How Real-time Resolution Helps Digital Subscription Merchants

Sydney VaccaroDigital GoodsLeave a Comment

How Real-time Resolution Helps Digital Subscription Merchants
Real-time Resolution enables real-time communication of customer, order, and product detail directly to the issuer. This first-of-its-kind solution that catches invalid disputes at the source and prevents them from being filed.

Digital subscription billing models are amazing. This model allows merchants to have continual transactions without putting the customer through any friction or a checkout process. Everything about that model seems wonderful—until the chargebacks hit. The same frictionless checkout that makes these business model tick is susceptible to customer disputes.

But digital merchants can curb losses and stay a step ahead of disputes with Real-time Resolution. We will go over some of the challenges digital subscription merchants face when it comes to disputes and how Real-time Resolution can help.

The Digital Subscription Challenge

Digital goods and recurring billing individual are susceptible to disputes. The combination of the two can create a dispute problem for merchants.

Chargeback Fraud

Chargeback fraud is the fraudulent request for a return or refund in the form of a chargeback. The transaction is disputed by the cardholder in an attempt to regain the transaction amount while still retaining the product or services.

In the world of recurring billing, chargeback fraud can happen when a customer forgets to cancel the service and disputes the charge instead of accepting their mistake. Or the customer plans on taking the digital merchandise, selling it, and then disputing the charge to get their money back. There are many other scenarios of chargeback fraud, but overall the customer is maliciously using the dispute process for personal gain.

Friendly Fraud

Friendly fraud is an innocent act but it can still cost merchants. While closely related to chargeback fraud, friendly fraud involves no malicious intent from the cardholder. Forgetfulness or family members making unknown purchases can be the root of friendly fraud. Or something as simple as an unclear merchant descriptor can make a customer issue a dispute for a purchase they actually made.

For recurring digital payments there are plenty of situations where cardholders can accidentally commit friendly fraud. A parent’s credit card may be saved on a gaming systems store, on the marketplace for apps, or on the family computer where it could be used easily with or without permission. Leading to an unknown or forgot purchase because it was made by a family member. In other cases of forgetfulness, not recognizing a merchant descriptor or forgetting they signed up for a subscription service can lead to panic-disputed charges.

What is Real-time Resolution?

Real-time Resolution (RTR) is a first-of-its-kind solution that catches invalid disputes at the source and prevents them from being filed. RTR stops up to 30% of Visa disputes from proceeding past an inquiry.

How it Works

Real-time Resolution in the Chargeback App enables real-time communication of customer, order, and product detail directly to the issuer. This is how it works with VROL:

  1. Cardholder contacts their card issuer and is connected to a Dispute Analyst.
  2. Dispute Analyst conducts a VROL-Transaction Inquiry.
  3. VROL recognizes the merchant as a Chargeback client and generates a RTR Inquiry.
  4. The Chargeback App renders a response containing customer, order, product and related detail within seconds. Or, the response can include a customer credit notification (refund) in cases where merchants wish to credit the cardholder prior to receiving a chargeback. This prevents the dispute from being filed.
  5. Response detail is provided to the cardholder by the Dispute Analyst.

How Real-time Resolution Helps Merchants

There are plenty of scenarios, malicious and not, that customers may dispute a recurring digital transaction. With RTR merchants can help prevent chargeback fraud and friendly fraud from ever happening with live communication.

Preventing Chargeback Fraud

With Real-time Resolution, the dispute analyst can use transaction details to decide if the dispute is invalid and prevent it from being filed. In cases where the cardholder is trying to intentionally misuse their chargeback rights, the extra layer of confirmation acts as a critical deterrent from proceeding with the dispute.

Resolve Disputes

Resolve disputes without affecting customer relationships by providing comprehensive details directly to issuers that help validate legitimate transactions. This line of communication not only helps prevent disputes but also enables your team to swiftly issue refunds and blacklist fraudulent customers.

