How to turn Mastercard disputes into a revenue stream
What is Mastercard DAF (Dispute Administration Fee), and why is it important to automate DAF collection?
In August 2015, Mastercard introduced the DAF (Dispute Administration Fee) as a fee charged for every dispute stage to the receiver and paid to the sender. DAF is applied to all intra-European and domestic disputes in Europe.
The main intention of DAF is to encourage merchants to fight against fraud and invalid disputes, to incentivise issuers to increase recovery (also for amounts smaller than the dispute handling and processing costs) and to compensate the dispute handling efforts for the winning party of a dispute.
Issuers are eligible to receive the DAF if a dispute is won. Winning means the Acquirer does not respond with a representment (aka 2nd presentment), the Acquirer accepts a case filing, or Mastercard rules the case in favour of the Issuer.
How do we help Issuers fully leverage the DAF?
Unfortunately, receiving the DAF doesn’t happen automatically if the dispute is won in the case filing state (pre-arbitration and arbitration). As a result, for every dispute with accepted case filing or with a ruling in favour of the Issuer, the Issuer should first identify the eligible disputes and then collect the DAF by manually submitting a matching miscellaneous fee collection to the network.
Typically, collecting the DAF takes around 2 minutes per dispute. Depending on the volume and the process in place, this results in a high allocation of resources. For this reason, some Issuers even decide not to collect the case filing DAF and thereby miss out on being compensated for their efforts.
With Amiko (our SaaS Fraud and Dispute Management Solution), we enable Issuers to collect the DAF automatically without requiring manual intervention. Thanks to this automation and other efficiency-related measures, Issuers have a real opportunity to be “overcompensated” and to turn dispute handling into a stream of additional revenue from card payments!
Source: Rivero Linkedin page
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