Mastercom® Dispute Resolution€¦ · chargeback costs. 1 •Operating costs from chargebacks...

Expedite resolution, reduce chargebacks and enhance the customer experience

Mastercom® Dispute Resolution

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• For every $1 disputed, US merchants and issuers incur $1.50 more in chargeback costs1

• Operating costs from chargebacks impact profits up to 20%2

• $2.4 billion in combined operational costs of chargebacks – equaling 20% of US issuer losses1

• US Friendly fraud rose 41% in the last two years4

• Nearly 50% of US chargebacks experienced by digital merchants are thought to be a result of friendly fraud1

• US friendly fraud victims doubled in 2018 – equaling 15% of all fraud victims4

• 63% of US cardholders decreased patronage with retailer after experiencing at least one decline because of suspected fraud1

• Merchants lose out on $118 billion in sales due to false declines each year3

ChargebacksFalse Declines

1. JAVELIN. THE CHARGEBACK TRIANGLE. 2018. 2. AITE. THE GLOBAL CHARGEBACK LANDSCAPE: RAPIDLY EVOLVING. 2018. 3. CHARGEBACKS911. CHARGEBACK STATS FOR 2017. 4. AMERICAN BANKER. FRIENDLY FRAUD IS ON THE RISE. 2019.

More digital transactions leads to more false declines, friendly fraud and chargebacks

MASTERCOM DISPUTE RESOLUTION

Consumer “Friendly” Fraud

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Warranting continued investment and innovation in chargeback management

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1 JAVELIN. THE CHARGEBACK TRIANGLE. 2018.. 2. MERCATOR ADVISORY GROUP. CREDIT CARD DISPUTE MANAGEMENT: TRANSACTIONS IN THE BILLIONS BRING EXPECTATIONS IN THE MISSIONS. 2018. 3. AITE. GLOBAL CHARGEBACK LANDSCAPE RAPIDLY EVOLVING. 2018.

• Issuer and merchant costs to manage disputes continue to rise

• Acquirers and processors are charging merchants to service chargebacks

• High customer frustration with dispute experience and false declines

• Explosive growth in associated friendly fraud costs

75% of total fraud losses are from chargebacks and friendly fraud3

• Rapid payment innovation and new market entrants focused on consumer experience

• Digital giants driving industry change for brand-agnostic solution

76% of US cardholders contact their bank instead of the merchant for a refund1

$20-$25 of an issuer’s budget goes to the investigation and resolution of a single dispute2

$31 Billionin total US financial institution

and merchant losses due to chargebacks1

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Mastercom’s three-step strategy to reduce chargebacks in the payments ecosystem

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Consolidatedisputes

Checkfor invalid chargebacks

Collaborate with merchants

Mastercom Claims Manager merges dispute processes

into one platform

Mastercom Collaboration bridges the gap between

merchants and issuers

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Mastercom rules engine helps to remove friction caused by invalid chargebacks ©

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Manage disputes from end-to-end throughout the lifecycle

Creates and tracks disputes from end-to-end throughout the entire lifecycle

MASTERCOM CLAIMS MANAGER

USER INTERFACEAPI INTEGRATION

TRANSACTION RESEARCHDISPUTE INITIATION

DOC & NON-DOC DISPUTESCLEARING INTEGRATION

RULES ENFORCEMENTF&LD INTEGRATION

REVERSAL/FEE COLLECTIONSFORMS AUTOMATION

DASHBOARD & REPORTING

Enables dispute initiation of chargebacks, re-presentments and retrieval requests in place of customer-supported back-office systems

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ACQUIRERISSUER

Integrates with customer platforms to provide multiple access options via user interface or Mastercard API

Manages all dispute cycles within single “claim” until closure

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Collaborate to reduce operational costs and improve the consumer experience by avoiding lengthy chargeback cycles

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MASTERCOM COLLABORATION

• Assigns claim number to all disputes to facilitate transaction lifecycle transparency

• Acts as source of record for all claims/disputes • Enforces data-driven rules leveraging authorization and

clearing records• Blocks invalid chargebacks• Enables transaction lifecycle transparency for merchant-

refunded disputes to block potential trailing chargeback initiation

• Facilitates credits between parties including merchant issuance of consumer credits

