Visa Chargeback Rules Changing April 2018

Visa Chargeback Rules Changing April 2018

The payments space is ever evolving, so it should be no surprise that card brand rules change too. Despite the improvements in payment technology, chargebacks aren’t going anywhere. In an effort to streamline the chargeback dispute process, Visa is rolling out a new initiative — the Visa Claims Resolution (VCR) — to reduce time, costs and (hopefully) the number of chargebacks received.

The VCR was originally scheduled to roll out in October 2017, but was pushed back to April 2018. If you’re a business owner processing Visa cards, here’s what you should know:

  1. The time frame for businesses to respond to a chargeback dispute is decreasing from 45 days to 30 days.
  2. New automated workflows will reduce the time and resources allocated to dispute resolution.
  3. Chargeback reason codes will be simplified to four dispute categories.

Visa Claims Resolution: The Details

Time Limit Changes

Businesses will have 30 days to respond to a Visa chargeback, as opposed to the previous 45-day time frame. This is intended to reduce the back-and-forth between the many parties involved in a chargeback dispute. With VCR, Visa estimates disputes should be resolved within 31 days or fewer.

Dispute Workflows

Once VCR goes into effect, Visa will be following one of two new workflows for all disputes filed: fraud and authorization, or consumer and processing errors.

For fraud and authorization disputes, Visa will provide an automated decision based on Visa rules. Despite this automation, businesses will still have the ability to respond when certain conditions apply. For consumer and processing errors, card issuers will be required to fill out an enhanced dispute questionnaire to ensure all required information is captured before the dispute can be initiated.

These automated workflows will also stop invalid chargebacks before they reach the business. How? Visa will identify and block claims that do not meet dispute criteria by using Visa Resolve Online. For instance, if the time period to file a dispute has ended, Visa will not escalate it.

Reason Code Reorganization

Visa’s current chargeback reason codes will be consolidated and organized into four categories to reduce complexity. The new code names and categories are as follows:

10. Fraud 11. Authorization 12. Processing Errors 13. Consumer Disputes
10.1 EMV Liability Shift Counterfeit Fraud 11.1 Card Recovery Bulletin 12.1 Late Presentment 13.1 Merchandise/Services Not Received
10.2 EMV Liability Shift Non-Counterfeit Fraud 11.2 Declined Authorization 12.2 Incorrect Transaction Code 13.2 Cancelled Recurring
10.3 Other Fraud – Card Present Environment 11.3 No Authorization 12.3 Incorrect Currency 13.3 Not as Described or Defective Merchandise/Services
10.4 Other Fraud – Card Absent Environment 12.4 Incorrect Account Number 13.4 Counterfeit Merchandise
10.5 Visa Fraud Monitoring Program 12.5 Incorrect Amount 13.5 Misrepresentation
12.6 Duplicate Processing/Paid by Other Means 13.6 Credit Not Processed
12.7 Invalid Data 13.7 Cancelled Merchandise/Services
13.8 Original Credit Transaction Not Accepted
13.9 Non-Receipt of Cash or Load Transaction Value

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About Ursula Librizzi

Ursula is the sales and marketing operations manager for PayJunction. She oversees daily marketing tasks and liaisons between the sales and marketing departments.