The lightning-fast pace of technology has dug deeper into consumers’ billfolds. Mastercard announced on Friday that signatures will soon be optional for all cardholders, not only on the card but on receipts, as well. Mastercard issuers will start distributing the signature panel-less cards in April, 2019.

Having the luxury of get-it-and-go without having to sign anything offers consumers the ability to save time and deal with a little less hassle at the tail end of a transaction for those who “tap-and-pay.”

Mastercard didn’t come to this change quickly. In a study of 1,200+ credit card users, only 40 percent said they had put their John Hancock on the back of their cards, and one-third of those who haven’t signed said they didn’t really see any value in doing it anyway.

“With modern, advanced forms of authentication now available, removing the requirement for signature capture at the point of sale and now signature panels on Mastercard cards is an important step in support of our digital evolution,” said Linda Kirkpatrick, executive vice president, U.S. Merchants and Acceptance, Mastercard. “Issuers, merchants and cardholders will benefit from this change as faster, safer options improve satisfaction and increase sales.”

Mastercard said the move to signature-less was also delayed until cards embedded with chips became common.

Any security risk?

In Mastercard’s research, most of the survey takers didn’t believe that leaving their signature off posed a risk, and two-thirds of the respondents said they preferred biometrics over the standard signatures, PIN numbers, and passwords when paying with their card.

“We see this as a win for all. The investments we’ve made in technology like artificial intelligence and biometrics are what’s powering this next step,” said Ajay Bhalla, president of Mastercard’s cyber and intelligence solutions.

“We believe our merchant and issuing partners everywhere will embrace the ability to deliver a simpler checkout experience while maintaining the highest levels of security.”

To give consumers an extra ounce of confidence in Mastercard’s technology move, the company says that users will remain protected against fraud via Mastercard Zero Liability coverage. However, knowing the caveats of the policy will be important to ensure that there are no gaps.

If a consumer’s card ever gets compromised, the company’s Zero Liability policy states that the card user will not be held responsible for unauthorized transactions only if:

  • The user has used reasonable care in protecting their card from loss or theft; and

  • The user promptly reports loss or theft to their financial institution.

Verifi, an ecommerce solution provider, tells ConsumerAffairs that adding three-factor authentication through biometrics will help ensure that consumers’ identities are protected. However, there are drawbacks to consider.

“The plus for biometrics is that they cannot easily be counterfeited as they are unique to the customer and they are easily accessible for the user,” a company representative said. “On the flip side, this type of authentication is less convenient for consumers and usually requires a longer time commitment for the checkout process as the merchant is requiring an additional factor of authentication.”

This article first appeared on October 19th, 2018 on Consumer Affairs.

We’ve been surveying the fintech landscape as we head into Q4 of 2018. We’ve looked at the future of lending and trends in insurtech and insurance using a crowdsourced content model where we went directly to the Tearsheet community for guidance. The articles have been received well, so now we’re turning our sights to payments and what 2019 has in store for the sector.
We received so many contributions that we had to split this series in two — this article focuses on the evolving transaction and our follow-up article will focus on the future of payments and the changing payment ecosystem.

Crypto

Eric Brown is founder and CEO of Aliant Payment Systems:
“I predict that mass adoption of cryptocurrency payments will be the biggest trend going into 2019. In the last year or so, we’ve seen merchants begin accepting cryptocurrency payments to enjoy a multitude of benefits that traditional payment methods don’t offer, including the ability to transfer funds quickly and inexpensively, simplified payments, more secure payments, and to gain a competitive edge. Not only are merchants now able to accept payments in crypto online, but in retail settings as well through the use of QR codes.With major merchants such as Overstock.com, Lord & Taylor, Expedia, Shopify, TigerDirect, NewEgg, and Dish Network already accepting cryptocurrency payments, consumers will become more comfortable making cryptocurrency transactions on websites they trust, and it’s only a matter of time before they use digital currency in other environments as well, such as in a retail setting. Blockchain payments will soon change the we do business and interact with companies on a personal level as well. The technology will be used in government, especially with taxes (this is already being implemented), private sector, and medical, as well as aerospace. Blockchain will also become commonly used for everyday transactions, including home and car titles, legal contracts, government contracts, retail inventory and distribution. I could go on and on.”

Frictionless payments

Matthew Katz is CEO of Verifi:

“Consumer adoption of mobile commerce and frictionless payments continues to place more demand on many merchants. We see this trend continuing in 2019, along with a rise in transaction disputes associated with m-commerce purchases. It is likely that fraud in traditional payment channels will continue to rise concurrently with the popularity of mobile transactions. Now, merchants must cement brand loyalty via their mobile channels, or it may become easier for consumers to commit fraud via m-commerce – from the commonplace “white lie” variety to outright deception. We believe that the extension of brand recognition, merchant contact information, and comprehensive transaction details will become more widely available on consumer banking apps in 2019. Sharing this information with issuing banks will be crucial to building brand loyalty and earning consumer trust through transparency, and ultimately it will dissuade and reduce fraudulent activity.”
Tyler Beuerlein is evp of Business Development at Hypur:
“I believe that we’ll see card-less payments gaining steam in the markets we deal with, particularly with a direct bank-to-bank transfer model. The aspect of payments that seems to fly under the radar is the compliance burden placed on the Financial Institutions processing those transactions. Innovation brings new regulatory compliance considerations for these Institutions. Those issues need to be addressed at the rate of innovation as they have are directly related.”

