, communication. If you think about all the options customers have to make purchases, both e-commerce and physical locations, with family members sometimes sharing the same account or card, then post-transaction communication is simply smart business. Many sellers may provide a basic transaction receipt, or a targeted follow-up marketing message, but an enhanced, detailed digital receipt can be the kind of customer service that distinguishes your business from your competitors. Here are a couple of ways digital receipts enhance the post-transaction experience:

Uncover Family Fraud
- When a purchase is made by a family member without the cardholder’s knowledge, there is a higher likelihood that the purchase will be reported as fraudulent. By listing the device and email address used for the transaction, the cardholder can determine which family member made the purchase.
Clarify Confusing Bank Statements
- Banking statements, both online and off, can have limited transaction information, often only including transaction date, post date, amount, and merchant descriptor. A detailed digital receipt can clarify a lot of customer confusion stemming from this lack of transaction information. Giving the customer more information about their transactions is not only good customer service but may help prevent disputes as well.

Digital receipts can also mitigate “friendly fraud” or “first-party fraud,” when the customer seeks a refund for a valid sale. This can happen for any number of reasons. Maybe the customer forgot they made the purchase, doesn’t recognize it on their statement, has buyer’s remorse, or is knowingly committing digital shoplifting. By listing the device and email used for the purchase, along with detailed business information, the customer will be able to validate the transaction or give digital shoplifting a serious second thought.
Ideally, a digital receipt – either delivered by email or through Verifi’s services – will help prevent a dispute altogether and save a customer relationship. Cost per acquisition can be pricey when considering all of the marketing, advertising, and PR costs that go into acquiring a new customer. It’s easier and less expensive to retain an existing one. So, a bump in operational costs or extra time spent creating a digital receipt is a wise investment.

Seller-initiated digital receipt best practices

Remember, when you create a digital receipt for your business, you’re representing your brand. Make it engaging, well-designed, and have it contain a marketing message. But don’t forget, the main purpose is to help validate the transaction for a cardholder who may not be the person who made the purchase. This scenario can happen when multiple accounts are tied to a single credit card. So, aside from including item, price, and date of purchase details, here are a few things to keep in mind.

Direct and concise subject line – “Your purchase receipt for $25.20 from Tech Central.”
Include device and email address used for the purchase
Show how your descriptor information will appear on a bank statement
Limit marketing content to 30% to ensure deliverability
Alert customer if there is a delay in shipping (at any time)
Include your contact details for further customer questions
Send receipt email the same day as when the purchase was made

Stay connected to your customers through issuer collaboration

By providing your own digital receipt, you have performed due diligence in keeping your customer informed of a valid transaction, including the information to validate it. This is also good evidence should you require it for dispute representment. But what if your customer misfiles the email or, like 76% of people with a transaction inquiry, just calls their issuer?
This is where Verifi’s PREVENT solution comes into play. PREVENT is powered by Order Insight (formerly Visa Merchant Purchase Inquiry (VMPI)) and accessed by issuers on the Visa Resolve Online (VROL) platform. Order Insight enables you to share transaction details with issuers, allowing you to choose from over 160 fields to map data across. This data transfer happens in near real time, at the issuer’s request, while on the phone with your customer, empowering the issuer to help validate the transaction and prevent a dispute at the point of first customer inquiry. Order Insight essentially extends your customer service to issuer call centers, providing an improved customer experience and preventing disputes from entering the payments ecosystem. That’s some serious collaboration for a lot of wins.

Order Insight covers all major card brands, has global reach in over 200 countries and territories, and handles transactions in most currencies. Customer self-service is also available through Order Insight Digital, which delivers detailed business and transaction data to the issuer’s online banking and mobile app and is available 24/7. Order Insight keeps you involved in the customer service experience even when your customer reaches out to their issuer.

Differentiating your value with better customer service

With retail e-commerce sales estimated to have increased 44% year-over-year for the second quarter of 2020, it’s more important than ever to stand out among your competitors. An informative email digital receipt is a low investment, high reward way to do just that – an easy win for you and your customers. For extra help when customers question transactions, there’s Verifi’s PREVENT solution that keeps you in the customer service conversation by enabling collaboration with issuers.
Find out more about how you can elevate your customer experience and protect your payments with Verifi’s PREVENT pre-dispute solution. To chat with a Verifi representative, contact us today.

