Verifi Reveals that Nearly $31 Billion Is Lost Yearly to Transaction Disputes, which May Be Reduced via “Proactive Management”

Lost in Space RobotLos Angeles based Verifi, a company that claims it has been leading the dispute management and payment protection sector for sellers and issuers since 2005, notes that in October 2019, Visa had acquired Verifi.

The Verifi team points out that since the very first day, the companies have been looking for ways to “prevent or resolve disputes quickly.” Since then, they’ve made “tremendous strides” integrating their solutions with Visa’s infrastructure and have “co-developed a revolutionary product, Rapid Dispute Resolution (RDR) – the first fully automated dispute management solution.”

As explained in a blog post by Verifi, this is “significant because much of the cost of disputes is in the operational time it takes to manually process and resolve a dispute or represent a chargeback.”

Verifi reveals that it has been estimated that almost $31 billion is lost each year to disputes, which may be “reduced through proactive management” of a new dispute category they are introducing called “pre-disputes.”

As explained by Verifi, pre-disputes exist “in the period before a simple cardholder inquiry escalates to a chargeback.” They explain that we might “recognize the dispute system has been skewed towards the cardholder since inception, and today Visa and Verifi are working to change that.”

Verifi notes that, at first, they “leveraged opportunities” with their original Chargeback Representment service and Cardholder Dispute Resolution Network (CDRN). However, when they combine their pre-dispute solutions, PREVENT and RESOLVE, with Visa’s risk and fraud management solutions, they are able to create “something greater.”

Verifi claims that their “combined technologies foster brand-agnostic collaboration among all stakeholders, delivering dispute management solutions that are intelligent, data-driven, and customer-centric.”

The Verifi team further noted:

“Visa has expertise in acquirer and issuer solutions, global payments coverage, and has made significant inroads with the deployment of the Visa Merchant Purchase Inquiry (VMPI), which has been renamed as Verifi’s Order Insight® (PREVENT). Verifi has strong relationships with sellers and issuers, payments protection coverage in North America and Europe, and had already gained ground with dispute solutions CDRN and Order Insight.”

Verifi also mentioned that by bringing together these strengths, they are beginning to transform or reinvent the dispute space with a complete suite of Total Dispute Management solutions, offering data transparency, automation, efficiency, and recovery of funds that would otherwise be lost to disputes (chargebacks).

Verifi further explains that their goal is to “stop chargebacks at the pre-dispute stage, redefining the system.”

The company notes that its focus moving forward will be “to introduce, expand, and innovate pre-dispute management.” Verifi also mentioned that preventing or resolving disputes before they are actually submitted to card brands as a “traditional chargeback” can save a lot of time, expenses, and “protect the seller’s dispute ratio.”

As explained by Verifi:

“In the usual chargeback flow, after the dispute is submitted to Visa Resolve Online (VROL), a lengthy process begins by sending the dispute to the seller through the acquirer. This puts operational and financial burdens on all stakeholders involved, with constant communication between seller, acquirer, and issuing entities – all in a very compressed timeframe. Sellers must create compelling evidence cases. Acquirer teams must process paperwork for sellers to fight the dispute. All this work mounts up just to provide issuers with more information about a transaction. Then issuers must staff back-office teams to intake and review this compelling evidence and decide the outcome of the dispute. It’s quite apparent that simple, clear communication has been lacking in this process for some time.”

But with their improvements to the dispute process, Visa was able to reduce the average time frame for dispute resolution “from 55 days to 24 days.” Since teaming up with Visa, Verifi has created Rapid Dispute Resolution to address a pre-dispute a lot faster (in one second).

By combining Visa and Verifi’s experience and expertise, they are improving the dispute space, “creating dispute management solutions that empower greater levels of transparency, efficiency, automation, cost savings, and revenue retention for partners worldwide.”

As noted by Verifi:

“The PREVENT solution is powered by Order Insight and enables sellers to share data with issuers in real time, while the cardholder is on the phone with an inquiry. For issuers, it reduces call center time, provides greater transparency for their cardholders, and delivers stickier solutions on all the main cardholder touch points.”

Verifi concludes:

“Payments continue to change and are evolving faster all the time. Consumer behavior is also changing, as more consumers are shopping online and paying with digital wallets. Disputes remain a key component of payments, and successful management of them requires trust and transparency when things go wrong. So, continuing to evolve the dispute process is vital – and Visa and Verifi are committed to doing just that.”

(Note: to learn more about these products and solutions, check here.)

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