Payments focus on SMBs

Blair Jeffery is COO of Noventis:
“Virtual credit card payments will continue to become more widely accepted by small to medium-sized businesses (SMBs) as suppliers embrace the improved security and convenience of this digital payment method over paper checks. In 2019, FinTechs will serve this market by offering automated reconciliation and straight-through processing (STP) solutions. STP allows suppliers to electronically receive payment information for quicker, more secure and effective transaction processing. When businesses adopt STP solutions, errors are reduced as accounts receivable employees are freed up from manually entering information and verifying whether a transaction has fully processed.
Existing fintech solutions do not effectively serve the needs of SMBs, such as simplifying user interfaces, minimizing the authentication processes, and facilitating the downloading of remittance information to commercially available products like QuickBooks, Xero and others.  In order to serve SMBs, FinTechs in 2019 will become much more creative and flexible in their approach to developing new tools and systems for this market.”

Vinay Pai is svp of engineering at Bill.com:
“Small businesses will increasingly use more global supply chains. They have international suppliers for raw goods, and these suppliers want to be paid on-time and in their local currencies.
Payment speed and convenience are table stakes. Freelancers and contractors want to be paid quickly and with direct deposit. With low unemployment, contractors will prefer vendors who are good payers. Forget Net-30. How about getting paid in 1 or 2 days?
Everything is integrated, why aren’t my payments? No one wants to enter the same data in different systems. Automatic integration and reconciliation with accounting software is expected, and not a nice-to-have.
Machine Learning is gaining widespread adoption. Small businesses don’t fear the robo apocalypse. ML will help them identify better customers and improve their business; and AI will substantially reduce data entry.
Blockchain and Distributed Ledgers will endure even if crypto currencies disappear. Blockchain/DLT will simplify vendor-to-vendor payments and international payments and will become more common place in ~12 months. Smart contracts will streamline commerce by simplifying contract terms and facilitating faster payments upon receipt.”

Healthcare payments influence switching healthcare providers

Deirdre Ruttle is the vice president, strategy at InstaMed
“65 percent of consumers would consider switching providers for a better healthcare payments experience according to the Consumer Healthcare Payments Survey cited in the InstaMed Trends in Healthcare Payments Eighth Annual Report. This consumer sentiment and what it could mean for providers and payers is indicative of healthcare consumerism trends.
As 2019 approaches, InstaMed is seeing a strong demand for a consumer healthcare payment experience that is on par with the best retail payment experiences. The experience has to be convenient, offer multiple options for payment channels and methods and meet the highest standards of security. As consumer payment responsibility continues to increase, InstaMed is also seeing a strong trend toward the demand for automation. For instance, automated payment plans are important for the significant number of consumers with high deductible health plans who must pay larger balances for their healthcare services, while consumers with smaller balances tend to prefer the no-hassle approach of automatic payments.”

Alternative lenders and collections

Eden Amirav is CEO and co-founder of Lending Express:

“Alternative lenders are already investing in developing smart, in-house collection solutions or using third party companies to simplify the collection process for them and for the borrower. This will continue in 2019, meaning loan payments will be increasingly consolidated onto a single platform that includes borrower’s financial information, facilitates mobile loan payments, and sends automatic digital updates about payment deadlines.”

Digital payments

Dean Wallace is practice lead for real-time & digital payments at ACI Worldwide:
“With real-time payments rolling out everywhere, the next phase is actually riding those new rails and replacing some outdated modes of payment type. Cheque, paper invoices, cash and, dare we say it, plastic? Theadoption of real-time payments is enabling the movement of funds in mere seconds, even milliseconds. This is perfectly coupled with the absolute ubiquity of mobile and internet in the new digital age. Bringing real-time payments together with digital is made all the more easier with APIs (application programming interfaces, for the uninitiated – an easy and secure way to connect between systems) becoming the market new norm and epitomizing sound digital technology. The potential to replaceoutdated payment experiences with promises of vastly improved customer experience, near eradication of fraud, drastically reduced chargebacks, easy merchant acceptance and point of sale queue-time removal, will see the pace of market exploration and digital payments adoption pick up in 2019. The markets that are already doing this, like India and parts of South East Asia, will continue to increase transactional volume. Europe’s PSD2 directive comes online towards the end of 2019 and so we will see early adopters there, including updates to existing non-card rails. The U.S. and Canada aren’t far behind with their own initiatives too.”

Chris Jones is CEO at Youtap:
“As countries try to reduce the use of cash, in particular in Southeast Asia, we believe that the emphasis on consumers first is limiting the uptake of services. It’s time to focus further upstream with merchants. Developing data infrastructure to ensure merchant success will be the biggest trend for payments. Rewards, interoperability, and supply chain savings will be the key drivers which incentivize merchants to go digital and ensure payment ecosystem success in 2019.”

