Hitting Reset on Disputes

The shift from brick-and-mortar purchases to internet sales changed how consumers and merchants interact and left a growing gap in transaction clarity from when consumers make a purchase to when they review their credit card statements, Verifi COO and General Counsel Sara Craven writes in the PYMNTs eBook, “Endemic Economics: 32 Payments Execs on the ‘Next Normal’ That Never Happened.”

When Visa acquired Verifi in 2019, it recognized the benefit of enabling collaboration between merchants and issuers to resolve transaction disputes before a chargeback occurs. Over the course of the past three years, Visa and Verifi have partnered together on a mission to eliminate unnecessary disputes from the ecosystem and significantly reduce the dispute resolution timeframe through the launch of what is arguably the most innovative automated collaboration network yet.

The need for innovation arises from a decades long shift from brick-and-mortar purchases to internet sales, which changed the way consumers and merchants interact and left a growing gap in transaction clarity from when consumers make a purchase to when they review their credit card statements. Over the course of the pandemic, card-not-present transactions accelerated at record pace with an increase in spending up 34% from 2019 to 2021, according to VisaNet data. The trend results in an escalation of credit card disputes against merchants, who previously had limited resources to improve transaction clarity and resolve disputes quickly. However, with the introduction of Verifi’s Order InsightTM solution, Verifi and Visa now offer merchants the opportunity to provide enhanced transaction details that include full digital receipts via a global data-sharing network, to provide consumers transaction clarity at the first stage of inquiry — effectively reducing the overall dispute volumes in the ecosystem.

Payments are moving faster than ever before, and with that comes a greater expectation from both consumers and merchants to have disputes resolved quickly. Traditionally, once a consumer initiates a dispute with the card issuer, a lengthy process ensues where the issuer gives the merchant time to develop a response, then takes additional time to review the case and determine who is at fault. In all, the dispute process takes an average of 26 days to resolve. In some circumstances, this traditional method is necessary; but for a vast number of disputes, merchants would happily refund the transaction in question if only the consumer had first contacted them directly. In this instance, the tedious dispute process unnecessarily creates additional operational expenses while simultaneously resulting in poor customer experience. To provide further innovation for the dispute ecosystem, in 2021, Verifi and Visa launched the Rapid Dispute Resolution (RDR) solution which delivers a real time, one second, dispute response that reduces the resolution time from the average 26 days down to a near instant outcome. RDR utilizes a customizable auto decision engine to identify which issuer predisputes the merchant would like to refund in lieu of proceeding with the full dispute process. Once the pre-dispute is processed through RDR, the customer is granted an instant refund and the pre-dispute is intercepted before it becomes a dispute. The outcome delivers improved customer service and saves the merchant from incurring high dispute ratios and added operational expenses.

Visa’s 99% global issuer coverage has propelled Verifi’s solutions to perform as a best-in-class service on a global scale, helping merchants to collaborate and manage an ever-growing problem.