3DS is a security tool that double-checks who placed the online payment. That extra check stops the fraudulent chargebacks that can hurt your business. At checkout 3DS can add another verification step where buyers confirm their identity with their bank – maybe with a password, their fingerprint or a code sent to their phone. The […]
An acquirer is the financial institution that processes credit card payments for merchants. They’re basically the main support system in the chargeback world and give merchants the tools and help needed to stop and fight payment disputes. They also take care of all the technical parts of every transaction. Acquirers are the main link between […]
A chargeback alert is an early warning that lets merchants know when a customer starts a dispute. With these alerts merchants can take care of the problem before it turns into a formal chargeback that could hurt their ability to process payments. Most processors will send you these alerts within just a few hours after […]
Chargeback arbitration is where everything ends up if a dispute with a cardholder can’t be resolved any other way. At this point, an employee at Visa or Mastercard looks at the case and makes a ruling you can’t appeal. Cases with bulletproof documentation can go either way – it hinges on who reviews it and […]
Credit card associations are massive organizations that create and enforce all the laws and steps that everyone has to follow whenever payment disputes come up and need to get handled. Credit card associations like Visa and Mastercard don’t actually hand out cards to customers. They license their payment systems and branding to banks which then hand the […]
Credit card authorization is when your payment system double-checks that a customer actually has money in their account and they’re using their own card. The whole verification happens in maybe 2-3 seconds while your processor communicates with their bank and then you either get the green light or it gets declined. I worked with a […]
AVS is a fraud-prevention tool that verifies billing addresses in card-not-present transactions to help merchants cut down on chargebacks. When customers buy online, over the phone, or through mail order, they’re typing in their card information without physically presenting the card – which opens the door for fraudsters with stolen card numbers. AVS compares the […]
A Bank Identification Number (BIN) is the first 4-8 digits of any payment card number that tells you which bank issued the card. It’s a valuable tool that merchants can use to identify fraud patterns and stop chargebacks before they happen. The problem is that most merchants don’t pay enough attention to these numbers when […]
A credit card chargeback happens when a customer’s bank takes money straight out of a merchant account and returns it to the customer. The bank doesn’t need to ask first – they just take the money. This hits businesses hard because the sale is lost, fees between $15-$100 have to be paid, and if it […]
Compelling evidence is the documentation and proof that merchants have to pull together when they’re disputing fraudulent chargebacks. Merchants have to work faster to compile evidence that can show the transaction was completely legitimate and authorized when a customer contacts their bank and disputes a charge on their statement. This evidence package then stands as […]
Visa’s Online Authentication Framework is an authentication system that helps cut down on checkout friction for online shoppers as it keeps transactions safe – it also shifts the fraud liability from merchants over to the card networks. Every merchant wants to make sure that the person who buys is who they claim to be. But […]
A debit memo is an official document that adjusts a customer’s account balance upward, and it can actually help head off chargebacks before they start. It’s the first line of defense for correcting an undercharge or adding valid fees to a customer’s account. Most merchants miss how helpful debit memos can be for chargeback prevention. Maybe you […]
A dispute is when a customer calls their bank to question a transaction on their statement. It happens after they see a charge they don’t remember or think is wrong. Maybe they forgot about a subscription renewal or their spouse bought something without telling them. Next comes contact from the bank asking you as the […]
A dispute tracking program is how card networks monitor which merchants are receiving too many chargebacks. When I first came across these programs, it was shocking how rapidly they escalate – businesses that cross their limits face expensive consequences and might even lose the ability to process payments. So here’s where it gets expensive – […]
A double refund happens when you lose payment twice for the same transaction. First your customer gets their money back through the normal refund process and then they file a chargeback on top of that. At that point you’re out twice the original sale amount. Double refunds hit harder than most owners expect. You lose […]
Electronic fund transfers (or EFTs) are what make modern payment processing possible – they include everything from ACH transfers to wire transfers to card transactions. All three of these different methods have different settlement timelines and they each carry their own reversal dangers as well. Your chargeback prevention strategy has to account for all of […]
EMV has become the standard used for chip-enabled payment cards, and it’s made to help protect merchants from those expensive fraud-related chargebacks. Customers insert or tap their chip cards at your terminal, and you automatically get protection from liability if that transaction turns out to be fraudulent. This protection wasn’t always available, and plenty of […]