Connecting payments to AP

Nilay Banker is founder & CEO of Inspyrus
“As we head closer to 2019, one of the biggest issues impacting organizations is that  payment solutions are fundamentally disconnected from invoice automation, supplier enablement and dynamic discounting solutions which are essential to modern accounts payable (AP) processes. AP operations face significant challenges managing payments to their suppliers, as most are made via paper checks — a time-consuming, expensive and inefficient process. Some organizations have started to make ePayments through their banks, however they don’t provide the technology and services required for a successful AP payment program. Banks lack the focus and resources required for continuous ePayment adoption, leaving customers to manage multiple payment methods, payment reconciliation and updates to supplier data.
With so many payment rails – and with buyers and suppliers in so many different places on their digital transformation journeys – how can a company’s AP  department  in 2019 ensure that vendor relationships remain strong, while navigating differing payment needs?
The answer is combining essential invoice processing services into one solution, delivering fully integrated invoice automation, payment automation, dynamic discounting, and supplier enablement. This provides a single application for managing the entire process from invoice capture through to payment reconciliation—eliminating the burden on AP & IT and maximizing cash-back rewards.  Customers no longer have to switch between two different applications to handle invoice processing and supplier payments. Moving forward, organizations must pursue the new – as in “the truly better way” that challenges conventional business-as-usual thinking. Implementing incremental improvements to make payments more efficient is not innovation. It may produce some productivity gains, but for real change and innovation to occur, organizations must take a fundamentally new approach to invoice processing and supplier payments that breaks away from legacy technology and solutions.”

Faster payments

David Keenan is svp, product management, card services at Fiserv:
“The number one biggest trend in the payments business going into 2019 is the move to faster funds.. Also commonly known as the move to real-time payments, the ability for consumers and businesses to debit and credit funds between accounts in real-time will have seismic implications across multiple payment ecosystems. For example, the ability to distribute funds in real-time will enable business to consumer and government to citizen use cases that disrupt ACH-based payments and improve customer satisfaction. Businesses will choose to get paid via real-time funding, causing a rethink of traditional roles in point of sale acquiring and value exchange. Importantly, risk and financial crime management solutions will have to dramatically upgrade to handle the volume and nature of activity expected in an environment where funds can be irrevocably moved and retrieved instantaneously.”

Rob Eberle is president & CEO of Bottomline Technologies:
“There are several trends, such as faster payments, open banking and the cloud, that are driving a digital transformation of business payments, but the most important is the expectation of the customer. Today’s payment leaders have become accustomed to leveraging technology for a variety of everyday tasks. This drives change in business payments but it also means business payment technology must be able to meet the established consumer expectation of convenience, speed, flexibility, intelligence and security.”

Restaurant payments get intelligent

Gordon Gardiner is CEO of TableSafe:
“Business intelligence, and by that I mean the gathering of data about both the customer voice as well as business analytics, is what every effective restaurateur needs today. The focus has been on security, which remains important, but ultimately a restaurant has to run efficiently and understand its customers. Certain pay-at-the-table solutions offer the ability to put business intelligence to work in a way that not only is convenient for the customer but also enhances the restaurant aesthetic. Incorporating technology into the dining experience is happening now, to the benefit of the restaurants and their customers.”

Payments bridge the digital and physical world

Raj Rajgopal is head of the Digital Business Strategy Group at Virtusa:
“Payments is the foundation in the disruption of industries as businesses seek to expand their services to customers by moving into adjacent businesses.  In 2019 payments companies like Amazon Pay, PayPal,  and others will bridge the digital and physical world by offering merchants the ability to accept digital payments online and at retail stores. They will also expand beyond payments by offering value added services, such as credit and insurance, at the point of sale. Payments will also become more frictionless (faster and cheaper) allowing platform players like FAANG (Facebook, Amazon, Apple, Netflix and Google) the ability to stitch together additional services such as ecommerce, personal services (dating, laundry, parking, etc.), travel, entertainment, insurance, media and financial services together thus gaining a tighter grasp of customers by monetizing them through timely and relevant offerings.”

Mobile payments

Mary Ann Miller is head of fraud strategy for Varo Money:

“Over the last decade mobile payments have transformed global banking in a major way. More recently, the transformation and modernization of payment platforms, rails and messages have provided banks and financial institutions with an opportunity to roll up their sleeves and fill the whiteboard with innovative products and services that elevate the mobile banking experience to new heights.
These new payment messages will ultimately allow a flexibility that financial institutions — large and small — can finally be excited about. Imagine attaching an invoice with a request for payment for a small business, a consumer putting a down payment on a car or an insurance company transferring emergency funds to a  consumer in a matter of seconds — These are just a few of the many innovations that will soon become a reality.”

Fully integrated commerce

Matthew Vettel is managing partner at Great Hill Partners:
“Many articles are written about “omni channel” payment management solutions, but these solutions require changing bank relationships, changing existing POS devices, and/or creating custom dashboards.  The omni channel problem can be effortlessly solved without the incremental costs and headaches with a fully integrated ecommerce and diverse POS device transaction management for enterprise solution.”

This article first appeared on October 18th, 2018 on Tear Sheet.


