New Year, New Tools for Tackling Chargebacks

New Year, New Tools for Tackling Chargebacks

Happy New Year! Looking back, 2023 saw some important developments for the industry. Visa lowered the limit on credit card surcharges to 3%, AI continued growing fast and Mastercard published an update to its Business Risk Assessment and Mitigation (BRAM) program, affirming that you can’t publish images using someone’s likeness without their consent. Looking ahead, let’s make 2024 a banner year as well, by implementing a stellar gameplan for ensuring compliance and avoiding chargebacks. 

Utilizing the Latest Tools to Prevent Chargebacks

In the year ahead, businesses will need to continue improving how they accept credit card payments and protect transactions.

In the year ahead, businesses will need to continue improving how they accept credit card payments and protect transactions. Fortunately, there are many steps you can take to help prevent chargebacks. Those include having good billing practices, using 3-D Secure, AVS and CVV, and enacting a liberal refund policy.

Even with the above, fraudsters will still try to defraud businesses at every opportunity — and frustratingly, issuing banks tend to side with cardholders, especially against adult businesses. Yet there are tools available to alleviate these burdensome concerns, like Rapid Dispute Resolution (RDR) and Cardholder Dispute Resolution Network (CDRN) by Visa, or Ethoca Alerts by Mastercard. These tools empower merchants with resources to intercept and prevent chargebacks, and have proved especially valuable in adult and dating verticals, where such measures have dramatically reduced chargeback ratios.

How CDRN and Ethoca Alerts Can Help

CDRN and Ethoca Alerts require human intervention, but they give a business 24-72 hours to take action. If you sell a tangible product, this may afford you the time needed to cancel or divert a shipment. If you sell memberships, it gives you the opportunity to reach out to your member and ask if everything is okay. As a business, it gives you the choice to issue a refund, address a consumer complaint or investigate further, as opposed to waking up to yet another chargeback.

Tapping Into RDR Effectively

RDR, on the other hand, works exactly like a chargeback, but it doesn’t count toward your chargeback ratio. It requires no human intervention and it automatically debits the amount of the transaction from your bank account, just like a chargeback. One key feature is that you, the business owner, can create rules on how RDR cases are handled. Maybe you want to refund every case under $50 automatically, or only refund specific chargeback reason codes. There are a variety of rules that can be created to tailor RDR to your specific needs. You can turn these services off and on as it suits you.

Leveraging ‘Order Insight’ to Mitigate Chargebacks

Those of you familiar with CDRN and RDR may be asking, “What about Order Insight?” Good catch. Order Insight has been enhanced with Compelling Evidence 3.0 (CE3.0), which is specific to Visa 10.4 disputes (“fraud card-absent environment”). CE3.0 provides transaction information directly to issuing banks to identify and block misuse of the chargeback system, thereby helping keep your chargeback ratios down.

I know this is a lot to unpack — especially since most of you are probably still working on returning all the phone calls and emails that came between Christmas and New Year’s, not to mention following through on that resolution to get back on your Peloton bike. But the good news is, if you leverage these modern tools, you can dodge potential issues and set yourself up for a successful 2024 and beyond.

Jonathan Corona has two decades of experience in the electronic payments processing industry. As chief operating officer of MobiusPay, Corona is primarily responsible for day-to-day operations as well as reviewing and advising merchants on a multitude of compliance standards mandated by the card associations, including, but not limited to, maintaining a working knowledge of BRAM guidelines and chargeback compliance rules defined in both Visa and Mastercard operating regulations.


Copyright © 2024 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More Articles


The Search for Perfection in Your Payments Page

There has been a lot of talk about changes to cross sales and checkout pages. You have likely noticed that acquirers are now actively pushing back on allowing merchants to offer a negative option, upsell or any cross sales on payment pages.

Cathy Beardsley ·

Unpacking the Payment Card Industry's Latest Data Security Standard

The Payment Card Industry Data Security Standard (PCI DSS) is a set of requirements and guidelines that apply to all businesses that accept credit card payments, and is designed to ensure the security of those transactions.

Jonathan Corona ·

Compliance With State Age Verification Laws

During the past year, website operators have faced a slew of new state age verification laws entailing a variety of inconsistent compliance obligations.

Lawrence Walters ·

Merchants in Spotlight With Visa's VIRP

By now, most merchants know about the Visa Integrity Risk Program (VIRP) rolled out in spring 2023. The program is designed to ensure that acquirers and their designated agents — payment facilitators, independent sales organizations and wallets — maintain proper controls and oversight to prevent illegal transactions from entering the Visa payment system.

Cathy Beardsley ·

How to Know When Hosting Upgrades Are Really Needed

I was reminded about an annoyingly common experience that often frustrates website owners: upgrades. Sometimes, an upgrade of physical system resources like CPU, RAM or storage really is required to solve a problem or improve performance… but how do you know you’re not just being upsold?

Brad Mitchell ·

WIA Profile: Natasha Inamorata

Natasha Inamorata was just a kid when she first picked up a disposable camera. She quickly became enamored with it and continued to shoot with whatever equipment she could afford. In her teens, she saved enough money to purchase a digital Canon ELPH, began taking portraits of her friends, shot an entire wedding on a point-and-shoot camera and edited the photos with Picnik.

Women in Adult ·

Collab Nation: Top Creators Share Best Practices for Fruitful Co-Shoots

One of the fastest ways for creators to gain new subscribers and buyers, not to mention monetize their existing fan base, is to collaborate with other creators. The extra star power can multiply potential earnings, broaden brand reach and boost a creator’s reputation in the community.

Alejandro Freixes ·

Bridging Generational Divides in Payment Preferences

While Baby Boomers and Gen Xers tend to be most comfortable with the traditional payment methods to which they are accustomed, like cash and credit cards, the younger cohorts — Millennials and Gen Z — have veered sharply toward digital-first payment solutions.

Jonathan Corona ·

Legal and Business Safety for Creators at Trade Shows

As I write this, I am preparing to attend XBIZ Miami, which reminds me of attending my first trade show 20 years ago. Since then, I have met thousands of people from all over the world who were doing business — or seeking to do business — in the adult industry.

Corey D. Silverstein ·

Adding AI to Your Company's Tech Toolbox

Artificial intelligence is all the rage. Not only is AI all over the headlines, it is also top of mind for many company leadership teams, who find themselves asking, “How can this new tool help our company?”

Cathy Beardsley ·
Show More