Mastercard has its own label for businesses that get chargebacks – they call them “excessive chargeback merchants” or ECMs. This compliance status can threaten your ability to accept credit card payments at all and it’s obviously a big problem for any business. If Mastercard places you on their ECM list, you’re going to get hit […]
Mastercard uses the Excessive Chargeback Program to monitor merchants with high dispute rates. If too many customers are disputing charges, they’re watching – and they’re not happy about it. The tracking programs and their fines caught my attention when first encountering them. They start merchants off at $500 a month. But these penalties can climb to $25,000 […]
I’ve handled payment disputes for years, and what’s still striking is how much chargebacks actually drain from a business. Let’s say that you have a hundred-dollar transaction that goes south. Between the chargeback fee (which usually runs you fifteen to twenty-five dollars), whatever penalties your processor decides to hit you with, and if you’ve already […]
A fraudulent transaction happens when somebody buys something without the cardholder’s okay, and to make matters worse, merchants wind up carrying the whole cost through the double whammy of lost revenue and those painful chargeback fees. These unauthorized purchases hit merchants hard from multiple angles at once. You lose the merchandise that you’ve already shipped […]
Friendly fraud is downright frustrating – it happens when a cardholder disputes an order that was completely legitimate (even though they placed it themselves). Merchants hate this because the transaction was completely fine. Payment went through just fine, the authorization checks passed and nothing looked suspicious. Customers got just what they ordered when they expected […]
Fullz are stolen identity packages that are bought and sold on the black market. Criminals use them to commit payment fraud and to generate chargebacks against businesses. Each package that they purchase contains a full identity profile with everything a fraudster would need to pretend to be another person. That includes full names, home addresses, […]
A credit card issuer is the bank or financial company behind each card you carry, such as Visa, Mastercard, American Express, and Discover. When a customer swipes their card at your store, the issuer is the one who is fronting the money for that purchase in that moment. If the customer later gets upset and […]
The MATCH list is Mastercard’s worldwide database that keeps track of merchants who have lost their payment processing accounts for what they see as high-risk reasons. Once your business ends up on this list, most payment processors just won’t work with you anymore – it works as a shared blacklist that banks and processors will […]
A Merchant Category Code or MCC is a 4-digit number that payment processors use to see what business you run. This code can have a strong effect on how much you pay to process credit cards and on how closely banks watch your chargeback rates. Card networks use your MCC to figure out if they […]
A credit card merchant account is a separate business bank account that lets you take card payments from customers. Without one, you can’t accept credit or debit cards at all. When customers pay with their cards, the money doesn’t go directly to your standard business bank account – it goes through your merchant account first […]
A Merchant ID is basically a code that payment processors assign to your business so you can start accepting credit and debit card payments. This identifier is your business’s personal ID number in the payment world and connects every transaction back to your business account, helping payment networks track where the money is going. It’s […]
Credit card network laws are basically the instructions that card businesses like Visa and Mastercard give to merchants on how to manage transactions and dispute chargebacks. These laws have a big effect on your business because they determine if you’ll win or lose when a customer challenges a charge. Breaking any of them means you’ll […]
Non-fraud chargebacks happen when customers dispute charges for reasons that aren’t about stolen cards or unauthorized purchases. We’re talking about legitimate customer complaints here – duplicate charges, orders that never arrived, or products that didn’t match what was advertised. This distinction actually matters quite a bit because once you see that a chargeback isn’t fraud-related, […]
Partial chargebacks work just like you’d expect from the name – they happen when a customer disputes only part of a transaction instead of the whole order amount. Say a customer places an order worth $100. When the package arrives, one item out of a few is damaged or defective, instead of disputing the full […]
A credit card payment gateway is the technology that takes care of card transactions between your business and your customer’s bank. It’s also your first line of defense against chargebacks and does this through built-in fraud detection tools and data encryption. Every time one of your customers enters in their card info on your website, […]
A credit card payment processor is the service that takes care of the transaction data that moves between customers, merchants, banks and card networks. It’s what actually makes the payments go through successfully and makes sure everyone who is part of the payment gets the right information at the right time. Processors check that each […]