The big push. All hands on deck. Make or break the year. Yes, the holiday shopping season is soon upon us, and merchants are preparing to claim their fair share of sales. Deloitte’s annual forecast for the holiday season predicts holiday retail sales could top $1.10 trillion this year, an increase over the $1.05 trillion in sales between November 2017 and January 2018, as reported by the U.S. Commerce Department. Often lost amid this hyper-focus on sales is the need to protect against friendly fraud, when customers dispute legitimate transactions and obtain refunds for purchases they actually made.
While a robust holiday shopping season can do wonders for revenue, it can also result in increased chargeback headaches and costs for merchants and issuers, particularly if they don’t have the right processes in place to reduce billing confusion and prevent fraud. To prevent chargebacks, the best defense is a good offense, starting with implementation of a shared-data platform.
Holiday Shopping Drives Friendly Fraud
According to the LexisNexis True Cost of Fraud Study 2016, approximately 28% of total fraud losses were the result of friendly fraud and chargebacks. In contrast, “true fraud” accounted for roughly 24% of those losses. Given the volume of holiday sales, it is not surprising that friendly fraud is at its peak during this same period. Consumers receive their credit card statements and the reality of their expenditures triggers buyer’s remorse. Subsequently, they contact their issuing bank to relieve their pain by getting some charges reversed. Without detailed transaction information and fearful of losing valued customers, the issuer often has no choice but to offer a refund and initiate a chargeback.
For many businesses, this sharp increase in friendly fraud can be extremely painful with the resulting chargebacks that follow in January. Adding to the misery are customers disputing legitimate transactions due to billing confusion, such as the merchant’s name on the billing statement not matching their trading name. In all, these disputes that escalate to chargebacks  increase loss of revenue and merchandise, compounded by the fines and fees applied by acquiring banks.
How Shared-Data Platforms Prevent Friendly Fraud
The bottom line is that it’s the merchant’s responsibility to adopt strategies that protect them from a chargeback system that has not evolved to keep pace with the increase in multiple payment channels and e-commerce. Rather than take a siloed approach to managing consumer disputes, merchants and issuers must collaborate and share transaction information to resolve issues at the earliest possible stage, to deliver a better customer experience and prevent chargebacks.
Transaction information can include:

  • Product or service purchased
  • Transaction amount and date of purchase
  • Payment method
  • Merchant name and contact information
  • Type of device used for purchase
  • Customer name, user name, IP address, phone number, and email address

Via their online portal and banking app, issuers can then share this information with consumers to provide clarity on questioned purchases, and provide their customer care team with the necessary data to resolve disputes quickly and easily.
In addition, issuers can use customer information to identify a suspicious pattern of behavior to flag true fraud. That information includes:

  • Cardholder transaction history
  • Previous disputes files
  • Refunds issued
  • Account delinquency

By utilizing data-sharing platforms, issuers and merchants can leverage large databases to combat online fraud. When shared between the merchant, issuer, and customer, this data can be instrumental in quickly determining whether a transaction is legitimate or should be identified as a compromised account.
Sharing Data as a Pre-Emptive Strike
With the holiday shopping season fast approaching, merchants and issuers should consider implementing shared-data platforms now. Given the inevitability of friendly fraud and disputed transactions, having systems in place before the new year will go a long way towards making January a month of celebration for a robust fourth quarter, rather than thirty-one days of misery.
Contact us to learn how Verifi’s collaboration solutions can help you maximize profits from holiday sales by preventing friendly fraud and chargebacks.


Advances in e-commerce and payments have made completing purchases easier than ever for busy consumers. Whether signing up for subscription services for food, cosmetics, entertainment, or making an impulse buy on their mobile phone, consumers expect a frictionless experience. While card-not-present (CNP) merchants offer new ways for their customers to shop, their ongoing challenge is to maximize sales without increasing fraud and chargebacks. Frictionless transactions have a darker side, allowing consumers to easily dispute transactions which often result in costly chargebacks. Darker still is the risk of sophisticated fraudsters exposing vulnerabilities they can leverage to steal from merchants and consumers.
Certainly, consumers must take steps such as shopping at reputable websites, creating strong passwords, and not clicking on phishing emails to protect themselves from cybercriminals. At the same time, they rely on merchants to use the latest security tools to protect them and their personal data from hackers. Taking a multi-level approach for security enables CNP merchants to protect their customers and themselves from fraud, using tools such as geolocation, biometric analysis, address verification, CVV, IP Intelligence, 3 Domain Secure, and SSL.
Cybercrime can come in many forms, including stolen credit card details for card testing, diverted delivery of goods to an address not connected to the credit card, online skimming, and fraudulent credit cards. Any of these fraud schemes can destroy consumer trust in merchant security measures. In turn they can compromise a merchant’s relationship with both new and long-time customers when large orders, new credit card numbers, or a simple address change could raise suspicion. Without ensuring a secure connection, brand loyalty wanes and merchants have a much more difficult time preventing fraud and chargebacks.
 A Balancing Act for CNP Merchants
CNP merchants are challenged to implement a fraud prevention strategy that effectively protects consumers, without being so strict that they turn away legitimate sales. Merchants are conflicted: too little security and their company makes the headlines in not a good way. Too much oversight and they turn away good customers who take their business to a merchant that in their mind, manages e-commerce security more effectively.
What’s a Merchant to Do? Start with These Tips:

  • Be proactive and never overreact. An overreaction can result in the enforcement of strong, sometimes overly restrictive, fraud prevention strategies and filter settings.
  • Find the right balance of tools that cover your business without being too rigid. Consider machine-based solutions versus purely rules-based options. Machine-based solutions use the same data that tracks and predicts customer shopping preferences to help CNP merchants detect fraudulent transactions before they happen.
  • Make sure your data is accurate. Inaccurate or incomplete data is a root cause of false positives. When fraud alert solutions use aged or inaccurate data, the false positive rate increases. For example, alert systems that rely on associate-reported data from sources like TC40 can lead to false alerts by signaling a dispute when none exists (e.g. the fraud issue is old and has been resolved).
  • Choose agile tools that allow you to adapt to changing conditions.
  • Ensure your tools offer reporting that enables you to understand the effectiveness or lack of effectiveness of your security solutions.
  • Implement a comprehensive multi-channel solution for all points of your business, including mobile, device and IP intelligence.

