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2 MAC is an organization comprised of members from Banks, Acquirers, ISOs, Card Associations, Law Enforcement and others involved in risk management and compliance of the electronic payment processing industry. The purpose of MAC is to educate members in the electronic payment industries regarding the compliance with electronic payments regulations along with the detection, prevention and prosecution of those involved in electronic payment fraud. In the contet of fulfilling MAC s ongoing educational obligations to its members, this webinar is being presented by the MAC Education Committee in support of the MAC mission regarding the echange of information and continuous education of its members. Webinar sponsored by:

3 Disclaimer Transmedia has endeavored to ensure that the information presented is accurate. In the event of a discrepancy or conflict between the information presented herein and a Association rule, policy, operating regulations or procedure, the association rules, policy, operating regulation or procedure shall eclusively govern. Transmedia disclaims any warranty of any kind relating to the use of or reliance on the information set forth herein this presentation.

4 Topic of Presentation

5 Chargeback Logic

6 Chargeback Logic (Cont.) Each Chargeback Category is subject to: Defined Time Frame Meet Certain Conditions Specific Documentation or Information

7 Chargeback Logic (Cont.) Chargeback s & Representment decisions are Member controlled, and are subject to be challenged Arbitration decisions is both final and not subject to any challenge, ecept for right of appeal

8 Relevant Chargeback Reason Codes 30 & 4855 Non- receipt of Goods or Services 4831 Transaction Amount Differs 4846 Incorrect Currency Code 53 & 4853 Goods, Service or Terms Not-As- Described 75 & 4863 Transaction-not Recognized 4859 Addendum, Noshow, or ATM Dispute 4854 Not-Elsewhere Classified 4837, 4840, 81, 83, Fraud Related Disputes 85 & 4860 Credit Not Processed

9 VISA CHANGES

10 Recent Significant Rule Amendments 1. Chargeback reason Code 75,81,83 no longer conditioned on Retrieval fulfillment status. ` 2. Chargebacks on electronically read transactions are invalid under RC 75,81 or Compliance right added for Issuers to address copy requests needs Favors Merchants Acquirers will see a reduction of Visa Retrieval Requests Favors Merchants Acquirers will see a reduction of Visa incoming CB s on CPT Favors Issuers Acquirers will eperience an increase of incoming Compliance cases New risk element Effective for Chargeback s Processed on or after April 20, 2013

11 Recent Significant Rule Amendments (Cont.) 4. Chargeback RC 30 & 75 requiring detail description 5. Updated / clarified acceptable types of Compelling Evidence 6. Re-certification on Pre-arb required to address compelling evidence RC 30 overall favors Merchants, RC 75 favors Issuers. Eliminates certain invalid CB & repre. Favors Merchants Affected RC 30, 53, 81, 83 Favors Merchants Effective for Chargeback s Processed on or after April 20, 2013

12 MASTER CARD CHANGES

13 Recent Significant Rule Amendments (Cont.) 1. MasterCard CVC 2 Validation program no longer requires U.S. registration 2. Arbitration case filing allows to include additional documentation to be considered 3. Sales Slip retention time frame reduced to 13 months Favors Merchants Affects CB RC 4837 For Transactions processed on or after effective date Merchant can use CVC2 in lieu of card imprint Favors both, Merchants & Issuers May affect all MC RC Effective date based on Arbitration case filing date Effective April 19, 2013 Favors Merchants Effective date based on Transaction date

14 Recent Significant Rule Amendments (Cont.) 4. Supporting documentation no longer required in First Chargebacks for certain RC s 5. Changes to MC return policy & recognition to E Agreement, Terms & Conditions 6. Reduced waiting period to 15 days when goods are returned or service canceled Favors Issuers Affected RC: 4831, 4840, 4846, 4853, 4854, 4859, Effective date based on Chargeback date Favors CH / Issuers Effective date based on Transaction date Affects RC 4841, 4853 & RC 4860 Favors CH / Issuers Effective date based on Transaction date Affects RC 4853 & RC 4860 Effective October 18, 2013

