1. Payments Ed Forum Visa Claims Resolution (VCR) Update
Richard Stopic
Global Dispute Products and Back Office Solutions

2. Notice of confidentiality
The information contained herein is proprietary and CONFIDENTIAL to Visa. It is distributed to Visa clients and participants for use exclusively in managing their Visa programs. It must not be duplicated, published, distributed or disclosed, in whole or in part, to merchants, cardholders or any other person without prior written permission from Visa.
This document is not part of the Visa Core Rules and Visa Product and Service Rules. In the event of any conflict between any content in this document, any document referenced herein, any exhibit to this document, or any communications concerning this document, and any content in the Visa Core Rules and Visa Product and Service Rules, the Visa Core Rules and Visa Product and Service Rules shall govern and control.
Case studies, statistics, research and recommendations are provided “AS IS” and intended for informational purposes only and should not be relied upon for operational, marketing, legal, technical, tax, financial or other advice. Visa Inc. does not make any warranty or representation as to the completeness or accuracy of the Information within this document, nor assume any liability or responsibility that may result from reliance on such Information. The Information contained herein is not intended as legal advice, and readers are encouraged to seek the advice of a competent legal professional where such advice is required.

3. Agenda VCR objectives Key components Performance statistics
CNP top edits
CNP Volumes and Ratios
Resolution timeframes
Best practices
Key takeaways

4. Visa Claims Resolution – Program Objectives
Prevent invalid disputes
Better use of collected data
Streamline the process
Stop invalid disputes before they enter the dispute ecosystem
Use data available in VisaNet to make better liability decisions and identify abuse
Provide a more efficient and timely process for all parties
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5. Key Components of Visa Claims Resolution (VCR)
Investigate
Prevent Invalids
Workflows
Financials
Transaction Inquiry using VisaNet data
Merchant Search
Visa Merchant Purchase Inquiry (VMPI)
Prompt users to review associated credits
Associated Transactions
Prompts and Warnings
Edits to block
Indices calculation for monitoring
Response qualification
Allocation
Collaboration
Optional Collaboration
Absolute case statuses
Complete financial messages
Better data quality
Sooner clearing and settlement
Workflow and audit integrity
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6. Expectation vs. Actual ALLOCATION 81% COLLABORATION 19% EXPECTATION
Collaboration 20-40% of Claims
Allocation (Fraud & Authorization)
Benefits of Allocation:
Leverages all related transaction history
Enforces edits and rules up front, preventing invalid disputes
Simpler response mechanisms
Streamlined resolution with fewer cycles
Leads to quicker resolution
Allocation 60-80% of Claims
ALLOCATION 81%
COLLABORATION 19%
Source: VisaNet, C&S data for North America. VCR launch to June 2019

7. Disputes and Responses Global data since launch
~5%*
Transaction Amount: $42.36
Card Entry Mode: Chip
Merchant: Merchant XYZ
No Dispute rights
Terminal Capability: Chip enabled
PAN: XX-XXXX-1234
Averted disputes
10%
Invalid disputes
Cardholder
Merchant
Acquirer
27%
Response rate
(across both workflows)
Resulting in fewer interactions to resolve dispute
Issuer
21%
31%
Averted – Disputes Issuer began but never submitted
Invalid – Disputes that issuer submitted but do not comply with the Visa Core Rules and returned in real-time
Response rate – Ratio of responses acquirers are sending in response to disputes received (Dispute Response & Pre- Arbitration combined)
Interactions – An action taken on either the Issuer or Acquirer side, after the initial dispute
Resolution – Time taken to finally conclude the dispute
Average Resolution timeframe= 24 days
55%
Visa Confidential
Source: Combination of VisaNet C&S data and VROL application data, since VCR launch
* Preliminary numbers indicate ~5% of disputes are cancelled after initiation, and never pursued

8. Top Edits Blocking Invalid CNP Disputes#1
35 Max
Limit on the number of Card Not Present fraud disputes that can be processed on a single account number - Issuer may chargeback a maximum of 35 transactions on a single account number within a 120 day timeframe #2
Timeframe
Block disputes after the maximum time limit has been reached #3
Duplicate
Block duplicate disputes on transactions which have already been disputed or charged back #4
Verified by Visa
Block disputes on transactions fully authenticated by the Verified by Visa Service #5
Prior Fraud
Block disputes initiated for original transactions that occurred on a date after the first fraud report or first fraud chargeback for the same account number
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9. Dispute Volume and Ratio
VCR LIVE
Source: VisaNet C&S data, CNP
Visa Confidential

10. Resolution Timeframes
GLOBAL
GLOBAL
DAYS
DISPUTE
Visa Confidential
Source: VROL Indices data since VCR launch

11. Best Practices Issuing Credits and refunds Responding to cases
Do not provide a credit after the card issuer has initiated the dispute. This can result in an overpayment to the cardholder and add unnecessary steps to the dispute resolution process.
• Always issue credit in the currency originally requested during conversion.
• When issuing a credit, use the same merchant business name that was on the original transaction receipt.
• Process Visa payment credits immediately to avoid cardholder disputes.
Responding to cases
To avoid fees Issuers and Acquirers are recommended to respond sooner.
Work with your Acquirer to establish business minimums and thresholds for responses.
Managing risk
Utilize security protocols such as Verified by Visa to gain Dispute protection against potential fraud.
Utilizing other fraud preventative products, services and tools CVV2, AVS, Network Tokens etc.
Questions and more information
Merchant Best Practices Guide published in March 2019
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12. Key Takeaways
VCR introduced changes Globally to Rules, Processes and Systems
Since launch, performance issues have been improved with even better performance to come
10 to 15% of disputes prevented due to VCR process changes and edits
Allocation workflow covers a majority of volume (81%), reducing touch- points by 31%
29% in January
Overall, CNP Dispute to Sales Ratio reduced by 9.2% on count and 9.0% on amount
10.3 in January on count
55% faster resolution for cases on all sides
Visa Confidential

13. Payments Ed Forum Visa Merchant Purchase Inquiry (VMPI)
Richard Stopic
Global Dispute Products and Back Office Solutions

14. Transaction recognition
Background
Consumer complaints that lead to disputed transactions cause significant overhead and cost for all participants in the payment chain
Dispute volume rising
Cost to process
Transaction recognition
20–30% rise year over year, digital goods the primary culprit
Low dollar, high volume disputes incur same costs as high dollar disputes
(Estimated at US$25–$60)
Many disputes are the simple issue of “recognizing” the purchase

15. Visa Merchant Purchase Inquiry – VMPI
RESOLVE ONLINE 1
Real Time Inquiry 4 3 2
Call Centre
Visa Merchant
Purchase Inquiry
Transaction Inquiry
Real Time Response 5
Steps:
Cardholder contacts the Call Center
Representative conducts a VROL-Transaction Inquiry
VROL Recognizes Merchant (as Integrated) and generates a Real-Time Purchase Inquiry to the merchant via an API – Using the original transaction information
Merchant renders the response within the established schema
Response is provided to the Issuer user, intercepting the potential dispute 1 2 3 4 5
More information, contact
Visa Confidential