Visa Chargeback Process (VCR)

1. WHAT IS THE VCR (VISA CLAIM RESOLUTION)? 

VCR is different from the Mastercard process as it is a liability assignment model rather than a litigation-based model. VCR uses existing data to simplify the processing and time frame of disputed transactions. Using the data from VCR, it stops invalid disputes from being initiated.

The main benefits of VCR are:

• It stops invalid disputes
• Streamlined processing
• Consolidation of chargeback reason codes
• Faster resolution time of cases

VCR REASON CODES

 2. ALLOCATION (FRAUD AND AUTHORISATION DISPUTE CYCLE)

In this circumstance, VISA automatically assigns liability. VISA does not allow fraud related disputes for transactions processed via 3DS channels. However, if it is a non 3DS transaction, the Merchant is considered liable for the dispute.

2.1. What is required by the merchant?

The Merchant must decide whether to dispute the chargeback. If they want to dispute it then pre-arbitration should be initiated by the acquirer. The Merchant has 20 days to request this pre-arbitration and then the issuer has 30 days to respond. However, if declined, the acquirer has 10 days to file for arbitration. 

Some of the requirements for pre-arbitration are:

• A credit or reversal issued by the Merchant was not addressed by the issuer in the dispute.
• The dispute is invalid.
• The cardholder no longer disputes the transaction.
• Compelling evidence e.g. Contracts, emails, photos, signed order forms.

3. COLLABORATION (PROCESSING ERRORS AND CONSUMER DISPUTE CYCLE)

In this circumstance, consumer and processing errors disputes should be resolved between the issuer and acquirer – VISA does not assign liability to any of the parties.

Some of the requirements for this are:

• Dispute condition 13.1 merchandise/ services not received – compelling evidence needed.
• Dispute condition 13.2: cancelled recurring transaction - supporting documentation/certification needed.
• Dispute condition 13.3: not as described or defective merchandise/services - supporting documentation/certification needed.
• Dispute condition 13.5: misrepresentation of terms of sale, supporting documentation/certification needed.
• Dispute condition 13.7: cancelled merchandise/services, supporting documentation/certification needed.

3.1. What is required by the merchant?

The Merchant will receive a dispute - they must then decide whether to accept the dispute or challenge the dispute. The Merchant then has 30 days to respond with a Dispute Response. This will be in the form of a PDF showing all the evidence they have against the dispute reason.

If the Issuer wishes to escalate the case, they have 30 days to initiate Pre-arbitration. The Merchant will receive the Pre-arbitration from the Issuer and then have 30 days to decide to accept the Pre-arbitration or challenge it with a Dispute Response/Pre-Arbitration. At this point, any additional Information can be added to the case response.

Before sending a response to Pre-arbitration the potential fees should be taken into consideration.

VISA FEES