How Will Visa Claims Resolution (VCR) Impact Your Business?

  • Max Jones
  • March 4, 2018
  • 5 minutes

Visa Claims Resolution (VCR) will drastically change the way your business manages chargebacks and disputes. If you take action now, your business could see a significant reduction in disputes and a massive increase in ROI.

But if you fail to act, VCR could cause irreparable damage to your bottom line.

What is VCR?

Visa recognizes that the payments industry is dynamic. New technologies and processes are developed to address constantly emerging challenges. In an attempt to likewise adapt to industry changes, the card network has devised a more modern strategy for managing chargebacks.

The Visa Claims Resolution (VCR) initiative is a simplified, streamlined, cost-effective process for chargeback and dispute resolution.

 to answer a few questions and learn how VCR can impact your business.

What Changes Can You Expect with VCR?

VCR is a complete overhaul of the dispute process. As such, it will radically change the way issuers, acquirers, and merchants interact.

Updates will primarily impact four key components: dispute response styles, terminology, timelines, and reason codes.


Disputes will follow either the allocation or collaboration workflow. Read More >>


Visa is phasing out certain words and introducing new terms. Read More >>


Resolution time frames will be shortened.


New codes with new classifications will be introduced. Read More >>

How Will VCR Impact Your Business?

VCR will likely impact your business in several ways. However, that impact doesn’t necessarily need to be detrimental. Here’s what you can expect and how to prepare.

  Challenge: You Could Be Held Liable

Visa anticipates as many as 60-80% of chargebacks will be handled with the allocation dispute management style.

Allocation dispute outcomes will be determined by CVV2, AVS and 3D Secure responses. If you don’t use these tools, you may be found liable and lose the ability to challenge the dispute.

  Solution: Use Fraud Prevention Tools

Check with your processor about adding CVV2, AVS, and 3D Secure to your pre-authorization fraud screening.

Not only can these tools help stop fraudulent transactions from being processed, they can also serve as a key piece of compelling evidence for allocation disputes.

 Challenge: You Might Breach Fraud-to-Sales Thresholds

Like your chargeback-to-transaction ratio, card networks also monitor your fraud-to-sales ratio. With new VCR updates, the risk of breaching fraud-to-sales thresholds increases significantly.

Visa is retiring the “unrecognized” reason code (number 75)—a reason code that wasn’t previously considered fraud. Now, those unrecognized disputes will likely be funneled into the fraud dispute category–an action that will impact the fraud-to-sales ratio.

If you currently receive a significant amount of reason code 75 chargebacks, you can expect your fraud-to-sales ratio to increase once VCR takes effect.

  Solution: Be Proactive

Don’t wait for your fraud-to-sales ratio to spike. Take action now to mitigate risk.

  • Use dispute resolution tools. Add VMPI and/or other issuer-to-merchant collaboration networks to resolve cases before they progress to disputes.
  • Update your billing descriptor. Use words and phrases cardholders will recognize. Consider adding your phone number or website to your billing descriptor so the customer can contact you—and not the issuer—if there are problems.
  • Improve the customer experience. Make sure the customer service department is answering emails promptly and phone call wait-times are short.
  • Issue refunds promptly. And, properly document action taken in your CRM.
  • Upgrade pre-transaction fraud screening. If genuine fraud is a concern for your business, take steps to reduce your exposure now (these tools can help). You won’t be able to sustain high levels of legitimate fraud and friendly fraud.
  • Monitor your fraud-to-sales ratio. Take preemptive action to prevent breaches.

  Challenge: You Could Refund…and Receive a Dispute

The VCR initiative is designed to weed out invalid cases—like disputes initiated after a refund has been issued. However, the process is subject to error.

It is possible to refund a transaction and still get a dispute.

  Solution: Take Quick and Accurate Action

When a cardholder initiates a dispute, the first thing the issuer will do is consult Visa Resolve Online (VROL) to conduct a transaction inquiry. The transaction inquiry will return pertinent transaction data that will help the issuer determine how to proceed.

