frequently asked questions
1. ChargebackHelp FAQs
ChargebackHelp.com is backed by a combined 30 years of payment processing, eCommerce, affiliate website management and merchant account experience. We know our business and we are more than confident we can help yours. When ChargebackHelp handles your transaction management, you can focus on what you do best – running your business and driving your success. ChargebackHelp has assisted numerous businesses with a fully integrated chargeback management service; and we’ve been incredibly successful doing so.
Chargebacks are the most prominent algorithmic way to discern if your product transactions and customer support are adequately satisfying your customers. If your business model is yielding high chargebacks, this gives issuing banks the impression that your customers are not satisfied with your business product and/or customer support. This could lead to the potential termination of your merchant accounts, which cripples your ability to accept credit card payments and can lead to severe losses to your business. Managing chargebacks with ChargebackHelp is vital to the longevity of your business – our 30+ years of combined industry experience will work to your benefit.
We make getting in touch easy and pride ourselves on a fast response turnaround time. You are welcome to email support@chargebackhelp.com and one of our friendly, knowledgeable support staff members will get back with you within 24 hours.
Our API can either push data from or to you. It routes alerts to you while enabling you to respond to those alerts. What data you “push” or “pull” is customized to your processing needs. This is what we mean by “custom programming.” Our programmers can write this free of charge based upon volume and scope of work.
Yes. We’re happy to work with a wide variety of issuers, foreign and domestic. And to better serve our clients dealing with overseas banks, we have added a European office to cover concerns in both Europe and Asia.
Getting started with ChargebackHelp is an easy process. We would like to get to know you a little better, so to start the process, we ask that you please fill out our Chargeback Analysis form. It’s quick, simple, and of course, free. We want your business, so don’t expect to wait more than a day for our response. Our pricing is determined by your current chargeback ratio and volume.
As a matter of fact we do! BILLAPAY is our very own proprietary gateway, designed specifically to manage processing for high-risk clients. It is a PCI-compliant, 3D Secure gateway solution that integrates seamlessly with the many services we already provide our clients.
2. Chargeback FAQs
For Visa domestic, it’s under 1% of transactions, however, a merchant cannot exceed 100 chargebacks in a 30 day period, no matter what. MasterCard is 1.5% of transactions and similarly, a merchant cannot exceed 100 chargebacks in a 30 day period.
Chargeback fees typically range from $20 to $100 per dispute, depending on the acquiring bank and card network. These fees cover the cost of processing the chargeback and are charged regardless of the outcome. High chargeback volumes can lead to additional penalties and increased fees.
Lowering chargeback fees requires reducing the number of disputes by implementing fraud prevention measures, improving customer service, and providing clear billing descriptors. Chargeback alerts and proactive dispute resolution can also help minimize fees by preventing disputes from escalating.
Preventing fraudulent chargebacks involves using fraud detection tools, implementing 3-D Secure authentication, and monitoring transaction patterns. Clear billing descriptors, detailed transaction records, and proactive customer communication can also help reduce disputes.
A bank-initiated chargeback occurs when the issuing bank disputes a transaction on behalf of the cardholder. This can happen due to suspected fraud, processing errors, or customer disputes. Merchants must respond with compelling evidence to reverse the chargeback.
Preventing bank-initiated chargebacks requires ensuring accurate transaction processing, providing clear billing descriptors, and maintaining detailed records. Merchants should also use fraud prevention tools and respond promptly to customer inquiries to avoid disputes.
Responding to chargebacks involves gathering compelling evidence, such as order confirmations, shipping records, and customer communications, and submitting a representment case to the card network. Timely and accurate responses increase the chances of winning the dispute.
BNPL (Buy Now Pay Later) chargebacks occur when a cardholder disputes a transaction made through a BNPL service. These chargebacks can be challenging to manage due to the deferred payment structure. Merchants should implement strong fraud prevention measures and maintain detailed records to reduce BNPL chargebacks.
