Visa Claims Resolution: The Mandatory Guidelines Explained

At North, we’re committed to providing our merchants and partners access to tomorrow’s payment technologies today. That’s why we are thrilled to support Visa as they usher in a new era of dispute resolution called Visa Claims Resolution (VCR).

This past April 13, Visa implemented a number of changes to their credit resolution guidelines. Effective 4/13/18:

• A merchant’s account will be debited when a dispute is received from a customer.
• Visa cardholder disputes will be split into two workflow categories: Allocation (including fraud and authorization related disputes) and Collaboration (including consumer goods/services and processing error disputes). Disputes following the Allocation workflow cannot be re-presented; merchants must initiate a pre-arbitration (pre-arb) case in order to contest the dispute.
• If the merchant submits a pre-arb rebuttal, their debited funds will be returned only after the final resolution is made and the ruling is made in favor of the merchant (not when a rebuttal is submitted).
• When disputing a case, merchants will now be required to provide “compelling” evidence as defined by Visa. (For more details, visit www.usa.visa.com
• If the issuer declines to send a pre-arb rebuttal, the processor’s chargeback team will decide to file for arbitration only if they consider it to be a strong case.
• The merchant will be liable for a fee of at least $550 if arbitration is filed and the final ruling is made in favor of the issuer.

Essentially, VCR is a streamlined dispute process that proactively eliminates invalid disputes and leverages existing data whenever possible to implement enhanced dispute rules and reduce timeframes. Tools include Midigator, a risk mitigation technology offering customized automation and real-time analytics, and Visa Merchant Purchase Inquiry, an easy-to-implement plug-in to Visa’s globally used dispute platform (VROL) that allows merchants to avoid disputes through an innovative, system-to-system interface providing issuers additional data elements at the beginning of the dispute process, which helps eliminate many disputes early.

It’s important to note that Visa has reorganized their reason codes in the following four dispute categories:

• Fraud (10)
• Authorization (11)
• Processing Error (12)
• Consumer Disputes (13)

These changes have been made in order to help streamline workflows and standardize rules of chargeback/dispute resolution. Issuers, acquirers, processors, merchants and consumers all stand to benefit from:

• A reduction in dispute volume (through system-enforced rules)
• Proactive dispute resolution
• Quicker troubleshooting and a mechanism to identify, track, and monitor abuse
• A better customer experience
• Dispute response (formerly representment) timeframes that have been shortened from 45 to 30 days

North will continue to keep you up-to-date on changing industry rules and regulations so that you can ensure your business remains as profitable as possible.