It’s happened to me. Chances are it’s happened to you. And it just happened to a close friend: card fraud. After reviewing her monthly statement, she saw transactions from the strangest vendors. She felt victimized and even humiliated to even verbalize the names of the merchants. She couldn’t figure out how this had happened and immediately contacted her credit card provider to begin the dispute process. The entire process took months to address and three new cards until everything was sorted. What a waste of time for her and her bank. By the time it was done, she had threatened to cancel her card twice.
Disputing a credit card transaction is a complicated process for both the cardholder and the credit card company. I wrote about this back when the Target data breach first made news. From the cardholders’ perspective, it is a frustrating, time-consuming and challenging process. From the credit-card issuer’s standpoint, disputes often result in high operational costs. A poor customer experience during this sensitive “Moment of Truth” can negatively impact customer satisfaction. Additionally, the byzantine rules that banks have to follow for networks and government regulations can increase their loss risk if claims are not handled properly.
According to Aite Group, the total dollar value of payment cards is estimated at approximately $8 trillion worldwide, with a conservative chargeback percentage of .05 percent, or approximately $40 billion1. At a time when reducing operational costs and increasing customer loyalty are top of mind, the recently announced joint Verifi and Pegasystems partnership is one that addresses both issues – enabling credit and debit card issuers to dramatically reduce resolution times and risks on disputes.
This solution will not only better automate the way banks manage chargebacks, but also disintermediate some of the more tedious processes. By directly connecting banks and merchants, the chargeback is avoided, in many cases thereby eliminating the potential for a back and forth “tennis match” between parties involved in the transaction. This reduces the inherent inefficiencies for banks handling claims while helping their cardholders get a faster resolution to the merchant related issues.
Thanks to Verifi and Pega, these unfortunate situations can now be handled with less frustration, and result in speedy resolutions, lower operational costs, fewer losses, improved customer experiences and higher customer satisfaction rates.
This can’t change what happened to my close friend, but we know that our new partnership can help to avert negative experiences like this for all stakeholders.
 Aite Group Research, April 2015