Yes, buy now pay later (BNPL) chargebacks can occur when cardholders dispute transactions made through BNPL services. These disputes often involve claims of fraud, unauthorized transactions, or dissatisfaction with the product or service.
Preventing BNPL fraud requires implementing strong identity verification, monitoring for unusual purchase patterns, and using fraud detection tools. Merchants should also maintain detailed transaction records and communicate clearly with customers to reduce disputes.
Chargeback insurance is a service offered by some payment processors and third-party providers that protects merchants from the financial impact of chargebacks. It typically covers the cost of disputed transactions and associated fees, providing an additional layer of security for high-risk merchants.
What is VISA’s chargeback process?
MasterCard’s chargeback process includes the initial dispute, representment, and arbitration stages. Merchants must provide evidence to support their case within the required timeframes. MasterCard’s Dispute Resolution Initiative (DRI) simplifies the process by categorizing disputes and providing clear guidelines for resolution.
American Express’s chargeback process involves the initial dispute, representment, and arbitration stages. Merchants must respond with compelling evidence within specified timeframes. AMEX provides detailed guidelines and support to help merchants navigate the chargeback process effectively.
A good chargeback rate is typically below 1% of total transactions. High chargeback rates can lead to penalties, increased fees, and account termination. Merchants should aim to maintain a low chargeback ratio by implementing fraud prevention measures and resolving disputes proactively.
A bank-initiated chargeback occurs when the issuing bank disputes a transaction on behalf of the cardholder. This can happen due to suspected fraud, processing errors, or customer disputes. Merchants must respond with compelling evidence to reverse the chargeback.
A healthy chargeback ratio is generally considered to be below 1% of total transactions. Card networks and acquirers monitor chargeback ratios closely, and exceeding the threshold can result in fines, higher processing fees, or account termination.
Payment reversals and chargebacks are not the same. A payment reversal occurs when a transaction is canceled or refunded by the merchant, while a chargeback is initiated by the cardholder through their issuing bank. Chargebacks involve additional fees and potential penalties.
Yes, refunds are generally better than chargebacks because they are less costly and do not incur additional fees or penalties. Refunds also help maintain positive customer relationships, whereas chargebacks can damage a merchant’s reputation and lead to account termination.
Yes, it is possible to convert chargebacks into returns by resolving the dispute directly with the customer before it escalates. This can involve issuing a refund, offering a replacement, or providing additional information to address the customer’s concerns.
Partial chargebacks are less harmful than full chargebacks because they involve a smaller financial impact. However, they still count toward the merchant’s chargeback ratio and can lead to penalties if the ratio exceeds acceptable thresholds.
Chargeback reports can be obtained through your acquiring bank, payment processor, or chargeback management software. These reports provide detailed information about chargeback volumes, reason codes, dispute outcomes, and trends, helping merchants identify and address issues.
3. Chargeback Management FAQs
The best software for managing chargebacks typically includes features like automated dispute handling, real-time alerts, and comprehensive reporting. Popular platforms like ChargebackHelp and DisputeHelp assist merchants in streamlining the chargeback process, reduce manual effort, and improve win rates by providing tools for evidence submission, analytics, and fraud prevention.
The best tools for preventing chargebacks include fraud detection software, address verification systems (AVS), 3-D Secure authentication, and chargeback alert services. Additionally, clear billing descriptors, detailed transaction records, and proactive customer communication can help reduce disputes. Tools like ChargebackHelp and DisputeHelp are widely used for fraud prevention.
Yes, there are specialized services designed to help merchants fight chargebacks. These services, such as ChargebackHelp and DisputeHelp, offer solutions like chargeback alerts, dispute management, and representment services. They assist merchants in gathering compelling evidence, submitting rebuttals, and improving overall chargeback win rates.
A chargeback analyst is a professional responsible for investigating and managing chargeback disputes. Their role includes analyzing transaction data, identifying the root causes of chargebacks, gathering evidence, and submitting representment cases to card networks. They also work on strategies to reduce chargeback rates and improve merchant profitability.