• Updates F&LD• Does not move funds

RESOLUTION YES/NO


ISSUERCONSUMER ACQUIRER* MERCHANT

*ACQUIRERS INTEGRATED INTO COLLABORATION IN 2020

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Avoid chargebacks by sharing dispute insights prior to formal chargebacks for quicker resolution

1 2 3Bridges dispute communication between consumers, issuers, acquirers, and merchants

Integrates with issuer dispute websites to provide collaboration between issuers and merchants

Alerts merchants of disputes prior to formal chargeback cycles so they can quickly respond and resolve consumer inquiries

4 5 6 Improves the consumer experience with fast, final, once-and-done dispute resolution

Informs merchants with account data insights based on active fraud chargeback activity

Provides near real-time dispute data visibility to support merchants’ just-in-time shipping decisions

Mastercom Collaboration:

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Collaboration enables dispute insights for quick resolution

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CONSUMER

Initiates dispute

ISSUER

Mastercom places first chargeback in “pending” status and sends to the Ethoca merchant network

Initiates first chargeback in Mastercom Claims Manager

Mastercom changes chargeback status from “pending” to “rejected”

Mastercom immediately changes chargeback status from “pending” to “processed”, funds move in Clearing

COLLABORATION(via Mastercom or direct-to-Ethoca) MERCHANT

Receives first chargeback notification

Views merchant refund details in Mastercomreconciliation reports (TQR4, T5G2), UI or API

Receives refund from merchant

Sends confirmed fraud notification direct to Ethoca merchant network

Ethoca sends alert to merchant network

Receives Ethoca alert

RESOLUTION – MERCHANT REFUND

Ethoca sends alert refund status to issuer

NO RESOLUTION

Processes refund directly to consumer

Does not refund consumer

Processes chargeback in Mastercom Claims Manager

Receives dispute status updates from issuer

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Reduce chargebacks and improve the customer experience with prompt, efficient dispute resolution

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Mastercom Dispute Resolution can help issuers, acquirers and merchants with their bottom line

Save an average of 20% in chargeback processing costs,increasing automation and productivity with consolidated dispute processing that significantly shortens resolution and cycle processing timeframes

Reduce chargeback volumes an average of 20%, collaborating to resolve disputes outside of chargeback cycles

Resolve friendly fraud disputes within hours to a few days, pre-empting disputes from advancing to chargebacks and saving weeks, or even months, of dispute mitigation

Avoid losses with real-time account data insights, supporting just-in-time merchant shipping decisions

Bottom line = Mastercom

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Technology Enhancements to the Mastercom ® UI and APIs for 2019-2020

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November 3, 2019

Joseph Maher

Lead Analyst

Operations and Technology

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UI Changes:• Collaboration Opt-out

Screen (AN 2542)• Corrected issue with

Sender/Receiver Case Filing Queues

• Corrected Reporting Issues in Claims Manager

• T5G2 Available via Direct Download

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API Updates:

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1. Version 6 now available in MTF and PROD (Nov 2)a. New Endpoints

• Get Queue with lastModified Date Filter• Get Case Filing Claim Information

b. Modified Endpoints• Get Claim Details (Reconciliation

amounts/currencies, support for multiple retrieval requests, Document Status)

• Create Chargeback (Support for Installments, indicator for partial representments/arb chargebacks)

• Reconciliation API (T5G2 Support)2. Transaction Search for Acquirers (Date TBD)3. Transaction Search without PAN (Date TBD)

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New Reconciliation Report (T5G2/T5G4)

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• Mimics TQR4/TQR6 with several enhancements• Header record• Delivered with all clearing cycles regardless of activity through Claims Manager• DE5/DE50 with and without interchange fees for reconciliation• Reconciliation conversion rate used• Original Transaction Amount (Helps Identify partials)• All transaction fees• Reason for Rejection now has the error code and the description

Questions?

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Mastercom® Dispute Resolution€¦ · chargeback costs. 1 •Operating costs from chargebacks...

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