Visa Claims

Resolution manual

Date: 2/15/18

Simon Carmiggeltstraat 6-50

1011 DJ Amsterdam
The Netherlands

Page 1 | © 2018 Adyen BV

www.adyen.com
Introduction ................................................................................................................. 3
1.1 VCR ................................................................................................................................................................................ 3
1.2 The main changes .......................................................................................................................................................... 3
1.2.1 Different workflows ...................................................................................................................................................... 3
1.2.1.1 Allocation .................................................................................................................................................................. 3
1.2.2 Chargeback threshold ................................................................................................................................................. 4
1.3 Collaboration .................................................................................................................................................................. 4
1.4 New VCR reason codes ................................................................................................................................................. 4
1.5 Request for Information (RFI) ......................................................................................................................................... 5

Allocation ..................................................................................................................... 6
2.1 Pre-arbitration and Arbitration ........................................................................................................................................ 6
2.2 Arbitration ....................................................................................................................................................................... 6
2.2 Compelling evidence Allocation workflow ...................................................................................................................... 6
2.2.1 Compelling evidence fraudulent disputes .................................................................................................................... 6

Collaboration ............................................................................................................... 9
3.1 Compelling evidence Collaboration workflow ................................................................................................................. 9
3.1.2 Compelling evidence Consumer Disputes ................................................................................................................ 10
3.1.3 Compelling evidence processing errors .................................................................................................................... 11

Page 2 | © 2018 Adyen BV

Introduction
This document is intended as a guideline for merchants in understanding Visa Claims Resolution (VCR).

1.1 VCR
Visa has announced a new global dispute resolution process, called VCR. This new process is introduced in order to
improve the efficiency of handling chargebacks. It is designed to have chargebacks resolved faster and easier with
system edits that will prevent invalid disputes from entering the system.

VCR will go live in Hong Kong and New Zealand end of October 2017. Incoming domestic disputes in these countries
and disputes between the two countries will use the VCR dispute process.

Remaining countries will migrate as of April 2018. All incoming disputes after this date will be processed with VCR.

1.2 The main changes

The existing 22 chargeback reason codes will be replaced by new reason codes and grouped into 4 categories:

Fraud Authorization Processing Error Consumer Disputes

1.2.1 Different workflows

Disputes will be routed in two different workflows, called Allocation and Collaboration.

Fraud Authorization Allocation

Processing Error Consumer Disputes Collaboration

1.2.1.1 Allocation
Fraud and Authorization related chargebacks will be processed through an automated workflow. For disputes in this
category, Visa will perform (automated) checks and reject invalid disputes. For example, disputes on refunded
transactions and chargebacks submitted after the required timeframes.

If the chargeback is valid, Visa will automatically assign liability to the merchant and defending the dispute will be allowed
if the merchant can provide compelling evidence that meets the criteria as defined in Table 3 Compelling Evidence Fraud
(page 10).

For disputes in the Allocation workflow, Adyen will book the chargeback, debit the merchant account and for disputes in
New Zealand and Hong Kong no option will be available to upload documents in the Adyen Customer Area (CA). Adyen
is implementing the document upload feature and it will be enabled with the release date for remaining countries, which
is April 2018.

For disputes in Hong Kong and New Zealand, Adyen requires merchants to email the defense material for VCR disputes
to our Risk Team on apacrisk@adyen.com within 18 days of the chargeback date. The team will investigate the case
and advice whether to proceed with Pre-Arbitration. Please be informed that if the requirements of compelling evidence
are not met, the documents will be rejected after review and further action will only be taken if the merchant can provide
the required information.

If the documents are valid, the Risk Team will initiate a Pre-Arbitration request and forward the case to cardholder’s
bank. The bank has 30 days to respond by either accepting or declining the case. If they accept the case, the merchant
account is credited the chargeback amount (chargeback reversed) and the dispute cycle has ended.

Page 3 | © 2018 Adyen BV

If the Pre-Arbitration is declined, merchant will be notified accordingly in the Adyen Customer Area and the dispute can
be considered lost. If the merchant does not agree with this outcome, they can reach out to their local Risk Team to
discuss the case.

