News, Education and Events Decoding Digital Payments & Fraud

News, Education and Events Decoding Digital Payments & Fraud

Verifi Expands Chargeback Protection, Offers Guarantee – Sept. 25, 2014

Verifi Expands Chargeback Protection, Offers Guarantee

Sept. 25, 2014

Verifi Expands Chargeback Protection, Offers Guarantee Chargeback prevention technology provider Verifi this week announced a major expansion of the network of banks and merchants the company leverages to identify and resolve chargebacks. Heading into the holiday season for retailers, Los Angeles-based Verifi said its Cardholder Dispute Resolution Network (CDRN) now covers 21 percent more credit cards and 50 percent more debit cards than it did at this time last year. Verifi also announced an initiative guaranteeing that if a dispute goes through the CDRN process and is successfully resolved but is still filed as a chargeback, it will refund chargeback fees to the merchant.

The company, which partners with card issuers to identify disputes before they actually become chargebacks, giving merchants the opportunity to resolve the dispute without paying the fees associated with them, said the expansion of its CDRN has been driven by greater acceptance on both the merchant and issuer side, according to CEO Matthew Katz. A 200 percent increase in merchant adoption since last year has been driven by the introduction of a cloud-based portal, which merchants can choose to connect to the CDRN instead of the more traditional API or batch methods requiring heavier IT integration. And, Katz told, while they assumed it would be smaller merchants using the portal, they have found larger merchants testing the service online before they commit to integrating using the API.

“We can now support merchants of any size,” Katz said. “All of our merchants historically were medium to very large merchants so we figured the portal would attract only smaller merchants. To our surprise, the biggest card-not-present merchant in the world came to us and said they would use the portal first to test the efficacy of the solution and if they were happy, they would dedicate the development resources [to integrating through the API], which they have.”

In addition to a big bump in the number of merchants using CDRN, Katz also said Verifi has had more issuers go live in 2014 than in any other year. And, by virtue of having both merchants and issuers participating in the CDRN, Verifi boasts a closed system that enables the “zero defect” guarantee.

“When we get a dispute from the issuer, by contract we have to go back to the issuer with a resolution,” he said. “Because we’re closed-loop with the issuer, we don’t have a false positive rate. If you get a dispute and don’t take action you know it’s going to be charged back. The guarantee just says if you take action on a dispute through CDRN and for some reason (something with the issuer’s system, a timing issue, whatever) which is seldom, and somehow it still gets processed as a chargeback: money back guarantee.”

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Daniel Leibovitch