Credit Card Dispute Management: Transactions in the Billions Bring Exceptions in the Millions

  • ID: 4748209
  • Report
  • Region: Global
  • 21 Pages
  • Mercator Advisory Group
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A New Research Report on the Merits of Effective Management of Credit Card Disputes

FEATURED COMPANIES

  • American Express
  • Bank of America
  • Capital One
  • Citi
  • Ethoca
  • Fiserv
  • MORE

Trillions of dollars and billions of transactions pass through the branded network payment systems of Mastercard and Visa. A small fraction of these transactions end up as payment disputes. These flawed transactions are indications of unauthorized use, family fraud, unsatisfactory merchandise, or errant claims. Best estimates are that 4 basis points, or 4/1000ths of transaction volumes fall into this category. As we hit the next decade, expect exceptions to number nearly 25 million units.

Codified rules and network regulations protect consumers, but at a handling cost of $20–25 per unit, the cost to credit card issuers to investigate and resolve disputes exceeds $500 million. Payment networks are in the process of revamping their dispute processes, going beyond current regulations to collape resolution parameters, create efficiencies, and level the issuer-merchant playing field.

This new research report explains payment network process enhancements that go beyond the requirements of regulatory standards. It discusses what payment technology firms are doing to improve satisfaction for customers, issuers, and merchants. Readers will learn how to leverage the investment made in reconciling these accounts into a strategic advantage that can help mitigate fraud and ease the cardholder’s burden.

“Every credit card issuer requires its transactions to be irrefutable, but there will inevitably be flawed items along the way,” comments the author of the research report. “Not every customer’s complaint is right, but many times disputes can help identify fraud risk. Payment technology firms make it easier to reconcile these errant transactions. Credit card issuers must think of their dispute units as an asset, not a burden. Don’t forget, there is plenty of data in these transactions that can be used to assess risk and mitigate loss.”

Highlights of the research report include:

  • Payment development to improve the process
  • Dispute management as a strategic tool
  • Forecasted transaction number and dollars through 2022
  • Fraud losses by type
  • How top technology companies add value
READ MORE
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FEATURED COMPANIES

  • American Express
  • Bank of America
  • Capital One
  • Citi
  • Ethoca
  • Fiserv
  • MORE

Executive Summary

Introduction

  • Card Transactions Must Be Irrefutable
  • U.S. Credit Card Transactions Track to $4.72 Trillion with 68.8 Billion Units by 2022
  • Scoping Credit Card Dispute Volume: 4 Basis Points Means 24.6 Million Flaws
  • Credit Card Disputes Are an Important Business Component

Fraud Risk Management Is a Key Benefit of Dispute Management

  • Analysis by the Federal Reserve Provides Firm Data on Fraud
  • Fraud Increased Across the Card Spectrum
  • Credit Card Fraud: A $4 Billion Problem and Growing
  • Fraud Types That the Dispute Process Can Help Mitigate
  • Fraud Mitigation by Text Notification or Early Identification of a Flawed Transaction
  • Fraud Types That Can Be Reduced
  • Fraud Types That Cannot Be Reduced

Bank Card Payment Networks Take Charge

  • Mastercard and Visa Overhaul a 50-Year-Old Process
  • Visa Claims Resolution
  • Visa’s Secret Sauce for Dispute Resolution Is Better Coding
  • Mastercard Dispute Resolution
  • MasterCom: Two Service Options

Top Payment Technology Firms Are Active in Dispute Management

  • ACI Worldwide
  • FICO
  • First Data
  • Fiserv
  • TSYS

Specialty Providers Also Provide Solutions

  • Baldwin Hackett & Meeks
  • Pegasystems

What This All Means for the Credit Card Industry

References

  • Related Research
  • Endnotes
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  • American Express
  • Baldwin Hackett & Meeks
  • Bank of America
  • Barclays
  • Capital One
  • Chase
  • Citi
  • Discover
  • Ethoca
  • FICO
  • Fiserv
  • Mastercard
  • Pegasystems
  • TSYS
  • Visa
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