New Initiative for Visa Chargeback

As a business owner, most of us have come to realize that credit disputes are painful, costly and are becoming more frequent than ever. Navigating the chargeback process is a painful undertaking for any business owner. Unfortunately, chargebacks are inevitable even if all the necessary policies are being followed. The rising cost of chargebacks and lack of a standardized process for addressing this growing problem led Visa to revisit its approach to managing Visa chargeback disputes.

As of April 15, 2018, Visa will implement a new chargeback initiative that will significantly change the process of disputes between merchants, issuers, acquirers and the consumer. While these changes may be more efficient, the chargeback process will become a bit more challenging, at least for now. You may ask what are these changes and how will this upcoming change affect merchant processing?

Well this new strategy, known as the Visa Claims Resolution, is aimed to eliminate invalid disputes from the system, to promote automated liability through allocation and collaboration, and to reduce the resolution timeframe. Prior to this expected change, Visa chargeback process included 22 codes used to categorize disputes. This shift will simplify and organize the chargeback process by grouping disputes into 4 new groups;

Visa Chargeback Rules - AMP Payment Systems

Visa Chargeback Rules – AMP Payment Systems

• Fraud
• Authorization
• Processing Errors
• Consumer disputes

When these disputes are filed, merchants must respond within 30 days instead of the previous 45 days. Issuers will be allotted 35 disputes during a 120-day period. After 35 transaction disputes, any disputes received will not be processed. Allocation and collaboration within the dispute groups will reduce back-and-forth communication between merchants, issuers, acquirers and, in situations where the end customer initiated the dispute, consumers. Visa estimates its new enhanced dispute process will reduce dispute resolution time frames. This will be achieved through efficient processing and a reduced need for extensive back-and-forth between merchant, acquirer and issuer to exchange documentation. The process of arbitration for each category will be set forth as follows:

  • Authorization and fraud disputes will be resolved within a 31-70 day timeframe
  • Customer and processing errors will be resolved within a 31-100 day timeframe

In matters of dispute, until an industry-wide effort is made to achieve compliance, all efforts made on an individual basis will provide a distinct advantage when it comes to facing inevitable chargeback disputes. Take action now and stay informed on the latest industry news by subscribing here.