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Why Dispute Quality Should Matter to Issuers

Increase Your Win Rate with Automation

Author: Kate Firuz, Director of Product

Disputes Impact the Bottom Line and Cardholder Experience

To a Card Issuer, there are two key weights that must be balanced at all times – the bottom line, and your cardholders’ experience.

There is no other time when this balance comes into play more so than when a dispute happens. Your cardholder is unhappy with a transaction – whatever the reason may be – and they turn to you to begin the dispute process. The ultimate goal of the process is to “win” the case against the merchant, meaning that the amount of the transaction is returned to the cardholder’s account and back into the bank’s ledgers. Coupled with the actual cost of processing the dispute, losing means additional financial loss and an unhappy client.

The success of winning a dispute depends on several factors, some of which cannot be done – like when a transaction is properly authenticated by a merchant (ex. 3DS) which shifts the liability of dispute to the issuer at all times. For other situations however, such a fraud, goods/services not as described, poor refund policies etc., the outcome of the dispute is quite dependant on the quality of its submission and lifecycle.

So what entails a dispute submission? It all begins with a conversation between a cardholder and an agent – whether this is in-house at the financial institution, or outsourced. Traditionally, the agent asks a series of questions about the transaction and situation around the transaction, picks a Reason Code for the claim, uploads the cardholder declaration (file is downloaded – emailed for signature – wait for email back from cardholder – upload form to system), adds any supporting documentation, and sends into the ether of the network to assess. Generally the entire process of dispute review between the issuer, network, merchant acquiring bank, and merchant, takes approximately 45 days with very little visibility for anyone in the interim.

Back “in the day” when online transactions didn’t exist, disputes were less common, considering that you had to show up, card in hand, for any purchase. Now that online payment systems have revolutionised the way we conduct transactions in the digital age, the risk of fraud and disputes and cardholder complaints has increased dramatically. Despite this, the end-to-end process of submission is not regulated but rather mandated through a series of guidelines that are not always easy to follow efficiently. This leads to a wide range of manual processes, blind spots and financial loss for Banks, Financial Institutions and Agents.

As outlined above, it is still common to see transactions and disputes being manually reviewed, completed, and submitted using spreadsheets and multiple sources of information or processing. Naturally, this process presents many challenges:

➡️ Each Card Network has specific guidelines and platforms where chargebacks are processed

➡️ Processing of the dispute or fraud case and the associated notification process vary and are highly time-consuming as it involves several parties, steps or systems.

➡️ A manual process is prone to errors and sufficient documentation could be missed when disputing a case, leading to a Lost case, and lost funds, for the Issuer and cardholder.

Modernizing and automatic how banks and credit institutions manage disputes and fraud is one of the key modules supported by Paytic’s SaaS technology.

➡️ Automated details, meta-data analysis to ask only relevant questions and generating the right Reason Code to ensure quick review and processing

➡️ A Single-Point API, to manage both Visa and Mastercard dispute claims in one platform with pre-populate claim details, easy document submission and e-signature.

➡️Real-time updates, following the claim in real-time and reporting lifecycle updates every 4 hours.

➡️Process Optimization, disputes are processed within a couple days instead of the standard 45 and clients benefit from significantly increased win rates.

If your dispute process could use a little tweaking, contact us to see how we can help alleviate the strain on back-office teams. Ask for a Demo here.