Merchant should familiarize themselves with the VCR dispute criteria and update defense material to meet the mentioned
requirements.

For detailed explanation of the Allocation workflow, please review the Allocation chapter on page 6.

1.2.2 Chargeback threshold

Visa will only allow maximum 35 fraudulent chargebacks on the same card, exercised within a timeframe of 120 days for
Card Not Present (E-Commerce) transactions.

1.2.3 Removed chargeback rights for CVV2 mismatch transactions

As of 14 April 2018, Visa will block chargebacks with a fraudulent reason code (VCR reason code 10.4) for card-absent
(e-commerce) transactions if the issuing bank approved the transaction with a Card Verification Value 2 (CVV2)
mismatch. Visa encourages merchants to use CVV2 as part of their layered approach to fraud prevention.

1.3 Collaboration
Processing Errors and Consumer Disputes will be forwarded to this workflow, where the dispute defense process will
remain the same as it is today. The only difference is the representment timeframe and the reason code change.
Currently, the merchant has 45 days to defend chargebacks. For Collaboration disputes, Visa has reduced the
representment timeframe to 30 days.

Please be informed that the timeframe for the document upload in the Adyen Customer Area is 18 days.

1.4 New VCR reason codes

Reason codes will be renamed. Please find below the changes.

Table 1: Current dispute reason codes

Fraud Authorization Processing Errors Consumer Disputes

62 (Counterfeit 70 (Card Recovery Bulletin 74 (Late Presentment) 30 (Services Not

Transaction) or Exception File) Provided)
76 (Incorrect Currency or
81 (Fraud – Card 71 (Decline Authorization) Transaction Code) 41 (Cancelled
Present) Recurring
72 (No Authorization) 77 (Non-Matching Account Number) Transaction)
83 (Fraud – Card
Absent) 73 (Expired Card) 80 (Incorrect Transaction Amount or 53 (Not As Described
Number) or Defective
93 (Merchant Fraud 78 (Service Code Violation) Merchandise)
Performance) 82 (Duplicate Processing)
85 (Credit Not
86 (Paid by Other Means) Processed)

90 (Non-Receipt of
Cash or Load
Transaction Value)

Page 4 | © 2018 Adyen BV

Table 2: New VCR dispute reason codes
Note: Chargeback reason code 75 ‘Transaction not Recognized’ is being retired.

Fraud Authorization Processing Errors Consumer Disputes

10.1 – EMV Liability 11.1 – Card Recovery 12.1 – Late Presentment 13.1 – Merchandise/
Shift Counterfeit Bulletin Services Not
Fraud 12.2 – Incorrect Transaction Received
11.2 – Declined Code
10.2 – EMV Liability Authorization 13.2 – Cancelled
Shift Non-Counterfeit 12.3 – Incorrect Currency Recurring
Fraud 11.3 – No Authorization
12.4 – Incorrect Account Number 13.3 – Not as
10.3 – Other Fraud- Described or
Card Present 12.5 – Incorrect Amount Defective
Environment Merchandise/
12.6 – Duplicate Processing/ Services
10.4 – Other Fraud- Paid by Other Means
Card Absent 13.4 – Counterfeit
Environment 12.7 – Invalid Data Merchandise

10.5 – Visa Fraud 13.5 –

Monitoring Program Misrepresentation

13.6 – Credit Not

Processed

13.7 – Cancelled
Merchandise/Services

13.8 – Original Credit

Transaction Not
Accepted

13.9 – Non-Receipt of
Cash or Load
Transaction Value

1.5 Request for Information (RFI)

RFI requests remain unchanged and the merchant will continue to have 30 days to respond.
In the Adyen Customer Area the timeframe to upload documents to defend RFI requests is 24 days.

Page 5 | © 2018 Adyen BV

Allocation
If the issuing bank selects the Fraud and Authorization chargeback category, Visa will identify and block invalid disputes
that do not meet the criteria of this flow. For example, fraudulent disputes on 3D secure authorized transactions,
chargebacks exercised after the required timeframes, chargebacks on refunded transactions etc.
This will result in less invalid chargebacks.

