MasterCard is mandating that all disputes on their network must be prefaced by pre-chargeback notifications (alerts). If the alert can not be routed to merchants through Mastercard subsidiary Ethoca, the acquirer will be notified through Mastercom. Previously, merchants would only receive dispute alerts from Mastercard transactions with descriptors they registered through Ethoca. Acquirers will now be mandated to buy and distribute these non-Ethoca alerts to their merchants. Mastercard designates this new mandatory workflow as “Acquirer Collaboration.”

What exactly is Mastercard doing?

Initial announcement of the Acquirer Collaboration went out February 2021 through Mastercard Connect. Launch was scheduled for July 17th. However, due to some challenges within Mastercom with the 8- digit BIN implementation, a delay has been announced until 11th of September 2022; and it looks like this deadline is going to hold, folks.

Under Acquirer Collaboration, every Mastercard dispute will generate an alert that will flow through one of two channels. For merchants with descriptors registered through Ethoca, disputes will flow the same as always — from the issuer, through Ethoca, directly to the merchant; this route is most efficient and cost effective for the merchant. For all other Mastercard disputes, with unregistered descriptors, alerts will flow from the issuer to Mastercom, then along Ethoca rails to the acquirer. From there, the acquirer must distribute the alerts to their merchants.

What this means for merchants

1. Increase in dispute costs:

Every Mastercard dispute will generate an alert. Alerts that can not go directly to merchants through Ethoca will now go through Mastercom, then to the acquirer. The total volume of alerts will increase, and the per-alert cost of the Mastercom route will be significantly higher as well.

2. Increased operational expenses:

Merchants must respond to alerts within 24-72 hours. This will divert resources and OpEx from the merchant’s core business in order to prevent chargebacks from escalating costs further.

3. More complexity = reduced efficiencies:

Mastercom alerts go through more hands than Ethoca alerts — from issuer, to Mastercom, to acquirer, then finally to the merchant. This route is more vulnerable to friction, errors, and other inefficiencies, versus routing through Ethoca from issuers directly to merchants.

4. More chargebacks reduce processing bandwidth:

Without the dispute management infrastructure to leverage alerts properly, merchants can not control chargeback/fraud ratios, creating significant friction and additional fees & penalties in their transaction processing.

How ChargebackHelp can help

ChargebackHelp can take the sting out of these changes for the merchant. Through our premier partnership with Mastercard and Ethoca, we’re able to offer Ethoca Alerts as part of our card-agnostic dispute management platform. We maintain integrations with Mastercom and Ethoca (as well as Visa’s RDR and Verifi’s CDRN®) to distribute dispute alerts on the acquirers’ behalf. We also filter disputes through deflection protocols and rules-based automation, providing merchants an optimized, value-driven interface with extensive reporting capabilities. All this without any need for inhouse development from the merchant.

1. Prevent disputes before they start with Deflect.

Our deflect module prevents disputes by sending deeper transaction data to cardholders and issuers at their point of inquiry. This prevents unrecognized transactions by cardholders with more precise details beneath your statement descriptors. It also prevents chargeback fraud by sending issuers the data that ties cardholders to their purchases. More deflections means far less disputes will end up in Collaboration.

2. Refund alerts to prevent chargebacks with Resolve.

Our resolve module connects merchants to all dispute alerts, regardless of the card used, so that they may resolve disputes before they become chargebacks. More relevant to Mastercard Collaboration, our account managers register all merchant descriptors with Ethoca to ensure alerts go through the most efficient, least-costly route to merchants.

3. Take revenue back from first-party fraud with Recover

The Recover module makes representment a breeze! It reverses unwarranted chargebacks by automating capture of transaction data, and delivering compelling evidence to issuers, optimized for maximum win ratios.

Conclusion

Mandates can be scary, and the Mastercard Acquirer Collaboration will inject significant friction into your transaction stream. That is, unless you partner with ChargebackHelp. Here’s how we take the sting out of dispute management and the mandates, like these, that come with the territory:

  • We lower your chargeback & fraud ratios. This keeps your processing costs lower and enables you to process higher volumes.
  • We combine the most effective dispute management solutions into a single platform, including Ethoca alerts, Verifi CDRN, Visa Rapid Dispute Resolution, Visa Order Insight®, Mastercard Consumer Clarity and more!
  • We enable merchants to focus more resources on their core business. Deflecting disputes, managing alerts, and automating resolutions with ChargebabackHelp saves significant time and money, whether you self-manage inhouse or have our specialists handle it for you.

Contact us today to start reaping these benefits! Send us an email, call us at 1.800.975.9905 or contact us here. Existing clients looking to prepare for the Mastercard Collaboration Mandate should contact their account representative.