For example, if the transaction inquiry reveals a credit has already been issued, the dispute will be closed.

Therefore, it is imperative that you issue refunds promptly so the action will be noted in VROL when the issuer checks.

  Challenge: You Won’t Have Time to Respond

It has always been challenging for merchants to create and submit dispute responses on time. A lot of revenue is forfeited simply because cases expire without action.

Unfortunately, the task will be even more arduous with VCR. Within the 30-day VCR time frame that’s allotted for a dispute response, a merchant maybe have up to 18 days.

Moreover, with VCR, you won’t be allowed to simply let disputes expire. You must respond to at least accept liability—or suffer the consequences. This could mean you’ll be assessed additional fees or your index score will be negatively impacted.

  Solution: Organize and Automate

Before VCR takes effect, get your transaction data organized. Make sure you are collecting all necessary compelling evidence and that you can easily access it.

You should also consider switching from a manual response process to an automated response process. Automation can respond to disputes well within the allotted time frame, meaning you never have to worry about cases expiring or needlessly sacrificing revenue. Technology can also easily compile compelling evidence that is customized by reason code. This gives you the best possible chance of winning more disputes, thus increasing your overall ROI.

Visa plans to further shorten the dispute response time frame to 20 days within the next year—meaning merchants may have up to 12 days to respond. At that point, your processes will need to be automated and scalable. You may as well make the transition now!

If you needed any more encouragement, Visa provides financial compensation to merchants who respond quickly. The faster you respond, the less you pay in fees. The longer it takes, the more you’ll be charged.

Midigator® automation is compliant with VCR. If you’d like to see how the technology can streamline and simplify VCR requirements, 

  Challenge: A Lot of Effort is Required to Experience Benefits

Visa Merchant Purchase Inquiry (VMPI) and other issuer-to-merchant collaboration networks have the potential to significantly reduce the number of disputes you sustain, thus improving your dispute-to-transaction ratio and keeping your merchant accounts healthy.

While Visa has identified the following merchants as ideal candidates for VMPI, any card-not-present merchant would benefit from VMPI:

  • Merchants who receive high volumes of disputes categorized as unrecognized transaction or fraud
  • Merchants with vague descriptors
  • Merchants processing transactions with low dollar amounts
  • Merchants who sell digital goods
  • Merchants who sell products using negative option billing or trial offers

However, in order to benefit from these dispute-resolution tools, you’ll need multiple integrations. And, to successfully resolve disputes with VMPI, you’ll need to relay transaction data in two seconds or less. Are your current systems and processes up to the task?

  Solution: Streamline VMPI Requirements With a Single Integration

If you are unsure if your current setup can comply with VMPI requirements, contact Midigator for a free consultation. Midigator, a Visa facilitator that also supports other issuer-to-merchant networks, can integrate on your behalf.

  • Complete VMPI management—relaying data, refunding applicable transactions, noting action in CRM, cancelling future transactions, blacklisting customers, and cancelling shipment when applicable
  • In-depth data analytics for VMPI activity
  • VMPI management from the same portal as prevent alert management and VCR-compliant dispute responses

  Challenge: It Will Cost More–Not Less

Visa created VCR as a technological solution to a modern challenge. This is just one of many ways the payments industry is morphing into an efficient, tech-driven, data-oriented era.

Unfortunately, manual processes no longer have a place in this advanced environment. If you want to experience all the benefits Visa has intended, you must likewise embrace technology.

If you remain dependent on manual processes, VCR could actually increase costs rather than decrease them. You’ll need more skilled laborers to duplicate what technology can do seamlessly.

  Solution: Trust Technology

Fortunately, the transition from manual labor to advanced technology isn’t difficult. In fact, it infinitely simplifies things!

A single integration with Midigator means you are fully prepared for all Visa program updates–plus, you get so much more!

  • Unprecedented transparency and efficiency
  • Intelligent, data-driven decisions
  • Reduced labor costs
  • Unrivaled ROI

Full compliance with VCR can significantly improve your business’s bottom line. 

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