Help Things “Click”

In cases of friendly fraud, providing enhanced order information directly to issuers helps your customers identify and understand transactions. This level of detail isn’t typically available until after a dispute is filed (and after its already done it’s damage in fees and losses). Address and prevent the most common disputes seen by subscription merchants.

Digital subscription billing models are amazing. This model allows merchants to have continual transactions without putting the customer through any friction or a checkout process. Everything about that model seems wonderful—until the chargebacks hit. The same frictionless checkout that makes these business model tick is susceptible to customer disputes.

But digital merchants can curb losses and stay a step ahead of disputes with Real-time Resolution. We will go over some of the challenges digital subscription merchants face when it comes to disputes and how Real-time Resolution can help.

The Digital Subscription Challenge

Digital goods and recurring billing individual are susceptible to disputes. The combination of the two can create a dispute problem for merchants.

Chargeback Fraud

Chargeback fraud is the fraudulent request for a return or refund in the form of a chargeback. The transaction is disputed by the cardholder in an attempt to regain the transaction amount while still retaining the product or services.

In the world of recurring billing, chargeback fraud can happen when a customer forgets to cancel the service and disputes the charge instead of accepting their mistake. Or the customer plans on taking the digital merchandise, selling it, and then disputing the charge to get their money back. There are many other scenarios of chargeback fraud, but overall the customer is maliciously using the dispute process for personal gain.

Friendly Fraud

Friendly fraud is an innocent act but it can still cost merchants. While closely related to chargeback fraud, friendly fraud involves no malicious intent from the cardholder. Forgetfulness or family members making unknown purchases can be the root of friendly fraud. Or something as simple as an unclear merchant descriptor can make a customer issue a dispute for a purchase they actually made.

For recurring digital payments there are plenty of situations where cardholders can accidentally commit friendly fraud. A parent’s credit card may be saved on a gaming systems store, on the marketplace for apps, or on the family computer where it could be used easily with or without permission. Leading to an unknown or forgot purchase because it was made by a family member. In other cases of forgetfulness, not recognizing a merchant descriptor or forgetting they signed up for a subscription service can lead to panic-disputed charges.

What is Real-time Resolution?

Real-time Resolution (RTR) is a first-of-its-kind solution that catches invalid disputes at the source and prevents them from being filed. RTR stops up to 30% of Visa disputes from proceeding past an inquiry.

How it Works

Real-time Resolution in the Chargeback App enables real-time communication of customer, order, and product detail directly to the issuer. This is how it works with VROL:

  1. Cardholder contacts their card issuer and is connected to a Dispute Analyst.
  2. Dispute Analyst conducts a VROL-Transaction Inquiry.
  3. VROL recognizes the merchant as a Chargeback client and generates a RTR Inquiry.
  4. The Chargeback App renders a response containing customer, order, product and related detail within seconds. Or, the response can include a customer credit notification (refund) in cases where merchants wish to credit the cardholder prior to receiving a chargeback. This prevents the dispute from being filed.
  5. Response detail is provided to the cardholder by the Dispute Analyst.

How Real-time Resolution Helps Merchants

There are plenty of scenarios, malicious and not, that customers may dispute a recurring digital transaction. With RTR merchants can help prevent chargeback fraud and friendly fraud from ever happening with live communication.

Preventing Chargeback Fraud

With Real-time Resolution, the dispute analyst can use transaction details to decide if the dispute is invalid and prevent it from being filed. In cases where the cardholder is trying to intentionally misuse their chargeback rights, the extra layer of confirmation acts as a critical deterrent from proceeding with the dispute.

Resolve Disputes

Resolve disputes without affecting customer relationships by providing comprehensive details directly to issuers that help validate legitimate transactions. This line of communication not only helps prevent disputes but also enables your team to swiftly issue refunds and blacklist fraudulent customers.

Help Things “Click”

In cases of friendly fraud, providing enhanced order information directly to issuers helps your customers identify and understand transactions. This level of detail isn’t typically available until after a dispute is filed (and after its already done it’s damage in fees and losses). Address and prevent the most common disputes seen by subscription merchants.

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