The chargeback of Visa Inc. is changing so as to condense the reason codes into four different categories and also amend the duration to resolve a disputed transaction and make necessary changes.
According to the information which was published on Chase Paymentech website, the changes will become effective from the 15th of April due to the fact that there is need to migrate the card brand from “litigation-based model to a liability-assignment model,” the site notes.
It has also been announced by the Paymentech site that there will be a creation of four dispute-reason categories by Visa and they include authorization, fraud, processing error as well as consumer dispute, and 25 new reason codes for chargeback will also be introduced. There will be 30 days for merchant to resolve most of the dispute. Previously, the duration was 45 days, according to a post by Yale University.
This change is seen to have a great chance to enhance the processing chargeback and also limit some of the fraud which is related to transactions, according to a statement by Keith Briscoe, the product officer and chief marketer at Ethoca Inc., which is a fraud-prevention service company that is based in Toronto. Ethoca recently launched a multipronged service which helps in the battle against fraud for online retailers.
It was reported by Briscoe that the changes won’t eliminate the need for services such as Ethoca’s but the chargeback will still exist. Merchants still need a solution as long as they exist. Paymentech has also said that it is crucial for merchants to see the decrease in the volume of chargeback due to the new Visa business rules, but it appears that the time that will take merchant to respond may be reduced.
For collaboration dispute which are related to consumer disputes as well as processing errors which are not fraud, the merchant must respond on the 24th day if they want the dispute to be challenged. But for dispute in the allocation category that are not related to authorization issues and fraud, the merchant have only 18 days to respond to it. However, merchant can decide not to challenge the chargeback in both cases.
The nature of compelling evidence is also an anticipated change, the proof of a merchant presents once it challenges a disputed transaction. Braintree which is a payment provider owned by PayPal Holdings Inc., says that merchant can expect a more rigid requirements so as to dispute their case properly and there will be availability of more information when the start date is near. Paymentech has also revealed that there are no changes in the criteria which are considered essential for compelling evidence.