If the chargeback is valid, Visa will assign liability to the merchant. Please be informed that the (automated) decision of
Visa is based on data in the authorization and clearing logs, plus the information that is provided by the bank together
with the chargeback. Visa system rules will compare this information against the Visa rules.

Merchants are informed that dispute defense requirements are much stricter for VCR. In the past, merchants were
allowed to upload screenshots of their internal systems without any proof of delivery. For VCR disputes, such evidence
will be rejected.

For Fraud and Authorization chargebacks the document upload in the CA will not be enabled for Hong Kong and New
Zealand. Adyen is implementing this feature and it will be enabled for the second release date of April 2018.
Merchants who receive VCR disputes as of October 2017 are advised to send the defense material to the Adyen APAC
Risk Team on apacrisk@adyen.com.

2.1 Pre-arbitration and Arbitration

After receiving the dispute defense documentation from the merchant, Adyen will initiate a Pre-Arbitration request, which
is forwarded to the issuing bank. The issuing bank will review the merchant’s defense material and has 30 days to
respond by either accepting or declining the case.

If the Pre-Arbitration is accepted, the issuer will return the funds to the merchant and the dispute cycle ends.

If the issuing bank declines the Pre-Arbitration, merchant will be notified accordingly in the Adyen Customer Area.

2.2 Arbitration
Arbitration is exercised when the merchant provided compelling evidence, but the issuer declined the Pre-Arbitration
without a valid explanation. The merchant should reach out to the local Risk Team for this action. At Arbitration case filing
stage, the case is forwarded to the chargeback comity of Visa who will review the whole case and will issue a final ruling.
The losing party will be liable for a filing fee of USD 500.

2.2 Compelling evidence Allocation workflow

For Authorization disputes, the general requirement is that if the issuing bank authorized the transaction the chargeback
is invalid. Visa will block disputes where the merchant obtained an authorization. By default, all transactions are
authorized by Adyen. If for some reason the issuing bank declines the authorization request, the merchant should not
proceed with the payment.

In any other case, the merchant should contact the Adyen Risk Team to dispute the chargeback.

2.2.1 Compelling evidence fraudulent disputes

Please review the below table for more information on document requirements for fraudulent disputes.

Page 6 | © 2018 Adyen BV

Table 3: Compelling Evidence Fraud

Compelling Evidence Fraud – Card absent Environment

Emails or photographs, to prove a link between the shopper and the Cardholder, or to prove that the
1
Cardholder is in possession of the merchandise and/or is using the merchandise or services

For an E-commerce Transaction in which the merchandise is collected from the Merchant location, any of
the following:
2 1. Cardholder signature on the pick-up form
2. Copy of identification presented by the Cardholder
3. Details of identification presented by the Cardholder

For an E-commerce Transaction in which the merchandise is delivered, documentation (proof of delivery)
3 that the item was delivered to the same physical address for which the Merchant received an AVS match
of Y or M. A signature is not required as evidence of delivery.

For digital goods downloaded from a Merchant's website or application, description of the services
successfully downloaded, the date and time such services were downloaded, and 2 or more of the
following:

1. Purchaser's IP address and the device geographical location at the date and time of the
Transaction
2. Device ID number and name of device (if available)
4 3. Purchaser's name and email address linked to the customer profile held by the Merchant
4. Evidence that the profile set up by the purchaser on the Merchant's website or application was
accessed by the purchaser and has been successfully verified by the Merchant before the
Transaction Date
5. Proof that the Merchant's website or application was accessed by the Cardholder for
merchandise or services on or after the Transaction Date
6. Evidence that the same device and Card used in the disputed Transaction were used in any
previous Transaction that was not disputed

For a Transaction in which merchandise was delivered to a business address, evidence that the
5 merchandise was delivered and that, at the time of delivery, the Cardholder was working for the company
at that address. A signature is not required as evidence of delivery.

