Fueled by increased card transaction volumes (and the corresponding increases in disputes processing), Visa and Mastercard have both made significant changes to the management of disputes through their networks.
Additionally, with looming mandate deadlines for the Visa Claims Resolution (VCR) and MasterCom Claims Manager (MCM) programs, merchants and processors alike need to know what to expect.
Highlights of Mastercard’s changes include: Enhanced support for electronic commerce and Mastercard’s MoneySend program (including the addition of person-to-person (P2P) and account-to-account (A2A) transfers); and notifications to issuers when cardholders purchase cyber currency or “high risk” securities.
Visa has included technical changes to its Cloud Token Framework (CTF) and has added new message reason codes related to mobile banking. Additionally, Visa has made mandatory multiregional changes to the Visa Resolve Online (VROL) program for some of its existing components, and processors must be ready to support these changes by the VROL mandate date.
Both Visa and Mastercard have made changes to technology (online messaging), reason codes, terminology, and overall disputes lifecycles.
It has been observed that without good automation, these mandates may be difficult to manage using existing manual processes and procedures.
This applies to issuers (i.e., financial institutions), acquirers (i.e., merchants) and the processors that support them.
Networks also want initial inquiries that could potentially become disputes to be vetted for “transaction validity" This feature is particularly relevant to issuers.
Visa has made its Visa Merchant Purchase Inquiry (VMPI) system available to processors so that a transaction subject to VCR processing can be resolved early in its life cycle before a dispute is filed. Mastercard now requires more up-front information from issuers before chargebacks can be filed. It is also leveraging its acquisition of Ethoca to help reduce fraud that can lead to chargebacks.
So what is the most important factor for issuers, acquirers and processors to be aware of right now?
Visa and Mastercard have both shortened the time windows for responding to dispute events, forcing issuers, acquirers, and their processors to align with new time window rules while adapting to notable changes in disputes lifecycles. While Mastercard and Visa have extensively publicized their new processes, the other card brands are also making changes to disputes handling for their cardholders, so issuers, acquirers, and their processors must also monitor future mandates from these card brands to ensure that additional major changes are not overlooked.