15 Recent Significant Rule Amendments (Cont.) 7. Global 14-day Cancelation Policy on Timeshare Merchants Favors CH / Issuers Supersedes any Merchant policy Affects RC 4860 & 4853 Effective date based on Transaction date Effective October 18, 2013

16 COMPELLING EVIDENCE Reason Codes 30, 53, 81, 83 30, 81, 83 30, 81, 83 Allowable Compelling Evidence Evidence, such as photographs or s, to prove a link between the person receiving the merchandise and the cardholder, or to prove that the cardholder disputing the transaction is in possession of the merchandise. For a card-not-present transaction in which the merchandise is picked up at the merchant location, any of the following: Cardholder signature on the pick-up form. Copy of identification presented by the cardholder. Details of identification presented by the cardholder For a card-not-present transaction in which the merchandise is delivered, documentation (evidence of delivery and time delivered) that the item was delivered to the same physical address for which the merchant received an AVS match of Y or M. A signature is not required as evidence of delivery. 30, 81, 83 For an ecommerce transaction which represents the sale of digital goods downloaded from a website, one or more of the following: Purchaser s IP address Purchaser s address Description of the goods downloaded Date and time goods were downloaded Proof that the merchant s website was accessed for services after the transaction date

17 COMPELLING EVIDENCE (Cont.) Reason Codes Allowable Compelling Evidence 30, 81, 83 30, 81, 83 30, 81, 83 For a transaction in which merchandise was delivered to a business address, evidence that the merchandise was delivered and that, at the time of delivery, the cardholder was an employee of the company at that address (e.g. confirmation that the cardholder was listed in the company directory or had an address with the company s domain name). A signature is not required as evidence of delivery. For a Mail/Phone Order transaction, a signed order form. For a passenger transport transaction, any of the following: Proof that the ticket was received at the cardholder s billing address. Evidence that the boarding pass was scanned at the gate. Details of frequent flyer miles claimed, including address and telephone number (that establish a link to the cardholder). Evidence of additional transactions related to the original transaction, such as purchase of seat upgrades, payment for etra baggage, or purchases made on board the aircraft. For a card-not-present transaction, evidence that the transaction uses data, such as IP address, 81, 83 address, physical address, and telephone number, that had been used in a previous, undisputed transaction. 81, 83 Evidence that the transaction was completed by a member of the cardholder s household.

18 Time-Frame based on Event-date

19 Arbitration & Compliance Process Visa issuers may be required to initiate a Pre-arb prior to direct filing. All compliance cases require a Pre-comp MC acquirers will never be required to, though, some issuers are very friendly to such process Pre-comp / Pre-arb accepted, ignored, or declined Member files for arbitration / Compliance Opposing Member has 14 days to review Association reviews and rules Losing Member is subject to additional fees End of process

20 How can you combat chargeback s? Determine whether case is technically valid and ensure it has met all requirements. Understand the merits of the dispute, negotiate with CH and/or Issuer to settle or reduce CB amount. Represent cases whenever you have grounds to do so. You gain little by continuing to deny reversal requests. Identify cases worth taking the risk to pursue Arbitration, a process being ignored for lack of knowledge Accept cases that have no remedy in arbitration. Properly train your chargeback staff to push back cases as long there is a 2 nd side to the story. Never auto-accept Pre-arbitration Pre-arbitration is a cycle a merchant deserves to be given an opportunity to review. Auto accepting will only increase your eposure and escalate merchant frustration.

21 ADVOCACY & COUNSELING Services: TRANSMEDIA is a full service firm for all chargeback representation & consulting needs Clients: TRANSMEDIA is typically retained by Acquirers & ISO s when dealing with single or group of uncollected chargebacks. Transmedia also services merchants facing ongoing chargeback losses or on a single event of a difficult chargeback in need of epert assistance RELATIONSHIP: TRANSMEDIA s program is a case-by-case relationship with minimal obligations on the part of our clients Process: Clients involvement is limited to barely providing access to the chargeback data and clearing chargeback processing channels

22 Q&A For any questions or assistance, Please contact: Bernard Klein Tel: Or visit our website