Webcast Series. Strategies that help put chargebacks in their place. Visa Claims Resolution

Transcription

1 Webcast Series Strategies that help put chargebacks in their place Visa Claims Resolution

2 Disclaimer This presentation is provided as a courtesy and is to be used for general information purposes only. Bank of America Merchant Services is not responsible for inaccurate or incomplete information. The material contained herein is subject to change. Individual circumstances may vary and procedures may be amended or supplemented as appropriate. This is not intended to be a complete listing of all applicable procedures. No information contained herein alters any existing contractual obligations between Bank of America Merchant Services and its clients. 2

3 Visa Claims Resolution

4 Visa Claims Resolution (VCR) Visa Claims Resolution (VCR) is a global mandate initiated by Visa to redefine the dispute process. Visa s VCR model claims to seek a more simplified exception processing flow through liability assignment, which reduces timeframes, touch points and processes involved in resolving disputes by systematically routing disputes through one of two new processes: - Allocation: Fraud and Authorization Claims; Visa Resolve Online will determine the financial liability assignment in real time and settle the funds within 24 to 48 hours - Collaboration: Processing Errors and Cardholder Dispute Claims; Acquirers, issuers and merchants will interact to attempt and resolve the dispute prior to financial liability assignment High Level Impact System/Process Rewrite for Disputes, Settlement, Credit/Risk and Billing Introduce New Processing System and Manage Trailing for at least Six Months Manage Two Separate Visa Work Cycles; Allocation vs Collaboration Visa Drives Financial Adjustment Transactions versus the Issuer/Acquirer Consolidation of Reason Codes; Claim Categories with Sub Reason Codes Training; Operations and Merchant New and Increased ROL Fees Dispute Rule Changes New Dispute Cycles Timeframe Reduction Compelling Modifications and Data Requirements 4

5 Visa Claims Resolution (VCR) Client Impact Today Dispute Financial All chargebacks received through Interchange as a Financial Adjustment Transaction Day 1 Chargeback Representment credited Day 1 and funds passed to merchant Acquirers/Processors Cycle Timeframe 45 Day Cycle for First Chargebacks 30 Day Cycle for Arbitration/Compliance Merchant Timeframe Merchants are given 20 calendar days to respond to debits/request for information Tomorrow Dispute Financial; April 2018 Fraud/Authorization-Financial Adjustment Day 1 Chargeback Representment (PreArbitration Request); Financial adjustment to merchant only after issuer/cardholder acceptance or Visa ruling in favor of merchant (Merchant holds debit) Processing Errors/Cardholder Disputes-Financial Adjustment Day 1 Chargeback Representment; Credited Day 1 and funds passed to merchant PreArbitration; Non-Financial Financial adjustment to merchant only after acquirer processor/merchant acceptance or Visa ruling in favor of issuer (Issuer holds debit) Trailing Support of current process for 6 months Cycle Time Reduction 30 Day Cycle for all Dispute Work Types- April 2018 Current average cycle time including merchant response is 20 calendar days for first chargebacks Reducing cycle time decreases merchant response timeframes, dispute delivery options and back office processes have to accommodate same volume at reduced timeframes *FD made changes in Oct 2016 Merchant Timeframe Merchant response timeframe for disputes reduced and merchants moved to electronic delivery to meet the timeframe October 2016; Merchant Timeframe Reduced to 15 Calendar Days for Visa, MasterCard and Discover October 2016; Elimination of any Prenotification to the merchant prior to chargeback debit Late or No Fees 5

6 Visa Claims Resolution (VCR) Client Impact Today Chargeback Reason Codes Twenty two chargeback reason codes and descriptions to define reason for the dispute Dispute Cycles (Work Types) First Chargeback Issuer Initiated First Chargeback Representment - Acquirer Initiated PreArbitration Issuer Initiated and Requires Acquirer Arbitration Issuer Initiated, Acquirer Notified/ PreCompliance Issuer or Acquirer Initiate Compliance Issuer or Acquirer Initiate Collections - Issuer or Acquirer Initiate Merchant Dispute Delivery Options Electronic Fax Mail Compelling Information All documentation/scenarios are utilized to try and defend the case for the merchant and recoup funds Tomorrow Chargeback Reason Code Consolidation April 2018; Four Reason Codes with Dispute Condition Code Fraud, Authorization, Processing Errors and Cardholder Disputes Dispute Condition Code will define true reason for dispute April 2017; First Data to release electronic file specifications to allow merchants to code for the spec changes for April 2018 release Dispute Cycles (Work Types); April 2018 First Chargeback Issuer Initiated First Chargeback Representment - Acquirer Initiated PreArbitration Issuer or Acquirer Initiate Arbitration Issuer or Acquirer Initiate PreCompliance Issuer or Acquirer Initiate Compliance Issuer or Acquirer Initiate Collections Issuer or Acquirer Initiate Note: Additional Cycle for Acquirer based on Claim Reason Code Merchant Dispute Delivery Options Electronic Delivery of disputes is the best solution to accommodate for the reduced cycle time. First Data will still provide merchants with the option to receive their dispute correspondence through Mail and/or Fax. *Merchants that receive and/or send electronic files will be required to make coding changes *Merchants that continue to Fax/Mail responses or receive correspondence through Fax/Mail will be billed additional fees Compelling Information; April 2018 Limited to specific scenarios outlined in Visa rules, which impacts funds that we are currently able to recover for scenarios that Visa does not list Required to provide specific compelling scenario as data element on all representments for Fraud CNP and Merchandise/Services Not Received Dispute Products and Electronic Files to accommodate the specific compelling scenarios to meet Visa mandate (changes to Dispute Manger and response forms October 2017) Merchant required to select corresponding compelling scenario when responding to dispute Note: This will increase merchant financial risk for fraud chargebacks 6