Reference
The Chargeback Triangle – Verifi
Quarterly Retail E-commerce Sales Second Quarter 2020 – US Census Bureau

Pre-Dispute Solutions
The advent of e-commerce sparked a radical change in consumer purchasing. Distance buying by phone or mail order meant weeks or months of delivery time, but now one-click buying means only an hour or a few days of delivery time. Genius! Savvy e-commerce sellers have come to count on great technologies to better serve their customers. As a result, 4 out of 5 people have found that online purchasing is the way to go.
The downside with the increase of easy, online purchasing? The increase of fraud and disputes. Today’s businesses and financial institutions providing card brand services are deluged with disputes and chargebacks. Since consumers are buying more online, they are also challenging more purchases. Speedy purchasing does have its pitfalls, as some consumers have learned how to game the system by getting refunds from their bank and leaving the seller out of it. This is a typical example of a chargeback. So, where are those equally speedy solutions to protect sellers and card-issuing banks worldwide from the damages caused by disputes?
Visa and Verifi’s Pre-Dispute Solutions
Now, as a Visa company, Verifi is in the ideal position to provide businesses and issuing banks protection against fraud and disputes on a global scale. Protection that equals and anticipates the needs of consumers accustomed to rapid service.
From their foundation, our mutually developed technologies were built with the understanding that today’s businesses and banks need to service their customers quickly and thoroughly. And that means solving a challenged purchase at the pre-dispute stage – before it is submitted as a chargeback by the issuer.
Our pre-dispute solutions go into action at – or even before – the point of customer inquiry with their bank. Issuers and sellers connected to our global platform work in collaboration, sharing seller transaction data and resolution rules to head off disputes at the pre-dispute stage. Instead of weeks or months taken for the chargeback process, draining resources for issuers and sellers alike, now chargebacks can be prevented in as little as a few seconds.
What exactly are pre-dispute solutions? Simple yet advanced technologies that prevent and resolve disputes before they become costly chargebacks. We’ll lay out some simple details below:
PREVENT
Collaboration is the missing piece that solves the puzzle of today’s need for rapid dispute management. Collaboration is the key to our pre-dispute solutions.
Verifi’s PREVENT enables issuing bank personnel and their customers to view seller transaction details at the moment a purchase is in question. If a customer calls their bank to inquire about a purchase they don’t recognize, then the representative can quickly review the transaction details to confirm a valid sale or prevent an attempt at friendly fraud. A common example of friendly fraud is when the cardholder initiates a dispute with their bank, unaware that a family member made the purchase without telling others in the family.
Issuers can also provide these transaction details to their customers in their online banking portal or mobile app, enabling their customers to self-resolve and prevent an inquiry and dispute. The bottom line: Quick visibility on transaction details can prevent unnecessary disputes.

HOW IT WORKS:
• Sellers direct their transaction data to Verifi’s global network
• Issuers access seller details in real time on Visa Resolve Online (VROL), Visa’s global dispute management platform
• Issuers can review details at the point of customer inquiry, as well as deliver details to online and mobile banking apps for customer self-resolution
Now, sellers and issuers working in collaboration with our data-sharing technology can help solve the $31B chargeback problem by preventing disputes from ever happening – at the pre-dispute stage. Best of all, customers have little or no difficulties and a better post-transaction experience. But what about disputes that can’t be prevented by this process?
RESOLVE
Sometimes, true fraud happens. Sometimes, customers receive delivery of defective products or services – or NO delivery at all. Maybe a cancelled subscription service didn’t get properly cancelled. Or the dispute simply isn’t worth a seller’s time and resources to battle. There are many scenarios for unpreventable disputes.
Verifi’s RESOLVE provides the solution for issuers and sellers to resolve disputes at the pre-dispute stage, stopping a chargeback from ever happening. Our automated service, Rapid Dispute Resolution (RDR), gives sellers the power to define rules for immediate resolution when a Visa dispute is submitted in VROL. For disputes submitted on all other major card brands, sellers can respond to dispute notifications delivered by participating issuers within 72 hours to choose to resolve a dispute and stop the chargeback process. As with PREVENT, inquiries and submissions prevented or resolved at the pre-dispute stage do not count against a seller’s dispute ratio.
Preventing or resolving purchase problems at the pre-dispute stage can help sellers and issuers provide a better customer experience. Today’s customers expect more, and they expect it to happen as quickly as possible. Verifi pre-dispute solutions serve those needs when it comes to disputes.
Here’s how the simple process works:

What Pre-Dispute Solutions Mean for the Payments Ecosystem
Real-time payments need real-time solutions for fraud and dispute problems. PREVENT and RESOLVE provide the payments industry with the ability to provide the service customers expect and deserve, as well as ensure that resources and revenue streams are protected from strain caused by disputes and chargebacks.
• Prevent and resolve disputes at the pre-dispute stage
• Keep dispute ratio low and avoid high-risk programs
• Reduce the workload on operations
• Provide an improved overall customer experience
Working Together in Dispute Management
Visa and Verifi are committed to making our collaboration solutions available to sellers and issuers around the world. Seller-issuer collaboration enables all stakeholders in payments to help solve the growing problem of disputes as an inside job. The result is a more robust and healthier payments ecosystem.
Finally, it’s the consumers who may benefit the most. Customers deserve to feel protected when they buy online. Now, sellers and issuers can feel more protected as well.
To learn more about how Verifi’s Pre-Dispute Solutions can protect your business and better serve your customers, contact us today.

Reference

50 Retail Stats To Consider For Your Brand’s Future – Forbes