Effective globally April 14, 2018
Visa recently announced changes to dispute management called Visa Claims Resolution (VCR), with the goal of streamlining and simplifying the current Visa chargeback flow. This change will be implemented by Visa globally in April 2018. Rest assured, Braintree will give you the tools to help manage these changes for your business. As the merchant account holder you’ll continue to dispute chargebacks via Braintree.
The VCR was created with the following objectives:
- Improve chargeback-resolution time
- Reduce invalid chargebacks (allocation and collaboration)
- Compelling evidence changes
- Simplify reason codes
- Streamline financial-impact changes
Let’s look at each of these objectives a little more closely.
Improve chargeback-resolution time
Visa anticipates that changes to the required up-front information will help eliminate the back-and-forth between merchant, acquirer, and issuer, intending to result in a quicker chargeback resolution time for our merchants.
Fraud- and Authorization-related chargebacks would fall into the allocation bucket. Disputes that are managed under this category will be automatically processed by Visa, allowing them to reject disputes that don’t follow certain guidelines. These automated checks performed by Visa will look to answer the following questions:
- Was the dispute initiated within the allowed timeframe?
- Was the fraud dispute a 3D Secure authorized transaction?
- Has the transaction been refunded?
If a dispute meets any of these criteria it can be blocked by Visa, preventing it from becoming a chargeback.
Collaboration will involve the same process as it does today. It requires interaction between merchants, processors, and issuing banks but with VCR, it will help streamline the communication flow.
Compelling evidence changes
These changes will be limited to specific types of compelling evidence as outlined in the Visa Rules, which means merchants can expect more rigid requirements in order to properly dispute their cases. There will be more information available on these changes when Visa releases their new rules and regulations.
Simplify reason codes
In addition to timeframe and workflow changes, Visa is consolidating its chargeback reason codes. The current chargeback codes will now be consolidated under VCR into four categories:
These new categories were created to reduce the complexity of the current dispute process as well as to hold card-issuing banks to certain standards.
What can these changes potentially mean for merchants?
- Quicker turnaround time on disputes
- Fewer cases to juggle (refunded transactions should be auto-defended)
- Improved reason codes
How can merchants prepare?
- Standardize your documentation processes
- Review and implement fraud tools
- Continue working on chargeback mitigation
Looking for more information on reducing chargebacks and helping to prevent fraudulent transactions?
- Support Article: Reducing Chargebacks
- Blog Post: How to Reduce Chargebacks: A Six Point Guide
- Support Article: Braintree Fraud Tools Overview
As we get closer to the April global launch of VCR, Braintree will provide updates on any new information. In the meantime, if you have any questions please feel free to reach out to firstname.lastname@example.org.