Analysts say Visa Inc. and MasterCard Inc. are using tech, regulatory changes and strategic acquisitions to eliminate friction in the chargeback process.

But a significant achievement in frictionless chargeback is predicted to occur when the two card brands open real-time interaction between card issuers and retailers.

The Power of Real Time Issuer-Merchant Engagement

Analysts say real-time engagement between these two parties will allow retailers to give card issuers more comprehensive details about a disputed charge and item’s bought than they do now. Discussing chargebacks is easier in real-time because the issuer can tell faster if a chargeback is worth or not.

So MasterCard brainstormed on the best strategy and by March, it had taken over Ethoca— an international platform hosting over 6000 merchants and 4,000 card issuers. And now, the card network is counting on Ethoca Inc. to help it connecting issuers to merchants.

Visa Inc., on the other hand, will make this real-time interaction possible via its Visa Merchant Purchase Inquiry, an add-on to its Visa Resolve Online solution. And not just that, last month Visa Inc. took over Verifi Inc. in a bid to smooth this merchant-issuer engagement.

Verifi is a vendor of chargeback-fighting tools that link issuers and merchants.

MasterCard Vs Visa Approach

Since the launch of the Visa Claims Resolution in 2018, the card network has stopped unacceptable chargebacks by 10 percent according to Aite Group. 

The Visa Claims Resolution was the firm’s strategy to eliminate friction in the chargeback process. Aite Group also found that;

• 80 percent of claims are now automated
• Average claim-resolution times have reduced to 23 days
• Number of touch points per claim has dropped to 29% 

MasterCard started streamlining its dispute process last year when it rolled out MasterCom Claims Manager. This platform uses analytics to block chargebacks—the tech identifies a chargeback initiated after the issuing of a merchant credit. 

Besides tech, both card networks have revised their chargeback reason codes and cut down response times. 

	Chargeback Reason Codes	Response Times
Visa	Reduced codes to 22 from 24	Reduced to 30 days from 45 days
MasterCard	Eliminated some reason codesRequires issuers to gather more documents from card-owners for some codes	Reduced to 90 days from 120 days

Final Words

Both Visa Inc. and MasterCard have been working to streamline their chargeback resolution processes in different ways. 

And while the card networks are counting on their recently publicized acquisitions to enable real-time communications, some analysts are not convinced whether real-time platforms are ready for ecommerce.

Author Bio: Electronic payments expert Blair Thomas is the co-founder of high risk payment processing company eMerchantBroker. He’s just as passionate about assisting businesses get chargeback insurance providers as he is with traveling and spending time with his dog Cooper.