Chargeback managers oversee the entire chargeback process within an organization. They develop and implement strategies to prevent and manage chargebacks, train staff on best practices, and work with chargeback analysts to ensure timely and effective dispute resolution. They also monitor chargeback ratios and collaborate with acquiring banks and card networks to optimize outcomes.
Chargeback reason codes are standardized codes provided by card networks to indicate the reason for a chargeback. These codes help merchants understand why a dispute was initiated, such as fraud, product not received, or service not rendered. Each card network (Visa, Mastercard, etc.) has its own set of reason codes, which guide merchants in responding to disputes.
Dispute administration fees vary by acquiring bank and card network but are typically upwards of $50 per chargeback. These fees cover the cost of processing the dispute and are charged regardless of the outcome. High chargeback volumes can lead to additional penalties and increased fees, making it crucial for merchants to manage disputes effectively.
Reason codes are alphanumeric codes used by card networks to categorize the cause of a chargeback. They provide detailed information about the dispute, such as whether it was due to fraud, authorization issues, or customer dissatisfaction. Understanding reason codes is essential for merchants to address the underlying issues and prevent future chargebacks.
Chargeback codes are specific codes assigned by card networks to classify the nature of a chargeback. They are used to identify the reason for the dispute, such as unauthorized transactions, processing errors, or customer disputes. These codes help merchants and acquirers navigate the chargeback process and determine the appropriate response.
Chargeback reports can be obtained through your acquiring bank, payment processor, or chargeback management software. These reports provide detailed information about chargeback volumes, reason codes, dispute outcomes, and trends. Regularly reviewing chargeback reports helps merchants identify patterns, implement preventive measures, and improve dispute resolution strategies.
4. Chargeback Alert FAQs
Chargeback alerts are notifications sent to merchants when a cardholder initiates a dispute. These alerts provide an opportunity for merchants to resolve the issue before it escalates to a chargeback, often by issuing a refund or providing additional information to the cardholder.
Chargeback alerts work by notifying merchants of potential disputes in real-time, allowing them to take immediate action. Merchants can use these alerts to contact the customer, resolve the issue, and prevent the dispute from becoming a chargeback. Services like ChargebackHelp and DisputeHelp offer both Ethoca and Verifi chargeback alert solutions.
Yes, chargeback alerts are effective in reducing chargeback rates by enabling merchants to address disputes before they are formally filed. They provide an opportunity to resolve issues directly with the customer, often avoiding the need for a chargeback and associated fees.
Ethoca alerts are real-time notifications provided by Ethoca, a fraud prevention service, that inform merchants of potential chargebacks. These alerts allow merchants to take proactive steps, such as issuing refunds or providing additional information, to prevent disputes from escalating.
Rapid Dispute Resolution (RDR) is a service that automates the chargeback process by enabling merchants and issuers to resolve disputes quickly and efficiently. It reduces the time and cost associated with traditional chargeback handling by facilitating direct communication and evidence exchange.
RDR helps manage chargebacks by providing faster and more efficient way to resolve disputes through advanced automation systems. It allows merchants and issuers to collaborate directly, reducing the need for lengthy representment processes. This results in lower chargeback ratios and improved customer satisfaction.
TC40 Data refers to information provided by Visa to acquirers about potentially fraudulent transactions. It includes details such as the cardholder’s name, account number, and transaction amount. Merchants can use TC40 Data to identify and prevent fraudulent activity, reducing chargebacks and fraud losses.
5. Payment Fraud FAQs
Friendly fraud occurs when a cardholder disputes a legitimate transaction, often claiming they did not recognize the charge, did not receive the product, or were dissatisfied with the service. Unlike traditional fraud, friendly fraud involves legitimate cardholders, making it challenging to detect and prevent.
First-party fraud occurs when a cardholder intentionally disputes a legitimate transaction to avoid payment. This type of fraud is often categorized as friendly fraud but involves deliberate deception. It can be difficult to distinguish from legitimate disputes, requiring detailed transaction records and customer communication to address.
