On 28 September, Visa, Inc. announced its new dispute process to combat first-party or “friendly fraud” in card-not-present transactions. The rule change gives merchants more options to prove that a disputed charge is valid and authorised. According to the press release, the change has the potential to save small businesses more than $1 billion over the next five years.
“Friendly fraud” refers to customers disputing legitimate transactions, getting the charges reversed and keeping the goods. The press release quotes one small business owner who claims the new process will be a “game changer” for her business. “I have been in difficult situations where legitimate membership fees have been disputed. If I lose the dispute, not only do I lose the membership fee, but I also get a fine. This can be the difference between making the payroll or not. This change will help ensure that I have a fair chance in these disputes.
The press release concludes by assuring customers that despite this change, Visa remains committed to protecting innocent consumers from fraud, including its promise of zero liability for unauthorised transactions.