E-commerce consumers rely on merchants to safeguard their data and protect them from fraudsters. At the same time, they expect frictionless transactions and flawless product delivery. Merchants struggle to put protection tools in place that will not interfere with legitimate sales. The resulting false positives cause lost sales, while concurrently compromising a relationship between merchant and consumer that is hard-earned and even more difficult to recover.
Contact us to learn how Verifi’s collaboration solutions can help you prevent fraud and chargebacks while mitigating false positives.


For today’s customers, e-commerce provides an easy way to make a purchase. With the click of a mouse, tap or swipe, transactions are completed with minimal effort. For a merchant, a duck paddling furiously to stay afloat might be an apt metaphor. Their challenge is making the entire process easy and transparent, while also engaging e-commerce customers during and after the purchase cycle to build customer loyalty and grow their business. An engaged customer is a loyal customer, one who will return to make more purchases and feels a connection to the brand.
For omni-channel shoppers, merchants must seem virtually invisible during the purchase process. Customers want a hassle-free experience from the moment they decide to buy until the product arrives at their doorstep. They don’t care about the logistics required to ensure their package arrives, their only concerns are that they get what they ordered and it arrives on time.
While the e-commerce business model has helped many merchants experience new and extended growth, it has eroded traditional brand relationships. Where once shoppers would visit a brick-and-mortar store, interact with store employees and resolve issues with store managers, today’s e-commerce customers handle everything virtually – and, in most cases, anonymously.
Without a relationship with the merchant, customers have little tolerance for error and will not hesitate to bypass the merchant and address disputes directly with the issuer. The result – refunds, lost merchandise, and chargebacks.
Merchants must work more diligently than ever to create a relationship with their e-commerce customers. In doing so, there will be more wiggle room should a customer experience a glitch with their transaction, asserting the opportunity to resolve the issue quickly. The resulting uptick in brand loyalty helps reduce transaction disputes and chargebacks.
Best Practices to Encourage E-Commerce Customer Engagement

  • Not all customers are equal. Treat your returning customers the best. Whether it is launching a new product or introducing a special promotion, inform your regular customers first. After all, they are the lifeblood of your business.
  • Consider implementing a tiered loyalty program to reward loyal customers with special benefits. This segmentation strategy strengthens your relationship with dedicated customers, influences further purchase behavior, and increases brand loyalty.
  • Make building brand loyalty a company-wide goal. As you determine your company’s key performance indicators, factor in building long-term relationships with your customers. Buy-in must come from the top before it can be successfully executed throughout your organization.
  • Pay attention to the details. Brand loyalty isn’t simply the result of attractive discounts or gifts. Use your CRM systems to track customer birthdays or anniversaries, and email them to let them know you consider them as people rather than simply as accounts.

Brand loyalty emanates from a foundation of trust. Affinity for a brand can be passed down from generation to generation, resulting from several outstanding brand experiences – or in the case of millennials, it can be achieved through a combination of quality products and social consciousness.
Each example shares a common theme. Brand loyalty is earned and does not come easily.
How to Earn Brand Loyalty

  • Make transparency a priority. Ensure that return policies are clear, billing information is comprehensive, and provide contact information to resolve issues. When a brand commits to transparency, it builds consumer trust and helps form a lifelong relationship.
  • Fix issues quickly. Most customers know that mistakes happen and will forgive you if you resolve their issue in a timely fashion. Train your customer care team to address their concerns empathetically and make sure you fix the problem to best prevent future occurrences.
  • Know your customers well. In theory, the customer is always right, but there are notable exceptions. Friendly fraud and true fraud are realities every business must face. Know your customer history well and have information readily available to differentiate honest customer confusion from fraud.

Engaging e-commerce customers to build brand loyalty and longevity can go a long way towards maximizing near-term and future sales. A merchant that successfully builds long-term relationships with their customers, particularly in the e-commerce marketplace, can help ensure that transaction disputes are a rarity and chargebacks are rarer still.
Contact us to learn how our collaboration solutions can help you create customer loyalty by responding to and resolving customer billing questions quickly, preventing them from becoming chargebacks.


