New Visa Claims Resolution Process

Starting from 15 April 2018 Visa will be introducing changes to its Claims Resolution setup. Read on to learn what the changes are and what does it mean for you as a merchant.

WHAT IS THE VCR?

Visa Claims Resolution sets out rules for dispute processing. VCR was created to reduce time, cost, and the number of overall chargebacks merchants receive. It also means simplification of the dispute process.

WHAT ARE THE KEY CHANGES COMING WITH VCR?

1. New reason code groupings

The reason codes will be changed and grouped in four categories:

  • Fraud
  • Authorisation
  • Consumer Disputes
  • Processing Errors

2. Two new broad dispute categories

Allocation

All Fraud and Authorisation disputes will be categorised under the Allocation Workflow.

In this workflow, Visa will perform a series of automated checks to see if the dispute can become a chargeback:

  • If the fraud dispute is on 3D Secure authorized transactions
  • If the cardholder disputed the purchase after the allotted timeframe
  • If the disputed transaction has already been refunded

If any of the above is true, the dispute will be blocked, resulting in less invalid chargebacks for merchants to deal with.

However, once the chargeback has been created, defending against it will require compelling and definite evidence (stated in Visa rules and regulations) that the chargeback is invalid – the process is becoming stricter.

Responding to any Allocation Dispute can take place only by creating a Pre-Arbitration (currently Representment or Second Representment) according to definitions from Visa. Once a Pre-Arbitration is created, merchants will not receive a credit until the end of the process (for example, if the Issuer accepts the pre-Arbitration within 30 days). If Issuer does not accept the Pre-Arbitration, there are only 10 days to file for Arbitration and Visa would make the ruling.

Collaboration

All Consumer Disputes and Processing Errors will be categorised under the Collaboration workflow.

In this case the process practically remains the same as the current chargeback process and requires interaction between merchant, acquirer and issuer. The only difference being the Dispute Response instead of a Representment / Second Representment.

3. The dispute window remains open for 30 days although Visa will be levying a fee/penalty for each dispute responded to after the 20th day. However, from October 2018, the total time allowed to respond to a dispute will be restricted to 20 days only.

4. Visa chargeback reason code 75 ‘Transaction not Recognized’ is being retired.

If you are a Kalixa customer, please note that we’ve made all the necessary changes in our system to support VCR.

WHAT DO YOU NEED TO DO?

Please review the documentation provided by Visa on VCR and make any technical changes necessary to support the new process. You can also visit our manual for more details and the new reason codes here.

Feel free to contact us at Kalixa with any questions you may have with regards to the new process.

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