Third-party fraud involves unauthorized use of a cardholder’s payment information by a third party. This can include stolen card data, account takeovers, or phishing scams. Merchants can mitigate third-party fraud through security measures like 3-D Secure, AVS, and fraud detection tools.
Family fraud occurs when a family member uses another person’s payment information without authorization. This type of fraud is often difficult to detect, as the cardholder may initially recognize the transaction but later dispute it. Clear billing descriptors and customer communication can help reduce family fraud.
Loyalty fraud involves the unauthorized use of loyalty points or rewards for personal gain. This can include hacking into accounts, redeeming points fraudulently, or exploiting loopholes in loyalty programs. Merchants can prevent loyalty fraud by implementing strong security measures and monitoring account activity.
Reward point fraud occurs when fraudsters exploit loyalty programs to redeem points or rewards illegitimately. This can involve account takeovers, phishing, or exploiting system vulnerabilities. Merchants should implement multi-factor authentication and monitor for unusual redemption patterns to prevent reward point fraud.
Preventing loyalty fraud chargebacks requires robust security measures, such as multi-factor authentication, account activity monitoring, and clear communication with customers. Merchants should also ensure that loyalty program terms are transparent and that customers are promptly notified of any account changes or redemptions.
MOTO fraud occurs in mail-order or telephone-order transactions where fraudsters use stolen card information to make purchases. These transactions are considered higher risk due to the lack of card-present verification. Merchants can mitigate MOTO fraud by using AVS, requiring additional verification, and monitoring for suspicious activity.
BNPL fraud involves the misuse of Buy Now Pay Later services to obtain goods or services without intending to repay. Fraudsters may use stolen identities or exploit weak verification processes. Merchants can reduce BNPL fraud by implementing strong identity verification and monitoring for unusual purchase patterns.
APP fraud occurs when a fraudster convinces a victim to authorize a payment to a fraudulent account. This often involves social engineering tactics, such as impersonating a legitimate business or individual. Merchants can help prevent APP fraud by educating customers and implementing transaction verification processes.
The fastest ways to protect merchant accounts from chargeback fraud include implementing real-time fraud detection tools, using 3-D Secure authentication, and providing clear billing descriptors. Chargeback alerts and proactive customer communication can also help resolve disputes before they escalate to chargebacks.
Yes, velocity checks can help reduce online fraud and chargebacks by identifying unusual transaction patterns, such as multiple purchases in a short time frame or high-value transactions from new customers. These checks enable merchants to flag and review suspicious activity before processing payments.
The inquiry phase is the initial stage of a chargeback process, where the cardholder contacts their issuing bank to dispute a transaction. During this phase, the issuer may request additional information from the merchant to determine whether the dispute is valid. Merchants should respond promptly and provide detailed evidence to avoid escalation.
Deflection refers to strategies used to prevent chargebacks by resolving disputes before they are formally filed. This can include providing refunds, offering replacements, or clarifying billing descriptors. Effective deflection reduces chargeback ratios and improves customer satisfaction.
A first-party trust program is designed to address first-party fraud by improving communication and trust between merchants and cardholders. It provides tools and resources to help merchants identify and prevent first-party fraud, such as detailed transaction records and customer education.
Consumer Clarity is a Mastercard service that provides detailed transaction information to cardholders, helping them recognize legitimate charges and reduce disputes. It enhances transparency by displaying merchant details, purchase information, and contact details on the cardholder’s statement or online banking portal.
Order Insight is a Visa service that provides issuers with detailed transaction information to help cardholders recognize legitimate charges. It reduces chargebacks by enabling issuers to resolve disputes directly with cardholders, often without involving the merchant.
Verifi’s Order Insight tool allows merchants to share detailed transaction information with issuers, helping cardholders recognize legitimate charges. Merchants can integrate the tool into their payment process to provide data such as purchase details, shipping information, and customer service contacts, reducing the likelihood of chargebacks.
Compelling evidence is documentation that proves the legitimacy of a transaction and supports a merchant’s case during a chargeback dispute. This can include order confirmations, shipping records, customer communications, and proof of delivery. Strong evidence increases the chances of winning a chargeback representment.
