The payments ecosystem has evolved significantly over recent years. The rise in m-commerce, in-app purchases, same-day delivery, and subscription options has created an impersonal and disconnected relationship between consumers and merchants. This has had a two-fold impact on disputed transactions: consumers often don’t know who to contact when they have transaction disputes or inquiries, and it has become easier for consumers to commit friendly fraud.
When a consumer initiates a dispute, the issuer and the merchant don’t actually work together to determine if the problem with the transaction is either fraud or theft, leaving them at a significant disadvantage. When they collaborate, the dynamic shifts, giving merchants and issuers the ability to prevent fraud and unnecessary chargebacks.
Just as merchants and issuers have evolved to meet the needs of consumers who have embraced omnichannel marketing and digital billing, they also must change how they approach chargeback management. If they don’t adapt, their businesseses will continue to absorb the ever-increasing costs driven by an antiquated chargeback process.
The Power of Transaction Data
In today’s digital age, every click, swipe, tap, like, and comment is captured and saved. This data has become one of the greatest assets for merchants to resolve a dispute before it becomes a chargeback. Examples include:
- Transaction data. Customer order information, cost, device name/ID, transaction date.
- Merchant data. Name, address, contact information, refund/return policies, warranty information, and merchant email address.
- Product data. Product description and image.
- Customer history. Unique customer data including name, physical address, phone number, email address, IP address, and customer dispute history.
- CRM data. Includes data such as AVS and CVS details, customer address, copies of all emails and other digital communications, proof of delivery and tracking numbers, purchase medium, and customizable options available.
The Value of Data Sharing
This critical merchant data should not remain the sole domain of the merchant. When shared, it can be a powerful tool in the fight against chargebacks:
- Allows issuers to make informed decisions. With access to this data, issuers can quickly differentiate valid problems from friendly fraud and stop unnecessary chargebacks.
- Connects the customer with the merchant. Issuers are typically the first point of contact for the cardholder. With shared data, the issuer can re-direct the customer to the merchant, allowing the merchant to resolve the customer’s problem.
- Helps build a successful chargeback representment case. Merchants have limited time to respond to a chargeback, and this data is critical in building a successful representment case.
- Protects brand loyalty. A quick resolution to a customer’s inquiry, provides a positive, simple experience
Collaboration to Fight Friendly Fraud and Chargebacks
When it comes to chargebacks and friendly fraud, the customer usually has the upper hand. However, when merchants and issuers collaborate by sharing data, the tables are turned.
Friendly fraudsters are caught in the act and honest customers have their problems solved quickly, while the costly and exhaustive chargeback process is avoided. Merchants and issuers save time, money, resources and customers – everyone wins.
to learn more about our merchant-issuer collaboration tools, including Verifi Order Insight, which have been developed to ensure the right parties have the right information at the right time to stop chargebacks and friendly fraud in their tracks.