6 For a Mail/Phone Order Transaction, a signed order form

Page 7 | © 2018 Adyen BV

 For a passenger transport Transaction, evidence that the services were provided and any of the following:

1. Proof that the ticket was received at the Cardholder’s billing address
2. Evidence that the ticket or boarding pass was scanned at the gate
7 3. Details of frequent flyer miles relating to the disputed Transaction that were earned or redeemed,
including address and telephone number, that establish a link to the Cardholder
4. Evidence of any of the following additional Transactions related to the original Transaction:
purchase of seat upgrades, payment for extra baggage, or purchases made on board the
passenger transport

For Transactions involving a Europe Member, for an Airline Transaction, evidence showing that the name
8 is included in the manifest for the departed flight and matches the name provided on the purchased
itinerary

For a Travel & Entertainment (T&E) Transaction, evidence that the services were provided and either:

1. Details of loyalty program rewards earned and/or redeemed including address and telephone
9 number that establish a link to the Cardholder
2. Evidence that an additional Transaction or Transactions related to the original Transaction, such
as the purchase of T&E service upgrades or subsequent purchases made throughout the T&E
service period, were not disputed

For an E-commerce Transaction, evidence that the Transaction used an IP address, email address,
10 physical address, and telephone number that had been used in a previous, undisputed Transaction

11 Evidence that the Transaction was completed by a member of the Cardholder's household or family

12 Evidence of one or more non-disputed payments for the same merchandise or service in the past

For a Recurring Transaction, all of the following:

13 1. Evidence of a legally binding contract held between the Merchant and the Cardholder
2. Proof the Cardholder is using the merchandise or services
3. Evidence of a previous Transaction that was not disputed

In the Europe Region, evidence that the initial Transaction to set up a wallet was completed using Verified
14 by Visa but any subsequent Transaction from the wallet that was not completed using Verified by Visa
contained all wallet-related Transaction data.

Page 8 | © 2018 Adyen BV

Collaboration
The process for the Collaboration workflow remains the same as it is today. The only difference will be the reduced
timeframe of 30 days to defend chargebacks (merchant document upload in the Adyen Customer Area is 18 days) and
the change in reason codes.

3.1 Compelling evidence Collaboration workflow

Please review the tables on the next pages for more information on document requirements for Consumer Disputes and
Processing Errors.

Table 4: Compelling Evidence Merchandise / Services not received

Compelling Evidence Merchandise/ Services not Received

Emails or photographs, to prove a link between the shopper and the Cardholder, or to prove that the
1 Cardholder disputing the Transaction is in possession of the merchandise and/or is using the merchandise
or services.

For an E-commerce Transaction in which the merchandise is collected from the Merchant location, any of
2
the following:
1. Signature of the cardholder on the pick up form
2. Copy of identification presented by the Cardholder
3. Details of identification presented by the Cardholder
4. Copy invoice

For an E-commerce Transaction in which the merchandise is delivered, documentation (proof of delivery)
3 that the item was delivered to the same physical address for which the Merchant received an AVS match
of Y or M. A signature is not required as evidence of delivery.

For digital goods downloaded from a Merchant's website or application, description of the services
successfully downloaded, the date and time such services were downloaded, and 2 or more of the
following:

1. Shoppers IP address and the device geographical location at the date and time of the Transaction
2. Device ID number and name of device (if available)
4 3. Purchaser's name and email address linked to the customer profile held by the Merchant
4. Evidence that the profile set up by the purchaser on the Merchant's website or application was
accessed by the purchaser and has been successfully verified by the Merchant before the
Transaction Date
5. Proof that the Merchant's website or application was accessed by the Cardholder for merchandise
or services on or after the Transaction Date
6. Evidence that the same device and Card used in the disputed Transaction were used in any
previous Transaction that was not disputed

For a Transaction in which merchandise was delivered to a business address, evidence that the
merchandise was delivered and that, at the time of delivery, the Cardholder was working for the company
5
at that address. A signature is not required as evidence of delivery.