6. Representment FAQs
Reversing chargebacks involves submitting a representment case with compelling evidence to prove the legitimacy of the transaction. This can include order confirmations, shipping records, and customer communications. Timely and accurate responses increase the chances of winning the dispute.
Representment is the process of disputing a chargeback by providing evidence to prove that the transaction was legitimate. Merchants must submit a representment case to the card network within specified timeframes, including documentation such as order confirmations, shipping records, and customer communications.
Representment works by allowing merchants to challenge a chargeback by providing evidence that the transaction was valid. This evidence is submitted to the card network, which reviews the case and makes a decision. Successful representment results in the chargeback being reversed and the funds returned to the merchant.
Auto representment can be set up through chargeback management software or services that automatically submit representment cases on behalf of the merchant. These systems use predefined rules and templates to gather and submit evidence, streamlining the process and improving efficiency.
The chargeback arbitration process occurs when a chargeback dispute cannot be resolved through representment. It involves a formal review by the card network, which makes a final decision based on the evidence provided by both the merchant and the issuer. Arbitration decisions are binding and may involve additional fees.
A good chargeback win rate is typically between 60% and 80%. Achieving a high win rate requires submitting compelling evidence, responding promptly to disputes, and implementing effective fraud prevention measures.
A chargeback rebuttal letter is a document submitted by the merchant to the card network as part of the representment process. It outlines the merchant’s case, provides evidence to support the legitimacy of the transaction, and explains why the chargeback should be reversed.
Compelling evidence for chargebacks includes documentation that proves the transaction was legitimate, such as order confirmations, shipping records, customer communications, and proof of delivery. Strong evidence increases the chances of winning a chargeback dispute.
Improving the merchant chargeback Net Win Rate involves submitting compelling evidence, responding promptly to disputes, and implementing effective fraud prevention measures. Merchants should also analyze chargeback trends, address root causes, and use chargeback management tools to optimize their representment strategy.
7. Payments Industry FAQs
The Payment Card Industry Data Security Standard (PCI-DSS) is a set of security standards designed to ensure that all companies that accept, process, store, or transmit credit card information maintain a secure environment. It includes requirements for security management, policies, procedures, network architecture, software design, and other critical protective measures. Compliance with PCI-DSS is mandatory for all entities involved in payment card processing to reduce fraud and data breaches.
Transaction Risk Analysis (TRA) is a process used to assess the risk level of individual transactions, particularly in card-not-present (CNP) environments. It involves analyzing various factors such as transaction amount, customer behavior, geographic location, and device information to identify potentially fraudulent activities. TRA helps merchants make informed decisions about whether to approve, decline, or flag transactions for further review.
The Member Alert to Control High-Risk Merchants (MATCH) list, formerly known as the Terminated Merchant File (TMF), is a database maintained by Mastercard that contains information about merchants who have been terminated by their acquirer due to high-risk activities, such as excessive chargebacks, fraud, or violations of card network rules. Acquirers use this list to assess the risk of onboarding new merchants.
Merchant advice codes are standardized codes provided by card networks to inform merchants about the status of a transaction. These codes indicate whether a transaction was approved, declined, or requires further action. They also provide additional details, such as the reason for a decline, which can help merchants understand and address issues like insufficient funds, expired cards, or suspected fraud.
An Independent Sales Organization (ISO) is a third-party entity registered with Visa that resells merchant services on behalf of an acquiring bank. ISOs are responsible for merchant account sales, customer support, and risk management but do not directly process transactions. For Mastercard, the equivalent term is Member Service Provider (MSP).
A Member Service Provider (MSP) is a third-party entity registered with Mastercard that resells merchant services on behalf of an acquiring bank. MSPs are responsible for merchant account sales, customer support, and risk management but do not directly process transactions. For Visa, the equivalent term is an Independent Sales Organization (ISO).