M-Commerce and frictionless purchasing, once industry innovations, have evolved into a necessity for today’s merchants. Once embraced only by innovators and early adopters, these and other advanced payment methods have “crossed the chasm” into acceptance by the majority of consumers. Beyond the convenience new payment methods provide consumers, can they be used for extending brand recognition?
Merchants have invested to keep up with consumer demand to shop when they want, where they want and how they want, and it’s paying dividends. A Harvard Business Review study found that omnichannel shoppers are more valuable than consumers who engage with retailers in a single place. They spend on average 4% more money every time they are in a brick-and-mortar store, and 10% more when shopping online, compared with shoppers who interact with a brand on just one channel. While this new omnichannel retail environment has been a boon for many retailers, it has left them vulnerable to both true fraud and friendly fraud.
With a few clicks or swipes, consumers can make a purchase without ever communicating with the merchant. This new freedom to shop at the speed of light can come at a hefty price if merchants are not careful. In many cases, merchants have become a commodity, lost to the anonymity of omnichannel transactions. When a brand loses its identity, it is far too easy for a consumer to rationalize committing fraud against a brand for which they have no affinity or loyalty. Given these developments in payments, extending brand recognition in new channels becomes imperative.
Revisiting the Value of a Brand
A brand is defined as the set of all tangible and intangible attributes that distinguish a product, company, organization, or cause. At its core, a brand is a promise. It is designed to positively impact the collective perceptions about a product, service or organization, forming a relationship that’s built on past experience with the brand and future expectations.
A strong merchant brand is a safe place for customers to return to again and again to make purchases from a resource they can rely on for a seamless and even pleasurable shopping experience. Achieving this level of brand loyalty is essential to a company’s ongoing growth and requires a long-term investment in its people, technology, and customer service. But that’s only part of the equation. Without a strong brand recognition strategy, the investment in building the brand may not be enough to overcome the risk of becoming a faceless and nameless consumer shopping channel.
The Role of At-a-Glance Brand Recognition for Merchants
There is no mystery to brand recognition – it’s how consumers “recognize” your business. Whether it is a memorable business name or visually appealing logo, an effective brand recognition strategy results in an at-a-glance identification of the brand, which is imperative when presented in a tightly constricted space such as an electronic billing statement. Recognition of a merchant’s brand on a billing statement can prevent consumer confusion and successfully reduce instances of consumer-initiated disputes.
Can Brand Recognition Help Reduce Friendly Fraud and Prevent Chargebacks?
Omnichannel marketing and frictionless payments are a consumer and merchant dream until a transaction dispute creates a nightmare scenario. Consumers dispute charges in three ways: friendly fraud claims, true fraud cases, and unrecognized charges.
Consumers typically contact the issuer first to dispute a charge on their billing statement, because they believe it is their best or only option to resolve the issue quickly and painlessly. Unfortunately for the merchant, the issuer often does not have enough information to address the customer concern, approves a refund and initiates the chargeback process, resulting in lost merchandise, revenue and the addition of costly fees.
Let’s revisit that scenario with one variation – at-a-glance brand recognition and transaction details available on the consumer’s banking app. In this situation, imagine if the issuer could access transaction data from the merchant and/or include it on the banking app.

  • Merchant details including name, address, customer service phone number and relevant links
  • Information to prevent customer confusion over how and when the purchase was made by including the type of purchase device and device name
  • Consumer information including the IP address of the purchase device, phone number, email address, name and username

By providing this level of detailed information, merchants and issuers can deliver an excellent customer experience, build brand loyalty, and earn consumer trust. It can also dissuade friendly fraudsters by removing merchant anonymity from the equation, personalizing the brand relationship, and preventing false claims due to buyer’s remorse.
Enabling at-a-glance brand recognition on credit card statements can significantly prevent friendly fraud and reduce chargebacks. Contact us to learn how Verifi’s Order Insight® can help increase brand loyalty and enhance the customer experience.


Transaction disputes and managing chargebacks are facts that will always be part of the world of business. Ever since the introduction of the Fair Credit Billing Act in 1974, regulations are set to prioritize protecting consumers from prejudicial or unfair billing practices.
At the time, the Fair Credit Billing Act was a logical response to the explosion of consumer credit in dire need of regulation. However, with the emergence of e-commerce, mobile commerce, and the Internet of Things (IoT), the pendulum has swung overwhelmingly to support the rights of the consumer even more, placing merchants and issuers at a disadvantage when it comes to managing chargebacks.
Consumers now shop by their computers, use their mobile devices, or make purchases simply by talking to Alexa or Google Home. The personal relationship between retailer and customer is fading away, giving shoppers more comfort in the belief that they are avoiding any friction if they dispute a transaction or engage in friendly fraud.
Dispute management has become so unwieldly that in April 2018, Visa revised their dispute process by implementing Visa Claims Resolution (VCR) in an effort to streamline and simplify the dispute workflow. To achieve this goal, VCR must rely on automated technology to some degree, which led to the development of Visa Merchant Purchase Inquiry (VMPI), a chargeback and dispute prevention mechanism designed to reduce dispute volume with merchant-issuer collaboration.
In turn, Mastercard is planning to introduce their new dispute resolution process, MasterCom (MCOM) Claims Manager, in late 2018 or early 2019.
The introduction of these solutions could result in a sea change for the payments industry, which will have a significant impact on merchants and issuers. Those who have the platforms and operational policies in place to meet Visa’s and Mastercard’s streamlined processes and shortened resolution time frames could successfully drive down their chargeback volume and corresponding costs. Those who remain stagnant and do not meet the compliance of these solutions will continue to pay a hefty price.
Collaboration is the new normal
Visa’s shift of the dispute process from litigation to liability has made merchants re-think their relationships with issuers – or lack thereof. Historically, merchants and issuers have addressed chargebacks fairly separately, but these new models are compelling merchants to embrace a more collaborative approach to reduce their losses due to fraud and chargebacks. Issuers have their own motivation – reducing the $12 billion in costs, which they absorbed from chargebacks in 2017, and maintaining strong customer relationships.
With less time to resolve disputes, merchants understand that the earlier in the process a customer’s issue is addressed, the less they will be subject to damaging liability costs. Since up to 76% of consumers bypass the merchant and contact the issuer first with a dispute, it is in the merchant’s best interest to provide transaction details to the issuer to help mitigate unnecessary chargebacks. That cannot happen without collaboration. In turn, issuers must adopt this collaborative approach and use the transaction information to expedite the dispute process and solve customer issues quickly, which will invariably help reduce their liability costs.
The necessity for a total solution to protect payments
With quickly evolving payment channels, there is a great challenge to equally accelerate technological development to address and prevent vulnerabilities to fraud and resulting chargebacks. Adding in the introduction of Visa’s and Mastercard’s solutions for a streamlined dispute process, merchants should consider adopting a comprehensive solution that protects their business on both the front and back-end of disputes. Just like merchants should adopt best practices that offer 360-degree protection against data breaches, they should employ comprehensive solutions for responding to transaction disputes and managing chargebacks.
Features of a comprehensive payments solution should include:

  • The ability for an issuer to alert a merchant to a dispute, so the merchant can take action to provide a resolution quickly before it becomes a chargeback.
  • Issuer access to key transactional data and order information to mitigate friendly fraud and validate legitimate sales at customer inquiry.
  • Compelling evidence readily available for the dispute response process if a customer files a chargeback that a merchant elects to challenge.

