Visa is only three months away from launching an update of their dispute settlement process—the Visa Claims Resolution (VCR). And in attempt to help retailers understand the new adjustments, Chargebacks911 (a.k.a. The Chargeback Company) is already advising retailers on what to anticipate.
The updated VCR is intended to change the worsening chargeback situation. Universal card fraud losses may double (from 22.8bn to 43.8bn) between 2016 and 2025 period— as disclosed by the Nilson Report. Surprisingly, “friendly fraud” or scam committed by customers account for the majority of these losses. And because the dispute process is the only way merchants can fight friendly fraud, many begun waiting with bated breath when Visa promised to augment chargeback resolution.
With the edited Visa Claims Resolution scheduled to get underway as of April 15, 2018, Chargebacks911 is already breaking down the process to simplify things for acquirers & merchants— and advising them on the new requirements. According to Monica Eaton Cardone, Chagerbacks911’s Chief Operating Officer, the VCR is only as effective as the retailers’ understanding and preparedness for it.
The main changes VCR has made include;
• Shortening dispute resolution procedure to speed up the process
• Categorize reasons into codes as MasterCard did in their 2015 initiative.
According to the Chargeback Company, here’s how the VCR will likely impact your business and how to get ready for the changes.
1-Reason Code 75 has been eliminated
The “Chargeback reason code 75” which deals with “Unrecognized Transaction” has been removed. In the new VCR, issuers are expected to acquire much of the information they need from cardholders and scrutinize it before filing a chargeback claim, which is an advantage for merchants. Even though this move may not do away with any extra chargebacks, it will make sure the cases are well coded and give retailers more precise insights into claims.
2- Variation in codes across Card Issues may lead to more errors
With these amendments, retailers can no longer rely on almost-matching reason codes to help them spot and decode chargeback disputes. Business owners that utilize outdated systems or those without in-house professional know-how will suffer most.
3- There’s an additional fee (fine) for retailers who fail to present dispute data on time
A merchant who fails to give dispute information within the stipulated time frame will pay an extra fee. Visa added this rule to ensure more merchants adopt their VCR process. The card issuer has stated that retailers who don’t take part in dispute activity will automatically forfeit their chargeback dispute rights and may pay a higher fee.
The response time for a dispute is being reduced by almost half. At present, Banks have 45 to 100 days. This matches up the 15-day window most banks inflict on retailers. However, VCR’s more advanced process intends to reduce this window by 50 percent, with talks in progress to cut it down to only 20 days come October 2018.
Author Bio: Electronic payments expert Taylor Cole is a passionate entrepreneur who enjoys to write, produce music, and travel. Bestpaymentproviders is the UK’s best chargeback insurance providers company, serving both traditional and high-risk merchants.