Chargeback Changes With Mastercard Dispute Resolution Initiative

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Chargeback Changes With Mastercard Dispute Resolution Initiative

Chargeback’s usually occurs when a customer demands for a refunding due to dissatisfaction of a particular transaction or a failed transaction instruction during a payment process. Chargeback’s are designed to protect customers and ensure that their interests are served with regards to satisfaction. The most common reasons for charge backs are;


1. Payment authorization failed but however charges have been deducted from the customer’s account.
2. An automatic renewal of payment occurs even after a customer did not request
3. Chargeback disputes can be filed when the funds agreed to be paid by a merchant store owner are not paid.
4. If customers were charged twice for the same product they have the right to file a chargeback.
5. Fraud from fake cardholders receives responds on charges without the actual owners permission leading to fraud charges.
6. New order not fulfilled
7. Wrong product description misleads customer to make a wrong purchase The above causes of chargebacks may be based on honest reasons as well as reasons that the merchant store or the card providers are not supposed to be blamed for. It is for these reasons that master card (a major card provider) has developed a dispute resolution initiative to monitor chargebacks.


HOW DOES THIS INITIATIVE FUNCTION
A. THE USE OF THE NEWLY CREATED B2B (BUSINESS TO BUSINESS) PLATFORM.
This platform was created by master card in partnership with Microsoft word. It is designed in such a way as to simplify transactions between small businesses. The name of the platform is master card track. It works by connecting suppliers, buyers and lenders with other networks such as banks etc. Thus it functions as a platform that monitors high-risk transactions. High risk transaction issues deal with a lot of money that can easily be lost if care is not taken. Some of the charge backs paid by companies for example fraud charges are not in certain instances correct or in the best interest of the merchant store owner to pay. This is because the
failure of a particular transaction or a wrongful payment for a particular commodity may not be the fault of a merchant store owner but could be blamed on the carelessness of the customer. At these instances the customer will take responsibility for any fraud charges. As from 2019 the master card foundation will ensure that customers of businesses and organizations registered to their platform will be able to, maintain, exchange and retrieve important information about their High risk transaction, trading partners and about themselves. This shall be done using the companies track trade directories which functions as a secured repository. Before now several
suppliers had to use several platforms in other to reach different buyers. Connecting these networks to a single network track will facilitate easier communication for both suppliers and buyers. With this system, suppliers will enter company information once on this platform and have the ability to monitor their cash flow across several networks. Master Card Track will connect all types of payments especially, bank transfers, account based payments, card based payments, invoice, purchase order information payments within the platform link etc. The use of this platform will go a long way to monitor payment transactions therefore reducing the liability of unnecessary fraud charge back within high risk transactions.

B. IMPLEMENTATION OF CHARGE BACK CHANGES WITHIN THE
MASTERCARD DISPUTE RESOLUTION INITIATIVE
The main idea behind this initiative is to enhance the dispute handling process by detecting invalid disputes, reducing the time for dispute handling, and creation and uploading of particular dispute codes and their conditions .That said, with the use of this codes a standard of action can be agreed to be taken for all circumstances patterning to a particular reason. This dispute resolution initiative shall be implemented in specific phases.

PHASE ONE

Shall be implemented from the 12 OCTOBER 2018.Within time frame of phase one, there shall be no developmental changes as far as responds to the problems posed are consent.
In this phase people issuing chargeback complains will be required to ask more information from their card holders.

The charge back reasons shall apply the following codes,
1. 4853: Cardholder disputes for billing and recurring foods
2. 4831:Incorrect transaction amounts
3. 4834:Error at point of interaction
4. 4863: Card holders do not recognize the transaction information.
AIM: Master card aims to reduce invalid chargeback’s raised without any provision of adequate information.


PHASE TWO
Implemented from APRIL 12 2019 Aspects or activities subjected to change by master card.
1. Any refund initiated after a chargeback has been reversed by an issue who is filing a second chargeback will result in a double loss. The initiation of refunds after a chargeback has been reversed is not recommended. It is advisable to communicate clearly with your shopper after performing a refund after the first chargeback.
2. There shall be automated dispute defense for fully refunded transactions and the information will always be sent to card holders.
3. In other to ensure that disputes are resolved within a short period of time, the time frame to file a chargeback complain for issues patterning to code 4834 has been reduced from 120 days to 90 days. Also some reason will no longer be the main reason for filling in a chargeback complains. 4863-Non recognition of card holder 4840-Fraudelent transactions

PHASE THREE
Shall be implemented from OCTOBER 18 2019
There shall be additional changes not yet known.

PHASE FOUR
Shall be implemented on the 17 OF APRIL 2020
There shall be no second charge backs for the following reason;
1. 4853 - Cardholder Disputes
2. 4834 - Point of Interaction Error
3. 4837 - Fraud (excluding 4870 - Chip Liability Shift and 4871 - Chip/Pin liability shift chargeback)

HOW TO CORRECTLY RESOLVE CHARGBACK ISSUES AS AN ONLINE
MERCHANT STORE OWNER
1. The rightful use of dispute codes: Online merchants dealing with high risk transactions (monetary transactions) are supposed to know the dispute codes patterning to any chargeback event. Each need to have evidence that will serve as a prove when labeled with fraud charges. Without the knowledge of dispute codes, it is hard for merchants to win the argument. That said, merchants should be able to document and present the history of their transaction.

2. Having a document which shows clear refund policy by the company is very important. It is very important to be prepared and expect chargeback situations before they arrive. These statements should be made public on the merchant’s website in other to avoid cases of denial of preknowledge about nature of transaction. This mostly occurs in situations of fraud chargeback’s.
3. Immediate actions should be taken in an occurrence of an event of chargeback dispute
4. Never dismiss any suspicious behavior.
5. Check and keep evidences that can be used to justify any misunderstanding

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