Chargeback Updates impact on Business – Recently the Card Networks, Visa, and MasterCard updated their chargeback reason codes. This is done to minimize the chargeback frauds in the card network by introducing some new chargeback reason code to the system. Surely this chargeback updates impact on business and if you are a merchant then it surely is important for you.
As we have discussed in our other articles, the chargeback is introduced and designed to protect consumers from the credit card frauds. But many consumers use the laws wrongly. And to correct the use of chargeback laws, some changes are made to it. In this article, we will discuss Chargeback Updates impact on Business and their possible effects on a merchant.
Changes in Terminologies
We all know that the chargeback is difficult to deal with, sometimes this due to the terms that been used. The Chargeback Updates impact on Business starts with the change in terminologies. Here are some examples.
- Chargebacks are now called Disputes. Visa has made this change in the recent update, although you can still use the term chargeback.
- Representment as Dispute Response. As you can see, the new term “Dispute Response” is more clear and easy to understand.
- Transaction Enquiry – Once the customer initiates the chargeback, a transaction inquiry needs to be submitted to the VROL(Visa Resolve Online).
- Allocation – This new method to resolve the chargeback. When a dispute is initiated, the Visa first checks the internal data without directly go and file the legal charges.
- Collaboration – Dispute resolution model. Here the merchant is given with a chance to respond to the dispute with compelling evidence without being fined.
There more such changes made to strengthen the dispute reversal method. Moreover, some new reason introduced along with an update in the older ones. You can reach out to the chargeback Expertz, to get more details related to Chargeback Updates impact on Business.
Method to Handle a Dispute
There is also a change in the dispute response style. The Visa Claims Resolution or VCR has dispute flow to resolve it quickly and efficiently. This how the dispute flow takes place:
- After the cardholder initiates the dispute, the issuing back get the notification first.
- Then the issuer takes the dispute request and forwards it to the acquirer.
- The acquirer then submits the chargeback to the merchant.
- Either accepts the dispute and gives back the refund.
- Or fight against the dispute by providing the compelling evidence.
- The Arbitration and Pre-arbitration flow are possible
These new laws and chargeback updates impact on Business of a merchant. But once you familiarize yourself with these laws, it gets easy for you.
Change in Time Frame
This one of the major changes or chargeback updates impact on Business. The dispute resolution not only gets easy but also quick. Previously, the maximum time a Representment can take was 45 days. Now, it is been changed to 30 days. This helps the merchant a lot when it comes to tallying their monthly revenue.
As the chargeback ratio is also calculated by a month. It makes dispute easy to deal with. If you are facing issue while calculation your company’s chargeback ratio then feel free to contact the Chargeback Expertz. We can provide you with tips to reduce then disputes and manage the Representment.
Major Chargeback Updates Impact on Business
We have introduced the chargeback updates in brief; here are some impact on the business due to these updates.
- The Merchant will not have the appropriate time to prepare and fight a chargeback. As the chargeback time frame is reduced to 30 days the merchant will hardly have 15-18 days to collect evidence and respond.
- Quick Action is necessary. According to collaboration rules, the merchant can choose to refund or fight the dispute. Hence, a quick action required when the merchant decides to fight the chargeback.
- Understand the Allocation very well; otherwise, you can lose money. Allocation dispute outcomes will be determined by CVV2, AVS, and 3D secure responses. In case the merchant does not use this tool in their transaction processing, he can be held liable.
- Using CVV2, AVS and 3D secure responses can be beneficial for the merchant. These can act as profound evidence to fight against a chargeback. Ask your transaction processor about these security measures now.
- Finally, the un-recognized chargeback is now considered as fraud. The un-recognized chargeback has caused trouble for many chargeback cases. To make easier, Visa updated it as Fraud. This is chargeback type can cause trouble to your business./li>
Chargeback Updates impact on Business for a merchant both in the positive and negative way. It depends on the merchants, whether they are ready to walk extra miles with Visa and strengthen their technology.
Contact the chargeback Expertz, to get more details about the recent and upcoming updates. Also, get tips related to chargeback management and chargeback lawsuit. You just need to place a call at the toll-free number +1(855) 465-4723 or reach us via Skype.
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