December 5, 2017
[Editor’s Note: December is Chargebacks Month on CardNotPresent.com. Chargebacks are an ever-present headache for digital merchants. Rules set by the card networks to govern them are complicated and favor consumers and issuers, often leaving merchants feeling frustrated. Check back here throughout the month for updated content aimed at helping merchants understand, manage and respond to chargebacks.]
2017 is drawing to a close; that means it’s time for planning to come to an end and for the real action to begin. We’re just a matter of weeks from implementation of several major policy changes, and these rule revisions will cost you dearly if you’re not ready.
Two policy updates in particular—the GDRP and the PSD2—should be at the top of your list of concerns going into 2018.
Payment Services Directive, Take Two
We’re promised a world of improved security, maintained with evolving payment initiatives, as of January 13, 2018. Although version two of the Payment Services Directive standard is geared toward unifying and securing the payments market in Europe, the rest of the world should expect changes as well.
New, innovative payment services enabled by PSD2 are a gift for consumers; the reform will disrupt everything we know about how customer data becomes available to third parties. The new transparent exchange of information will be a big change from the traditional holding data, opening the door to new FinTech competitors.
For EU businesses, the presents under the PSD2 tree include a boost to productivity and a more loyal and confident customer base. Shoppers, likewise, will appreciate new technologies and capabilities tuned to their needs. Businesses in the US, however, will not be so lucky.
Increased regulatory control of transactions within Europe risk turning the continent into a walled garden for e-commerce. Authentication, tokenization, and fraud detection are all on the horizon, along with efforts to keep customer information and data access up-to-date.
There’s always a need for dispute settlement whenever buyers and sellers transact. The architects of PSD2 hope real-time bank transfers will make chargebacks and friendly fraud a thing of the past, but remember: holiday Grinches are always afoot. Rather than disappear, we can expect chargebacks and friendly fraud to simply take on another guise as new breeds of fraud evolve.
Ghosts of GDPR yet to come
Once the General Data Protection Regulation—GDPR for short—is up and running, consumers will have the power to be anonymous and have their information excluded from data sets. The so-called “right to be forgotten” means consumers will become the owners of their own data. As a result, businesses are prohibited from transferring personal data to a third party, unless the consumer gives it unambiguous consent.
Much like PSD2, the effects of GDPR will be felt around the globe overnight, as U.S. companies that transact with European citizens will be accountable for the upkeep of internal data records.
Failure to comply will mean steep penalties. After all, the GDPR threatens a fine of up to four percent of global turnover or $23 million—whichever is higher—for noncompliance. Like the PSD2, companies that trade with European customers from outside the E.U. will have a more difficult job than those trading within the continent. Global organizations need to go into the new year with separated European activities, which could take a whole team to pull off effectively.
Given the high stakes for GDPR noncompliance, it’s shocking how few merchants are familiar with the policy. Even though the time to prepare is ending, fully 80 percent of worldwide merchants know little to nothing about the new requirement.
The clock is ticking, and non-compliant merchants are jeopardizing more than just their own bottom line: they increase risk exposure for other industry members as well. Inconsistently applied standards are trouble for everyone involved.
Let’s Rap Things Up for 2017
All this talk about dense industry regulation and concerns about lost profits starting to drag you down? Not to worry—we’ve taken the opportunity to boil it down into a few quick verses:
That’s a Wrap
Chargebacks911 Holiday Rap
Christmas is here
Ringing in a new year
Some new, some old
VCR, VMPI, MCR to name a few
PSD2 and GDPR coming for the EU
… More acronym gifts
Bring challenging shifts
But don’t fret
Not just yet
We’re here to help you through
And don’t forget – that Santa is still coming for you!
These industry changes have been years in the making,
If you’re not prepared and compliant
you should be shaking.
if you know what you’re doing and ahead of the game,
You will increase your revenue
and put your competitors to shame.
Santa changed his suit from green to red,
Visa has now put Reason code 75 to bed.
Merchant Purchase Inquiry
helps to understand the true dispute,
When your Merchant description doesn’t compute.
Santa only gets 24 hours to deliver,
Visa are saying it is now 30 days not 45,
this shouldn’t make you quiver.
In fact the name Chargeback will not exist,
They will now be called Disputes, what a twist.
CB911’s vision is to work as 1 industry, start to finish,
This will help Disputes diminish.
We work with Merchants, Issuers and Acquirers too,
Chargebacks is our sole passion
and we are here for you.
From all of us at CB911, a Merry Xmas and New Year to you,
Wishing you every success for the future, in all that you do.
If you have any questions, please approach us and enquire,
We love our business, so we won’t tire.
At Chargebacks911, we operate all over the globe out of our offices based in Tampa, Europe and India. We offer businesses bespoke solutions to conquer rising chargebacks. With our unrivalled talent pool of respected industry experts, led by the Cardone duo, it’s our mission to recover lost revenue by mitigating risks and managing disputes. For more information about Chargebacks911, go to www.chargebacks911.com.
Don’t forget to grab our latest white paper, A Trident of Change in Europe, to read more about these changing regulations and how you can prepare your business to thrive in the new payments environment.