Credit card pre-arbitration is your final chance to resolve a disputed charge before the card networks step in with an expensive arbitration. Pre-arbitration is the phase that kicks in after representment fails to convince the issuer to reverse the chargeback and gives you one more opportunity to present evidence and make your case without the […]
Chargeback ratio measures how frequently transactions get disputed compared to total sales. Payment processors look at this number every month to decide if they should continue accepting credit card payments from the business. Businesses get taken aback by how strict the limits are. Visa caps merchants at 0.65%, and Mastercard gives a bit more room […]
RDR stands for Rapid Dispute Resolution, and it’s basically Visa’s way of stopping disputes before they turn into expensive chargebacks. The system works by automatically issuing refunds the moment a dispute comes in. But only if it matches the rules that you’ve set up ahead of time. What this really does is take all that […]
A reason code is a short combination of letters and numbers that credit card networks use to explain why a customer decided to dispute a charge. A customer calls their bank to complain about a transaction they don’t remember seeing or aren’t happy with and the bank has to put that complaint into a category. Reason codes […]
Credit card recurring billing is an automated payment system that charges customers at set intervals for services or subscriptions. These setups can create some challenges unique to subscription-based businesses. Card networks see recurring billing as high-risk and here’s why. Customers usually lose track of these charges or fail to remember them when they show up […]
Credit card refunds affect your bottom line, and they matter a lot if you want to stay in solid standing with your payment processors. When a customer wants their money back, how you handle it is going to affect your chargeback ratio and your processing fees for months afterward. Refunds are also one of the […]
A remittance is simply when money gets sent from one location to another. Running an online shop or working with international customers means you’ve likely dealt with these payments in your system at some point. The person sending the money could be in one country while the person receiving it is halfway across the world. […]
Merchants lose $3.20 for every dollar of fraud that comes through chargebacks alone. When customers dispute transactions that they actually made, merchants take a financial hit that most of them think they just have to accept. Chargeback representment gives you a way to recover those lost funds. You can challenge the chargeback when you submit […]
A credit card retrieval request is how the bank asks you to prove that a particular transaction took place. The customer’s bank wants to see your proof before they can figure out if they’ll move forward with a dispute. Once you receive a retrieval request, the bank tries to get information about a particular transaction. […]
Return fraud is when fraudsters manipulate refund policies to steal money or store credit from transactions. Fraudsters have a few ways to do this. One way is to buy items with stolen cards and then return them for cash refunds. Receipt manipulation and employee collusion can create fake transaction histories that get around the verification […]
A credit card reversal is when the money from a transaction goes back to the customer’s account. It sounds easy enough. But this process can seriously affect your bottom line if you don’t handle it the right way. Every business owner needs to know how reversals work because they directly affect your revenue and your […]
SCA stands for Strong Customer Authentication and it’s a European regulation that makes customers verify who they are when they make electronic payments. PSD2 laws created this requirement. This extra security step has become one of merchants’ best tools for preventing fraud-related chargebacks. This matters quite a bit for your business. It gets much harder […]
Mastercard’s Token Authentication Service uses biometric verification with tokenized payments. This lets customers finally ditch passwords and one-time codes for easy fingerprint or face scans stored right on their own devices. What makes TAS especially interesting to merchants is that it delivers instant fraud liability protection without the checkout problems that make customers leave their […]
Triangulation fraud is a pretty nasty scheme where a fraudster inserts themselves between a legitimate buyer and your business. The fraudster takes payment from the buyer (usually through a marketplace or third-party site), then they turn around and use stolen credit card information to actually buy the product from you. They pocket the buyer’s payment […]
Visa Claims Resolution is Visa’s automated dispute management system that was released back in 2018 and has helped merchants cut their chargebacks by anywhere from 7-18%. Before VCR came around, merchants were stuck with a manual chargeback process that was hard to get through. The old system had 22 different reason codes that you had […]
Visa Strong Evidence 3.0 is Visa’s newest system that finally lets merchants fight back when customers file bogus fraud claims on online purchases – it gives store owners the tools they need to prove that a customer did make that purchase – even when the customer says they didn’t. It’s big news for business owners […]
The Visa Fraud Monitoring Program is Visa’s way of tracking merchants whose fraud rates are far higher than what they usually see across the network. What they’re actually doing is trying to find these fraud patterns before they turn into a problem for your business. It’s their early warning system that starts once your fraud […]
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