A Merchant Service Provider (MSP) is a company that offers businesses the tools and infrastructure to accept and process electronic payments. MSPs provide services such as credit card processing, payment gateways, point-of-sale (POS) systems, fraud prevention, and compliance support. They work with acquiring banks, card networks, and payment processors to facilitate transactions for merchants.
The term MSP can refer to two different types of entities in the payment processing industry:
- Member Service Provider (MSP) – A Mastercard-registered Independent Sales Organization (ISO) that resells merchant accounts on behalf of an acquiring bank.
- Merchant Service Provider (MSP) – A broad industry term for any company that provides businesses with payment processing solutions, such as credit card processing, payment gateways, and POS systems.
While these two terms share the same acronym, they serve different functions in the payments ecosystem.
A Payment Service Provider (PSP) is a company that enables businesses to accept electronic payments without requiring a traditional merchant account. PSPs act as intermediaries between merchants and payment networks, aggregating multiple businesses under a single account while handling payment processing, compliance, and fraud prevention.
A Payment Facilitator (PayFac) is a company that acts as a master merchant, allowing businesses to sign up as sub-merchants under its account. This eliminates the need for individual businesses to apply for separate merchant accounts, streamlining the onboarding process. PayFacs handle payment processing, risk management, and compliance for their sub-merchants.
Both PSPs (Payment Service Providers) and PayFacs (Payment Facilitators) enable businesses to accept payments without requiring a traditional merchant account, but they differ in structure:
- PSPs provide a broad, all-in-one payment processing solution where multiple businesses are aggregated under a single PSP-managed account.
- PayFacs take it a step further by allowing businesses to become sub-merchants under the PayFac’s master account, giving them more control over their payments while reducing onboarding friction.
Essentially, a PayFac is a more specialized version of a PSP, focusing on faster onboarding and more direct control over sub-merchant transactions. Many well-known PSPs (like Stripe and Square) also function as PayFacs.
8. Transaction FAQs
Presentment refers to the process of submitting a transaction to the card network and the issuing bank for authorization and settlement. It involves sending transaction details, such as the amount, merchant information, and cardholder data, to ensure the payment is processed correctly. Payment presentment is a critical step in the payment lifecycle, enabling funds to be transferred from the cardholder’s account to the merchant’s account.
A second presentment occurs when a merchant resubmits a transaction for payment after it was initially declined or disputed. This typically happens during the chargeback representment process, where the merchant provides additional evidence to prove the validity of the transaction. If successful, the funds are recovered, and the chargeback is reversed.
An acquirer, also known as an acquiring bank, is a financial institution that processes credit and debit card transactions on behalf of merchants. The acquirer facilitates the transfer of funds from the cardholder’s issuing bank to the merchant’s account and ensures compliance with card network rules. They also provide merchants with the necessary tools and support to manage payments and disputes.
A billing descriptor is the text that appears on a cardholder’s bank statement to identify a transaction. It typically includes the merchant’s name, contact information, and a brief description of the purchase. A clear and accurate billing descriptor helps cardholders recognize transactions and reduces the likelihood of chargebacks due to unrecognized charges.
A billing descriptor is crucial for reducing chargebacks and improving customer satisfaction. It ensures that cardholders can easily identify transactions on their statements, minimizing confusion and disputes. A well-crafted descriptor also enhances brand recognition and trust, as customers are more likely to recognize and approve charges from familiar merchants.
If a billing descriptor doesn’t match the business name, it can lead to confusion and chargebacks. Merchants should contact their payment processor or acquiring bank to update the descriptor to accurately reflect their business name. Additionally, merchants should communicate with customers to ensure they recognize the descriptor and understand the charges.
A card-not-present (CNP) transaction occurs when the cardholder is not physically present at the point of sale, such as in online, phone, or mail-order purchases. These transactions are considered higher risk due to the lack of physical card verification, making them more susceptible to fraud. Merchants often use additional security measures, such as AVS and 3-D Secure, to mitigate risks.
