What is Visa Compelling Evidence 3.0?

It’s big news for business owners who are hurt by shoppers who buy something online and then turn around and claim they never authorized the purchase. Friendly fraud makes up a giant portion of all the chargebacks that merchants face every day.

Before Strong Evidence 3.0 came along merchants were stuck whenever customers filed these kinds of disputes. Card networks almost always sided with the customer and merchants basically had to take the loss and move on. Merchants can now present strong evidence to show that the customer did make that purchase and this shift changes everything about how Visa fraud disputes work.

Visa rolled out this system in 2024 and it’s become one of the biggest advances in merchant protection that we’ve seen in quite some time. Before this change merchants would nearly always lose these disputes without even a fair shot at it. Merchants finally have a decent chance to win back the revenue that they’ve worked so hard to generate. Merchants must collect the right evidence and present it to get results.

How It Works

Visa Strong Evidence 3.0 has turned into one of the most helpful tools that merchants have for fighting back against fraudulent chargebacks.

Your job is to find two previous transactions from that same card number. These transactions need to fall within a particular window – somewhere between 120 and 365 days old. And the customer can’t have disputed any of these earlier purchases. That matters because you’re showing a pattern of normal buying behavior over time.

Evidence comparison gives you a couple of options. You can either match two primary types of evidence (data points like IP address and device fingerprint work well) or you can match one primary type with something secondary like a shipping address or an email. Either way helps you build a strong case that proves the same person was behind these purchases.

A chargeback will eventually land on your desk so your next step is collecting that evidence and sending it to your payment processor. Most payment processors now have CE 3.0 support built right into their systems which makes the whole process much less painful than it used to be. You just upload your transaction info and the system takes care of most of the comparison work automatically. Payment processors are better at automating this whole process so each year it gets to be less of a headache.

This whole strategy depends on maintaining records. You need to store the transaction info like IP addresses and device fingerprints for at least a full year. Without access to these records CE 3.0 is useless for defending against chargebacks. Merchants are now updating their systems specifically to capture and store this type of data automatically.

How it Affects Chargeback Prevention

Visa Strong Evidence 3.0 finally gives merchants a powerful way to fight back against friendly fraud. Before this program came along merchants had no recourse if customers claimed that they didn’t make an order that they actually did make. Merchants finally have a framework that lets them defend these cases with actual bite behind it.

Friendly fraud’s hard numbers make it quite obvious why merchants need to take this very seriously. Friendly fraud is taking billions of dollars from businesses year after year and the problem continues to get worse. False disputes from customers make the situation a lot worse for merchants. Merchants lose the product and the payment and on top of that the card networks tack on extra chargeback fees that can quickly add up over time. Strong Evidence 3.0 changes everything because it finally forces card issuers to look at the merchant’s evidence before they decide on who wins the dispute.

Compared to the old system, the improvements are huge. In the past – even if merchants showed rock-solid proof that a customer received their order then the bank might just ignore the evidence anyway. Card issuers are now obligated to review all kinds of evidence like delivery confirmation and the previous order history – which means that merchants will have far fewer automatic losses.

Avoiding chargebacks keeps the chargeback ratio much lower. That helps merchants stay out of expensive watch-list programs that can cost thousands per month in fees alone. Merchants also get to hold on to the revenue from legitimate sales instead of having to refund customers who are lying about their purchases.

Merchants see the numbers work out well once this system starts working as it should. Every prevented chargeback saves them the transaction amount and the chargeback fee and protects the processing relationship with the bank. That can add up fast for businesses that see dozens or hundreds of disputes each month.

Example Scenarios

A customer has been happily receiving their weekly meal boxes for about eight months straight and then suddenly disputes their last three monthly payments. They tell their bank that they canceled the subscription months ago and claim that they never received any recent deliveries.

CE 3.0 can be helpful for merchants in situations like these. You can pull together pretty strong evidence – this same customer logged into their account just last week to update their meal preferences for the next batch of deliveries. Their delivery location has stayed the same as when they first signed up with you.

Even better, the email that they used to modify their menu selections came from the exact same device that they’ve used with your service since day one. You can send this evidence to Visa through the new CE 3.0 process.

Your evidence won’t always be strong enough to help you win your dispute. Sometimes a shopper has only made one buy from your store and then files a chargeback – there’s just not enough transaction history available to show any patterns in their behavior. Savvy customers who use different email addresses and different shipping locations for each order that they place with you make it much harder to connect those bits of info into a single story.

CE 3.0 works best if you can point to steady, easy-to-see patterns and can show repeated customer behavior over multiple transactions. Without those behavioral patterns to use, your dispute options become quite limited and you’ll have to find other kinds of evidence to build your case.

Requirements and Timeframes

Strong Evidence 3.0 was rolled out in April 2024 and any disputes that kicked off after this date fall under these new guidelines. Your old methods for fighting chargebacks just aren’t going to work anymore.

Once you get a chargeback notification your countdown begins. Most merchants get around 10 days to pull together their evidence and send it back. That’s hardly any time to hunt down old records and put together a strong case. That’s why keeping your data well-organized and ready to go can make or break your response.

Data retention laws can vary quite a bit from one country to another and each region tends to have its own set of laws that businesses need to follow. Some places make businesses keep customer information for much longer than you’d expect. Other places have very tight laws about what data you’re allowed to store and how you can use it. Learn about your local laws now and it can save you from compliance issues down the road.

Formatting and submission laws for evidence can vary quite a bit from one payment processor to the next. Every platform has its own way of handling disputes and they all follow different sets of guidelines. A chargeback response that works just fine with one processor might need some little changes or reformatting for another company.