7 Chargeback Timeline 20 Day Merchant Timeline for processing of 1 st Chargebacks & 1 st Chargeback Reversals System Load System Processing Investigator Review Merchant Investigator Review 15 Day Merchant Timeline for processing of 1st chargebacks & 1st chargeback reversals System Load System Processing 4/2018 Visa Mandate Cycle Time Reduction Investigator Review Merchant Investigator Review Note: VCR (Visa Claims Resolution) Effective April Indicates Potential Weekend System Load: Cases are received from issuing bank into Disputes Back office, validated for appropriate indicators and required documentation, and enriched with available authorization & transaction detail System Processing: Cases are being generated and directed to the issuing bank via the appropriate response system with all required documentation to support the reversal request. Investigator Review: Cases are reviewed for validity during the initial investigator review period; merchant response documentation is validated during the second investigator review period to ensure the merchant has provided a valid remedy to the dispute. 7

8 VCR: Allocation - Pre Arb Accepted CARDHOLDER ISSUER ACQUIRER MERCHANT Cardholder Initiates Chargeback Dispute Initiated Dispute Received +$ -$ +$ -$ +$ -$ Dispute Received Processor Merchant 60 Days Dispute Lost Pre Arb Acceptance Sent PreArb Initiated PreArb Received PreArb Initiated Sent Issuer Dispute Lost -$ +$ PreArb Acceptance -$ +$ PreArb Acceptance -$ PreArb Acceptance +$ Sent Received Received 8

9 VCR: Allocation Pre Arb Decline CARDHOLDER ISSUER ACQUIRER MERCHANT Cardholder Initiates Chargeback Dispute Won +$ Dispute Initiated +$ -$ Dispute Received +$ -$ Dispute Received Issuer PreArb Initiated Processor PreArb Received Pre Arb Initiated Dispute Merchant Pre Arb Decline Sent Pre Arb Decline Received Pre Arb Decline Received 70 Days (Max) Dispute Lost -$ Filed Arb Lost Filed Arb Received Filed Arb Initiated Filed Arb Won Processor Dispute Won Dispute Won Filed Arb Won Filed Arb Lost Dispute Lost Network Ruling +$ (TBD) Days 9

10 VCR: Collaboration CARDHOLDER ISSUER ACQUIRER MERCHANT Cardholder Initiates Chargeback +$ -$ Dispute Initiated +$ -$ Dispute Received +$ -$ Dispute Received Processor Merchant Dispute Lost -$ Received -$ +$ -$ Received +$ Sent Issuer PreArb Initiated PreArb Initiated PreArb Received PreArb Received Merchant PreArb Accepted -$ PreArb Received PreArb PreArb Issuer Filed Arb Initiated Filed Arb Initiated Filed Arb Received Network Ruling Dispute Lost -$ +$ Filed Arb Lost -$ Filed Arb Won Dispute Won 10

11 Tools for Managing Disputes

12 Business Track Consolidated, user-friendly web portal available 24/7 Key, at-a-glance information on all payment streams Easy, self-enrollment Quickly view 7 day summaries for net Sales and Expenses Stay on track with daily alerts of deposit or chargeback activities What is Business Track? Help protect your business from missed deadlines and unnecessary write-offs with online chargeback management tool 12

13 ClientLine.net ClientLine is a web-based reporting tool providing you access to your processing information. Provides instant access to an overview of recently processed disputes, for your entire business. This is known as The Disputes Dashboard. Provides a set of reports aimed at providing quick access to the information your business needs. What is ClientLine? Reports are available for delivery into Excel, PDF, Word Doc, Text Doc, and CSV files. This enables you to utilize various software programs, such as Microsoft Access or Microsoft Excel, to analyze the information. This opens a wide range of popular tools that have been developed to create charts, graphs, custom queries, reports, etc. Provides detailed transaction information for credit, debit/ebt, chargebacks, and adjustments. Access to simple queries for account summaries, bank deposits, rate analysis, activity summaries and more. 13

14 Dispute Manager What is Dispute Manager? Dispute Manager provides you with a internet-based chargeback and retrieval workflow management tool that enables better management of your cardholder dispute volume. Key Features Accessible via the internet from the Business portal 24/7 Manages disputes at the chain and corporate levels Six months of transaction and authorization detail Enter up to 1,000 characters of free form text directly into Dispute Manager, eliminating the need to upload text documents Electronic archive of all dispute documentation provided by both processor and merchant during case life cycle Respond to dispute requests electronically, expediting response times and simplifying back office tasks Systemic work prioritization and improved ability for managing risk Easy online help screens that provide you with information you need to effectively respond to chargebacks and retrievals 14

15 Dispute Electronic Communication What is Dispute Electronic Communication? Communication between Bank of America Merchant Services and you in regard to electronic dispute processing involves several types of files: Electronic file (DFM): File to notify you of your daily retrieval, chargeback and exception (arbitration, compliance, Collection) cases that require action. e file: File you use to respond to dispute cases through a bulk process ZIP file containing an index text file and corresponding image files file will be transmitted from you to Bank of America Merchant Services Merchant Services through MessageWay System (Dispute Manager) can receive and process this file seven days a week Ability to accept multi-page combined image or single page Supported image types:.tiff (compressed/non-compressed),.bmp,.jpg/.jpeg,.gif,.pdf 15

16 Questions?

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