3-D Secure is a security protocol designed to reduce fraud in card-not-present transactions. It adds an extra layer of authentication by prompting the cardholder to enter a one-time password or biometric verification during checkout. This process involves three domains: the acquirer, issuer, and interoperability domain, hence the name “3-D Secure.”
Protect Buy is Mastercard’s implementation of the 3-D Secure protocol. It enhances security for online transactions by requiring cardholders to authenticate themselves through a password, biometric scan, or other verification methods. Protect Buy shifts liability for fraudulent transactions from the merchant to the issuer, provided the authentication process is successfully completed.
The ECI (Electronic Commerce Indicator) is a code that indicates the level of security used in a transaction, particularly in 3-D Secure authentication. It provides information about whether the transaction was authenticated and helps determine liability in case of fraud. Common ECI values include “5” for fully authenticated transactions and “6” for non-authenticated transactions.
Level 1 credit card data refers to basic transaction information required for processing payments, such as the cardholder’s name, account number, expiration date, and transaction amount. This data is essential for authorization and settlement but does not include additional details like shipping information or purchase descriptions.
Level 2 credit card data includes additional information beyond Level 1, such as tax amounts, customer codes, and merchant postal codes. This data is typically used in business-to-business (B2B) and government transactions to provide more detailed records for accounting and reporting purposes. It can also help qualify for lower interchange rates.
Level 3 credit card data provides the most detailed transaction information, including line-item details such as product descriptions, quantities, unit prices, and shipping information. This level of data is primarily used in B2B and government transactions to qualify for the lowest interchange rates and improve expense tracking.
BIN (Bank Identification Number) and CAID (Card Acceptor Identification) numbers are unique identifiers used in payment processing. The BIN is the first six digits of a card number and identifies the issuing bank, while the CAID is a merchant-specific code used to identify the point of sale. These numbers help route transactions and ensure accurate processing.
A VAR (Value-Added Reseller) sheet is a document provided by payment processors or acquirers that outlines the specific rates, fees, and terms associated with a merchant’s payment processing agreement. It includes details such as interchange rates, assessment fees, and any additional charges, helping merchants understand their cost structure.
For Visa domestic, it’s under 1% of transactions, however, a merchant cannot exceed 100 chargebacks in a 30 day period, no matter what. MasterCard is 1.5% of transactions and similarly, a merchant cannot exceed 100 chargebacks in a 30 day period.
Managing chargebacks for high-risk businesses requires a proactive approach, including robust fraud prevention tools, clear billing descriptors, and detailed transaction records. High-risk merchants should also use chargeback alerts, implement 3-D Secure, and maintain open communication with customers to address disputes before they escalate. Partnering with a specialized chargeback management service can also help reduce chargeback rates.
High-risk businesses are those that operate in industries with higher chargeback rates, fraud potential, or regulatory scrutiny. Examples include online gambling, adult entertainment, travel, subscription services, and CBD products. These businesses often face higher processing fees and stricter underwriting requirements due to the increased risk.
High-risk merchant accounts are subject to stricter chargeback rules, including lower chargeback thresholds and higher fees. Merchants may be required to maintain a chargeback ratio below 1% and implement additional fraud prevention measures. Failure to comply can result in account termination, fines, or placement on the MATCH list.
NFC (Near Field Communication) payments are generally considered secure due to tokenization and encryption technologies. However, they are not immune to fraud, particularly if a device is lost or stolen. Chargebacks for NFC payments are typically lower than for card-not-present transactions, but merchants should still implement security measures to mitigate risks.
9. Visa FAQs
Visa’s Acquirer Monitoring Program (VAMP) is designed to ensure that acquirers comply with Visa’s rules and standards for managing merchant risk. The program monitors acquirers’ performance in areas such as chargeback ratios, fraud rates, and compliance with Visa’s operating regulations. Non-compliance can result in fines or other penalties. Please refer to this comprehensive review of all current updates and requirements to VAMP.
Visa Claims Resolution (VCR) is a streamlined dispute resolution process that simplifies and accelerates chargeback handling. It categorizes disputes into four workflows—Allocation, Collaboration, Fraud, and Compliance—based on the reason code. VCR reduces the time and complexity of resolving disputes, improving efficiency for both merchants and issuers.
