Source: Rivero Linkedin page
Visa’s Compelling Evidence 3.0 presents a positive development for merchants, but how does it impact issuers?
Over the weekend, Visa enacted its revised Compelling Evidence rules in order to provide a balance of risks shared by Issuers and merchants in the event of what Visa calls “First-party fraud”, also known as friendly fraud or chargeback fraud. By updating and standardising its dispute rules across all Visa issuers and all transactions processed via VisaNet, it is now easier for merchants to get a card-not-present transaction dispute dismissed by being able to provide more evidence to demonstrate that the cardholder was involved in the transaction.
Here is what issuers need to know about CE 3.0:
Merchants can remedy a fraud dispute by providing evidence to the issuer confirming the delivery of goods/services and establishing a history of undisputed transactions involving the cardholder’s payment credentials and device information (cumulative requirement).
In case of a dispute for a cancelled recurring transaction (non-European inter-regional transactions only) the issuer must provide evidence that the cardholder withdrew permission to charge the card, including the date of the withdrawal and details used to contact the merchant.
CE 3.0 does not take into account recurring instances of first party fraud. Therefore, Visa recommends that merchants and issuers examine their existing policies to remove repeat offenders from their customer base and make decisions tailored to their specific requirements.
Issuers can receive Order Insight data through VROL’s User Interface or through their APIs.
If the fraud dispute is considered invalid, the issuer has the option to reverse the provisional credit and reject the cardholder’s dispute (ie. holding the cardholder liable), or absorb the financial loss.
In the event of merchant misuse (submitting the same information across multiple disputes), issuers may raise an exception and overturn the original decision.
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