Contact us to learn how Verifi’s collaboration solutions can provide you with a comprehensive platform to prevent chargebacks, reduce liability costs, and provide a better customer experience.
 


You’ve invested in tools to gather data on customers, including transaction data for purchase history, buying patterns that help generate highly targeted offers and personalized messages. The data you accumulate helps you discern what offers are effective, which marketing tactics generate the best results, and your customers’ preferred digital buying channels.
There’s no question that capturing and analyzing consumer purchase behavior is critical to growing your business, but are you getting the most value out of your investment? If you are not using it to build relationships with your customers or sharing it strategically with issuers who are an integral part of your payments ecosystem, the answer is a resounding no.
The Pros and Cons of Data Analytics
Transaction data and analytics can help to attract customers to your website, convert them, increase their average order, and help to make personalized communications to build future purchases.
What data can’t do is build a true personal relationship with your customers. One-click purchasing and frictionless payments, by their nature, make the transaction process impersonal, because there is no motivation for the customer to form a bond with the merchant.
This ultra-convenient business model doesn’t become a problem until a customer disputes a transaction, typically bypassing the merchant and contacting their issuing bank directly. With stiff merchant competition, a single bad experience can result in a lost customer since they don’t feel a connection to the merchant.
Merchants can reverse this trend by using their CRM systems to engage more effectively with customers and capture data they can use as compelling evidence for dispute responses. In addition, sharing transaction data with issuers will help resolve a dispute before it becomes a chargeback, because issuer customer service teams will have sufficient information to clarify customer confusion or discern friendly fraud from true fraud.
CRM Systems for Nurturing Customers and Responding to Chargebacks
Regular customer contact derived from data captured in your CRM can fill the relationship gap created by e-commerce. Consistent communication featuring special offers or compelling content builds brand loyalty and creates a lasting connection with your customers. A strong bond may help to reduce friendly fraud, as customers may be less likely to commit a version of cyber-shoplifting when they don’t perceive the merchant as a faceless company that doesn’t care.
Your CRM system also has the capability to capture information you can use as compelling evidence in chargeback representment with customer and transaction data such as:

  • Customer identity (email address, physical address, name, etc.)
  • Purchase history and usage information
  • Shipping details (confirmations)
  • Contact history (email/phone communication)

Optimizing your customer and transaction data to prevent disputes and chargebacks helps to ensure that you are protecting your business – but what about the security of your customers, the very future of your business? Many fraudsters pursue vulnerabilities in select accounts, which, unfortunately, are considered small-scale attacks by today’s standards. Large-scale attacks on entire databases are increasing in frequency on a world-wide basis.
Data Breach Protection Best Practices
The larger picture in data management must include a view to protecting against vulnerability to data breaches. By employing these best practices, you can protect your customers’ and your own company’s data.

  • Identify phishing emails: The most common cause of cyber breaches are phishing emails, the majority of which originate from internal staff who open fraudulent emails.
  • Emphasize password security: Ensure that your employees protect your most sensitive data by requiring them to create strong passwords when they activate or update their accounts.
  • Make sure confidential information stays confidential: Train employees against accidentally leaking confidential information and put measures in place to prevent ex-employees from accessing and distributing that data.
  • Stay current with software protection: Install the most current and comprehensive antivirus and anti-malware software throughout your network. Have firewalls in place to prevent unauthorized access to your network.
  • Conduct scheduled tests and audits: Cybercriminals constantly seek new ways to force a data breach. Conduct regular tests and audits to identify potential vulnerabilities and confirm that your data is secure.

Using data to nurture customer relationships and build brand loyalty should be an integral part of your marketing program. Making customer and transaction data available to issuers can be your secret weapon to fight back against unnecessary disputes and chargebacks.
Contact us to learn how data-sharing solutions can help ensure you get the most value out of your customer and transaction data and transform it into a powerful asset in your fight against chargebacks.
 


