Chargebacks vs RDRs - Verifi and Ethoca

Chargeback Alerts: A Critical Tool for Merchants

Chargeback alerts are crucial for merchants, providing a brief window to resolve disputes before the chargeback process begins. These notifications inform merchants when cardholders attempt to dispute transactions with their issuing banks.

Once an alert is received, merchants have limited time to address the issue and prevent it from escalating into a chargeback.

The two leading providers of these alerts are Ethoca and Verifi, both of which offer pre-dispute management services.

Using RDRs with Verifi and Ethoca: Key Differences

In the world of e-commerce and payment processing, managing chargebacks is a critical task for merchants. One effective method for chargeback prevention and resolution is the use of RDRs (Representment and Dispute Resolution). Two platforms that facilitate the RDR process are Verifi and Ethoca, both of which help streamline dispute resolution but with distinct approaches and features.

Verifi

Verifi, primarily focused on chargeback management and dispute resolution, is a platform designed to assist merchants in handling chargebacks. It provides tools to manage the entire process, typically working with financial institutions to allow merchants to gather evidence and submit their case for representment (the act of contesting a chargeback). The platform offers a variety of data points, such as transaction details, customer communication, and proof of delivery, all of which can be used to dispute chargebacks effectively.

One of Verifi's main strengths lies in its data analytics capabilities. The platform allows merchants to track chargeback patterns, helping identify recurring issues with specific customers or payment types. This data-driven approach can provide valuable insights for preventing future disputes. However, Verifi is often seen as a more reactive tool—merchants typically use it after a chargeback has been initiated. While it excels in handling disputes once they arise, it may not be as proactive in preventing them.

Ethoca

Ethoca, on the other hand, goes beyond chargeback representment. It offers a collaborative platform where merchants and financial institutions can share chargeback data in real-time. The platform’s core functionality revolves around collaborative dispute resolution, which involves merchants receiving chargeback notifications from issuing banks before the dispute is finalised. This proactive approach gives merchants the opportunity to address the issue directly with the customer or issuing bank, potentially preventing chargebacks before they even occur.

Ethoca’s real-time notifications and direct communication with issuing banks are highly beneficial for merchants seeking to prevent chargebacks. By providing early alerts, Ethoca allows merchants to engage with customers and resolve disputes quickly, potentially avoiding the need for a representment process. This makes Ethoca a more proactive solution compared to Verifi, as it focuses on preventing disputes before they escalate.

Key Differences

The primary difference between Verifi and Ethoca lies in their approach to chargeback management. Verifi is more focused on representment, allowing merchants to contest chargebacks after they have occurred. It provides a comprehensive set of tools for managing disputes once they arise. In contrast, Ethoca emphasises prevention and early intervention, offering real-time notifications to merchants. This allows them to engage with customers or banks to resolve disputes before they escalate into chargebacks.

In summary, Verifi and Ethoca both play important roles in chargeback management, but their methods and timing of intervention differ. Verifi helps merchants handle disputes after the fact, while Ethoca provides tools to prevent disputes from occurring in the first place, making it a more proactive solution for chargeback management.

Do Merchants Need Ethoca and Verifi Alerts?

Merchants can significantly benefit from implementing both Ethoca and Verifi alerts. That said, we recommend evaluating your target markets and identifying the root causes of chargebacks. This will help you decide whether to implement both services or just one.

Ethoca and Verifi alerts offer valuable solutions for merchants looking to reduce chargebacks, improve customer experience and minimise operational costs.

By leveraging both Ethoca and Verifi alerts, merchants can enjoy comprehensive protection against chargebacks, ensuring smooth payment operations while maintaining a positive customer experience.