6 For a Mail/Phone Order Transaction, a signed order form

Page 9 | © 2018 Adyen BV

 For a passenger transport Transaction, evidence that the services were provided and any of the following:

1. Proof that the ticket was received at the Cardholder’s billing address
2. Evidence that the ticket or boarding pass was scanned at the gate
3. Details of frequent flyer miles relating to the disputed Transaction that
7 were earned or redeemed, including address and telephone number, that establish a link to the
Cardholder
4. Evidence of any of the following additional Transactions related to that
original Transaction: purchase of seat upgrades, payment for extra
baggage, or purchases made on board the passenger transport

For Transactions involving a Europe Member, for an Airline Transaction, evidence showing that the name
8 is included in the manifest for the departed flight and matches the name provided on the purchased
itinerary

9 For a T&E Transaction, evidence that the services were provided and either:

1. Details of loyalty program rewards earned and/or redeemed including address and telephone

number that establish a link to the Cardholder
2. Evidence that an additional Transaction or Transactions related to the original Transaction, such as
the purchase of T&E service upgrades or subsequent purchases made throughout the T&E service
period, were not disputed

Evidence that the person who signed for the merchandise was authorized to sign for the Cardholder or is
10
known by the Cardholder

In the Europe Region, evidence that the Cardholder has been compensated for the value of the
11
merchandise or services through another method

3.1.2 Compelling evidence Consumer Disputes

Please review the table for more information on document requirements for Consumer Disputes.

Table 5: Compelling Evidence Consumer Disputes

Compelling Evidence Consumer Disputes

• Evidence, such as photographs or emails, to prove that the

merchandise or service matched what was described
• Documentation to prove that the cardholder did not attempt to
return the merchandise
• Evidence that returned merchandise has not been received 13.3 Not as described or
1
• Evidence that the merchant tried to repair or replace defective merchandise/ services
merchandise/ services
• Evidence the cardholder no longer accepts the chargeback
• The merchant already processed a credit to the cardholders
account
•
• Documentation to prove that the merchandise is not counterfeit
2 • A neutral third party opinion to support merchant’s position 13.4 Counterfeit merchandise
• The merchant already processed a credit to the cardholders
account

Page 10 | © 2018 Adyen BV

 • Terms and Conditions were clearly communicated to the
3 cardholder before the transaction was processed 13.5 Misrepresentation
• The merchant already processed a credit to the cardholders
account

• The cardholder no longer disputes the transaction

4 • The merchant already processed a credit to the cardholders 13.6 Credit not processed
account

• The merchant properly disclosed a Cancellation and Return

policy on the check out page of it’s website. The cardholder 13.7 Cancelled merchandise/
5
acknowledged the Cancellation and Return policy by selecting services
a tick box before checking out

3.1.3 Compelling evidence processing errors

Please review the table for more information on document requirements for Processing Errors.

Table 6: Compelling evidence processing errors

Compelling Evidence Processing Errors

• 1. The transaction receipt or other document to prove that the

1 transaction was settled within the required timeframe (not later 12.1 Late Presentment
than 180 days of the transaction date)

• Evidence that the merchant processed a credit to the 12.2 Incorrect Transaction
2
cardholder’s account Code

• Evidence that the merchant processed a credit to the

cardholder’s account
3 • The cardholder no longer disputes the transaction 12.3 Incorrect Currency
• Copy transaction receipt or other proof that the transaction
currency was correct
• Evidence that the merchant processed a credit to the
cardholder’s account
4 • The cardholder no longer disputes the transaction 12.4 Incorrect Account Number
• Copy transaction receipt or other proof that the Account
Number was processed correctly

5 • Copy transaction receipt or other proof that the transaction 12.5 Incorrect Amount
amount was correct

• Proof that the merchant processed two separate transactions

for different orders (duplicate processing). Compelling evidence 12.6 Duplicate Processing/
6 can be copy invoices of different orders
Paid by Other Means
• Documents that the merchant did not receive payment by other
means

Page 11 | © 2018 Adyen BV

 • 1. The authorization did not contain invalid data (please contact
7 Adyen Chargeback Department for more information about the 12.7 Invalid Data
authorization)

Page 12 | © 2018 Adyen BV