Visa’s BIN Attribute Sharing Service (VBASS) provides merchants with detailed information about the attributes of a card’s BIN, such as the card type, issuer, and country of origin. This data helps merchants optimize transaction routing, reduce fraud, and improve authorization rates by tailoring their payment processes to specific card characteristics.
Visa’s Fraud Monitoring Program (VFMP) helps merchants and acquirers identify and mitigate fraudulent activity. It provides tools for monitoring transaction patterns, detecting anomalies, and implementing fraud prevention measures. Merchants can use VFMP data to adjust their fraud strategies and reduce chargebacks. (VFMP is scheduled to be replaced by VAMP on April 1, 2025).
Visa’s Dispute Monitoring Program (VDMP) tracks and analyzes chargeback activity to help merchants and acquirers manage disputes effectively. It provides insights into chargeback trends, reason codes, and dispute outcomes, enabling merchants to identify and address the root causes of chargebacks. (VDMP is scheduled to be replaced by VAMP on April 1, 2025).
The Visa Fraud Monitoring Program (VFMP) focuses on identifying and preventing fraudulent transactions, while the Visa Dispute Monitoring Program (VDMP) tracks and analyzes chargeback activity. VFMP helps reduce fraud-related chargebacks, whereas VDMP provides insights into overall dispute trends and helps merchants improve their chargeback management strategies. (Both VFMP and VDMP are scheduled to be replaced by VAMP on April 1, 2025).
Visa Resolve Online (VROL) is a web-based platform that enables merchants and issuers to collaborate on chargeback disputes. It allows for the electronic exchange of information and evidence, streamlining the dispute resolution process. Merchants can use VROL to submit representment cases, track dispute status, and improve chargeback win rates.
Visa’s Issuer Monitoring Program (IMP) is designed to ensure that issuers comply with Visa’s rules and standards for managing cardholder accounts and disputes. The program monitors issuers’ performance in areas such as chargeback handling, fraud prevention, and customer service, with non-compliance potentially resulting in penalties.
10. Mastercard FAQs
Mastercard’s Dispute Resolution Initiative (DRI) simplifies the chargeback process by categorizing disputes into specific workflows based on the reason code. It reduces the time and complexity of resolving disputes by providing clear guidelines for evidence submission and decision-making. DRI aims to improve efficiency and reduce costs for both merchants and issuers.
Mastercard’s Excessive Chargeback Merchant (ECM) Program identifies merchants with high chargeback ratios and requires them to implement corrective actions to reduce disputes. Merchants who fail to comply may face fines, higher processing fees, or termination of their merchant account. The program aims to protect cardholders and reduce fraud.
Mastercard’s Excessive Fraud Merchant (EFM) Program targets merchants with high levels of fraudulent activity. It requires these merchants to implement enhanced fraud prevention measures and reduce their fraud rates. Non-compliance can result in penalties, increased scrutiny, or account termination.
Mastercard’s First-Party Trust program is designed to address first-party fraud, where cardholders dispute legitimate transactions. It provides tools and resources to help merchants identify and prevent first-party fraud, such as detailed transaction records and customer communication strategies. The program aims to reduce chargebacks and improve trust between merchants and cardholders.
Mastercard SecureCode is a security feature that adds an extra layer of authentication for online transactions. Merchants can integrate SecureCode into their checkout process by prompting cardholders to enter a unique code or use biometric verification. This helps reduce fraud and shift liability for fraudulent transactions to the issuer.
Mastercard’s Merchant Identifier API allows merchants to obtain a unique identifier for their business, which can be used to track transactions and improve reporting. The API helps merchants streamline payment processing, enhance fraud detection, and comply with regulatory requirements by providing a consistent identifier across all transactions.
The Cure for Chargebacks
With ChargebackHelp, you get all of the world’s leading dispute deflection, chargeback alert, and representment tools in one place – from the industry’s leading experts.