Recently we’ve been talking about CDRN by Verifi, a Visa owned company, and how it can help protect merchants against false and erroneous chargebacks. And you may have wondered whether Mastercard has a similar program.
They do, and it’s called Ethoca. Ethoca was a third-party fintech provider that Mastercard purchased in 2019 and it works by acting as a middle man between you and your customer, much like the Verifi equivalent, CDRN..
The way it works is that a customer calls into their issuing bank to dispute a charge on their Mastercard statement. When they make it, the bank’s customer service rep is able to look up the details about that transaction via information provided by the merchant. The details include the merchant’s name and address, date of the transaction, and whether a refund has already been given.
In many cases, a chargeback happens when a customer doesn’t recognize a particular charge on their statement because the item is just a bunch of symbols and abbreviations that don’t make sense without a cryptography program. Since they don’t know what it says, they don’t remember the purchase. Or someone else in their family made a purchase and they don’t know about it, like a kid making in-app purchases on a mobile game. They worry that it’s fraudulent and they call the bank.
In other cases, they have already requested a refund from the merchant, and the merchant has agreed. But those things can take a few days, weeks, or even months before they’re fully resolved and refunded. In the meantime, the customer gets antsy, thinks nothing is happening, and so they call their issuing bank and request a chargeback.
Now, the merchant has to deal with the chargeback and risk getting hit with the refund plus all the extra fees, in addition to paying the refund they already promised.
And in some cases, it’s just downright fraud.
How Can Ethoca Help?
Ethoca has two products to help reduce chargebacks and eliminate fraud.
Ethoca Eliminator digitally provides details about merchant orders and account history to issuing bank call center agents. This way, they can communicate with cardholders during a dispute call.
They can see itemized receipts, detailed account history, a summary of merchant actions, and refund status. (This last one would be very helpful to anyone experiencing chargeback double-dipping.) This helps eliminate chargebacks just by reducing confusion over credit card statements, but it can also prevent double-dipping.
As an added bonus, cardholders can even access this information right on their mobile banking app, which can even save a phone call.
The way the system works is a basic five-step process.
- A cardholder contacts their issuer to dispute a charge on their statement they don’t recognize or is willfully attempting to commit friendly fraud.
- The issuer agent logs in to the Ethoca Eliminator portal and requests the necessary merchant information, such as detailed digital receipt, purchase history and account history.
- Ethoca queries the merchant in real-time, pulls the information and delivers it to the agent while they are having their first dispute intake call with the cardholder.
- The agent walks through the receipt, purchase history and refund status (as required) with the cardholder.
- The cardholder now recognizes the purchase and takes responsibility for the transaction – eliminating the need for a chargeback to be raised.
Ethoca Alerts is a near real-time fraud alert system that notifies merchants when card-issuing banks around the world send their confirmed fraud and customer dispute transactions.
Merchants can receive actionable alerts almost immediately, which can help them stop goods from shipping or giving fraudulent refunds to customers. As Ethoca says, “All alerts are 100% confirmed between the card issuer and the cardholder.”
CB-ALERT’s API provides simple integration to automate the response flow to Ethoca’s products. In addition, it provides real-time reporting for a variety of chargeback/fraud metrics so you can truly understand what you are paying for with the alerts. Finally, if you use CB-ALERT as your Ethoca partner, you will only ever pay for alerts that you use.
If you want to protect your business from chargebacks with several credit card networks and have extra fraud prevention protection on your side, CB-ALERT can help. To learn more, please visit the CB-ALERT website.