In more than 8 in 10 cases, when consumers contact the merchant first to dispute a charge, it is resolved before it becomes a chargeback. This finding from the recent Javelin Strategy & Research report, “The Chargeback Triangle,” should be encouraging to any merchant that deals with chargebacks. But compare  with another finding from that same report: customers bypassed merchants and went directly to their issuer in 76% of cases. Invariably, issuers do not have enough information to resolve disputes and prevent them from becoming chargebacks.
Merchants and issuers generally agree that chargebacks are bad for business. The difference is how each defines “bad for business.”
The Merchant Viewpoint
Customers typically blame the merchant when there is an issue with a transaction. Merchants are best fit to resolve issues their customers are experiencing, but they’re often left out of the loop. Whether it’s confirmation that a shipment was delivered, the proof of customer identity or authorization at time of purchase, or something far less innocent, the merchant usually has the information needed either to clear up confusion, uncover friendly fraud, or stop first-party fraud in its tracks.
Motivated to avoid losing a sale or incurring chargeback fees, the merchant is more than willing to take the time to resolve the dispute. But if they don’t know about the dispute because the customer contacted the issuer first, they only learn about the problem when they see it as a chargeback.
Most non-fraud disputes are the result of customer confusion – which merchants can address easily when there are problems with the delivery of a good or service. Simple inquiries as such are often brought straight to the issuer, who lacks pertinent information to properly resolve.
The Issuer’s Perspective
The main mission of the issuer is to resolve the customer dispute quickly. As The Chargeback Triangle points out, the longer it takes to resolve a dispute, the more likely it is for the customer to stop using the issuer’s card and replace it with a competitor’s. Now, that’s bad for business. Because issuers have little information about the transaction, including the merchant’s contact information, the tendency is to offer a provisional refund and initiate a chargeback. In many cases, issuers choose to write off small-balance disputes and absorb that cost, all in the spirit of ensuring customer satisfaction and loyalty.
Working Together to Achieve a Shared Goal
Because of their conflicting positions on how to deal with disputes, merchant-issuer collaboration does not come naturally. But when you break down the cooperation needed to its most basic form, it is easily achievable and even painless for both parties.
At its very core, collaboration is all about data-sharing. Whether this involves customer and transaction information provided by the merchant for the issuer’s customer support team to access at the time of a customer inquiry, or “compelling evidence” on demand to prevent filing an unnecessary chargeback, data must be available during key points in the dispute process. Data-sharing can also extend to customers through banks’ online and mobile statements – with full transaction and merchant data promoted – eliminating confusion by keeping customers fully informed about their transactions.
What to Look for In Data-Sharing Solutions
The most effective data-sharing solutions:

  • Feature an open channel for data-sharing as well as direct communication. Data must be easily accessible to ensure timely responses to inquiries.
  • Deliver a real-time data exchange. If the data is not current, it can be difficult to make informed decisions.
  • Include order details, such as product name or service purchased, merchant name and contact information, shipping details, customer transaction and dispute history.

Greater cooperation between merchants and issuers is the key to reducing the number of chargebacks and their associated costs. Contact us to learn how collaboration solutions can help facilitate data-sharing to resolve disputes at customer inquiry and prevent chargebacks.


The pace at which merchants must react and respond to transaction disputes is staggering. Due to the outdated dispute and chargeback process, it’s a race against a ticking clock to launch a successful representment case.
The existing transaction dispute process lacks cohesion and collaboration, creating a never-ending cycle of unnecessary chargebacks, lost revenue, and increasing liability costs.
It’s tempting to give in and accept the results of disputes as the cost of doing business, but that is a short-sighted approach. Instead, it’s time for merchants and issuers to better understand the challenges in the chargeback system and take a strategic approach to end the stress, costs, and uncertainty surrounding transaction disputes.
Why Transaction Disputes Happen
The main drivers of transaction disputes include:

  • True fraud. Intentional or true fraud applies when a consumer’s credit or debit card data is compromised and used illegally. Fraudsters have become adept at stealing credit card and personal information from consumers.
  • Friendly fraud. Friendly fraud can either be an intentional or innocent act. Intentional friendly fraud is the same as shoplifting – the consumer steals from the merchant by claiming that the product was never delivered, requests a refund without returning the product, or has buyer’s remorse and disputes the transaction. Unintentional friendly fraud happens when a consumer is confused about a charge – such as forgetting they made the purchase, or seeing an automatic renewal on their statement that they don’t remember authorizing.
  • Merchant error. Errors can include a duplicate credit card charge, confusing billing descriptors, lost delivery, or not canceling a subscription – which can result in a chargeback.
  • Ease-of-access. Just as it’s exceptionally easy to make a purchase, it’s just as easy to dispute the transaction. The simplicity of online sales with stored credit card and password data, delivery details, and instant shipping, makes one-click shopping a breeze. When remorse sets in, consumers simply click “Dispute Charge,” to initiate the transaction dispute process. Merchants are then forced to choose between challenging the chargeback to save the sale and limit their liability, or accepting it to protect their relationship with the customer.

Collaboration to Limit Transaction Disputes
Inevitably, consumers will dispute charges. What isn’t assured is that a dispute will result in a chargeback if merchants and issuers work together to resolve the issue.

  • Evidence infrastructure. Merchants and issuers need to use available tools that collect and store critical purchase details, including confirmation emails, proof of delivery, complete purchase details, and customer transaction history. This information enables effective customer service support and can help build a successful dispute response case.
  • Customer service support. Issuer and merchant customer service teams need fast and easy access to transaction information to solve the customer’s problems quickly, identify cases of friendly fraud, or identify true fraud.
  • Merchant-issuer collaboration. With access to the right information at the right time, issuers can react quickly and alert the merchant to the dispute. This allows the merchant to work directly with the customer to resolve the problem before it becomes a chargeback. When this happens, the customer has a better experience and both issuer and merchant avoid costly losses and fees.

Need more evidence? Take a moment to review the Visa Claims Resolution (VCR) changes to understand that collaboration has evolved from a suggestion to a strong industry recommendation.
Contact Verifi to learn how Order Insight™ can enable true collaboration that will help you change how you can operate within the current transaction dispute process without absorbing the costs of chargebacks.