5076297064001 5484832486001 5441187193001 vsVisa will be implementing a new chargeback dispute process, Visa Claims Resolution (VCR), on April 13, 2018: These rule changes will affect merchants, acquirers, and issuers worldwide that handle Visa transactions. VCR benefits include simplifying the dispute process, providing quicker case resolution and filtering out invalid disputes before allowing them into the chargeback process. Another major change in VCR is the elimination of representment rights on fraud and authorization disputes, as only valid disputes would have been submitted. For you, as a merchant, this could reduce the number of chargebacks you receive, but may also shorten the time period in which you have to respond.

Here’s the rundown of changes that merchants should know before the changes go into effect April 2018:

-The timeframe for merchants to submit a response is decreased from 45 days to 30 days.
-Invalid chargebacks are stopped before they reach the merchant through new automated workflows.
-Fraud and authorization chargeback responses are only allowed when the merchant can definitively prove the dispute is invalid.
-Reason codes are getting an organizational makeover, but the compelling evidence remains largely unchanged from what’s currently accepted.



Visa found that on average it takes 46 days to resolve a dispute with more complex cases taking over 100 days. VCR was created to cut down on the time, cost, and overall chargeback that a merchants receives.

The new system will eliminate chargebacks where possible which means that if a customer tries to initiate a chargeback when it is past the time limit or does not meet the minimum criteria, Visa will automatically block the dispute from becoming a chargeback. Requiring this extra information from the get-go will reduce unnecessary chargebacks, help merchants understand exactly why the chargeback occurred, and save time for everyone involved.

Currently, merchants have 45 days to respond to a Visa chargeback. VCR reduces the time frame to 30 days. Visa anticipates the new process’ required up-front information will do away with the back-and-forth between the merchant, acquirer, and issuer. Resulting in quicker chargeback resolution, with expectations from Visa indicating resolution within 31 days.



The new dispute resolution process will follow one of two workflows: Allocation or Collaboration

The Allocation Workflow

All fraud and authorization chargebacks will go through the Allocation workflow. Here, Visa performs a series of automated checks on the dispute. These automated checks will tell Visa a few things:

-If the fraud dispute is on 3D secure authorized transactions.
-If the cardholder disputed the purchase after the allotted timeframe.
-If the disputed transaction has already been refunded.

If Visa detects any of the above items, the dispute will be blocked and it won’t become a chargeback. The Allocation workflow will result in less invalid chargebacks that merchants will have to deal with.

However, if the dispute passes through the automated workflow without triggering any invalid sensors, Visa will assign liability to the merchant. Defending against the chargeback will only be possible in specific circumstances. Essentially, responses will only be allowed if the merchant can definitively prove the chargeback is invalid.

How is this different than the current process? Currently, merchants can submit responses to all fraud chargebacks, regardless of the strength of the rebuttal and/or the evidence provided. This new system means that merchants need to respond based on what’s specifically stated in Visa’s rules and regulations.

The Collaboration Workflow

Disputes Assigned to this Workflow: Processing Error and Consumer Disputes

Visa explains that the majority of disputes will flow through the Allocation workflow, but a portion will still require interaction between merchants, acquirers, and issuers. The Collaboration workflow is essentially the same as today’s chargeback process. Its goal is to simplify communication between each party and reduce the overall chargeback timeframe.



Visa’s new process introduces four dispute categories and associated numerical labels (Fraud – 10, Authorization – 11, Processing Errors – 12, Consumer Disputes – 13) under which the new, renamed reason codes will be placed. Visa chargeback reason code 75 ‘Transaction not Recognized’ is being retired.


VCR Dispute Reason Codes
 10.1 – EMV Liability Shift Counterfeit Fraud  11.1 – Card Recovery Bulletin  12.1 – Late Presentment  13.1 – Merchandise/Services Not Received
 10.2 – EMV Liability Shift Non-Counterfeit Fraud  11.2 – Declined Authorization  12.2 – Incorrect Transaction Code  13.2 – Cancelled Recurring
 10.3 – Other Fraud – Card Present Environment  11.3 – No Authorization  12.3 – Incorrect Currency  13.3 – Not As Described or Defective Merchandise/Services
 10.4 – Other Fraud – Card Absent Environment    12.4 – Incorrect Account Number  13.4 – Counterfeit Merchandise
 10.5 – Visa Fraud Monitoring Program    12.5 – Incorrect Amount  13.5 – Misrepresentation
     12.6 – Duplicate Processing/Paid by Other means  13.6 – Credit Not Processed
     12.7 – Invalid Data  13.7 – Cancelled Merchandise/Services
      13.8 – Original Credit Transaction Not Accepted
      13.9 – Non-Receipt of Cash or Load Transaction Value


Even with these simplified categories, Visa assures that they will continue to provide the same level of data — and in some cases even more — to merchants. Again, their end goal is to help merchants understand the reason for the dispute. Issuers will also be required to fill out a Dispute Questionnaire to provide all parties with the information needed before the dispute is initiated.


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