Mastercom Collaboration

Mastercom Collaboration is Mastercard’s latest tool that significantly reduces chargebacks, creating a better landscape for issuers, merchants, and acquirers.

The goal is to open a solid line of communication between acquirers, issuers, and merchants so that disputes can be handled quickly and with less upfront costs.

The theory is that opening a new line of communication between issuers, acquirers, and merchants means disputes can be handled quickly and with fewer costs.

Whether you want to pre-enroll in Mastercom Collaboration or learn more about it, you’ve come to the right place.

Key Takeaways:

In case you are in a rush and want the quick scope, here is a summary of Mastercom Collaboration:

- When: Mastercom Collaboration was set to go live on Sept 11, 2022, and it is now set to launch in the summer of 2023.

- Purpose: Mastercom aims to give merchants a chance to refund a dispute so that it doesn’t escalate to a chargeback.

- How: The issuing bank notifies the merchant that a transaction has been disputed. Mastercom Collaboration then allows you to refund the transaction automatically or manually or let the case escalate to a chargeback and choose to fight it at that point.

- Who: Anyone involved in the Mastercard payment ecosystem is affected by Collaboration. That includes merchants, acquirers, and issuers. These changes will affect all within Canada, the United States, Latin America, the Caribbean, the Middle East Africa, and Europe.

- Price: Fees vary depending on how you choose to handle refunds.

- Pros of Mastercom Collaboration: Refunding your customers quickly and efficiently will help diminish your chargebacks immensely.
  - - Collaboration could save merchants money on the cost of goods if they can refund before shipping.
  - - Customer experience is improved heavily by Collaboration as customers can receive their refund painlessly.

- Cons of Mastercom Collaboration: Not all acquiring banks will choose to implement Mastercom Collaboration. This means that you will need to find a third-party seller. Luckily, we sell Collaboration and know how to implement it properly.

Pre-Enroll In Mastercom Collaboration Today

At CB-ALERT, we are proud Mastercom Collaboration partners and strongly recommend pre-enrolling to stay updated with the latest chargeback prevention tools.

Pre-Enroll Today

What Is Mastercard Collaboration?

In the summer of 2023, Mastercom Collaboration emerges as a catalyst for seamless refund processes, empowering merchants within the payment ecosystem.

Developed by Mastercard, this groundbreaking platform revolutionizes dispute resolution, offering an end-to-end solution that streamlines the refund process and enhances customer satisfaction.

Mastercom Collaboration is a hub where merchants can efficiently manage and address customer refund requests. By leveraging cutting-edge technology and real-time data, the platform enables merchants to proactively identify refund opportunities and resolve disputes before they escalate into chargebacks.

With the enhanced features of Mastercom Collaboration, merchants gain valuable insights into customer disputes, enabling them to assess the validity of claims and initiate refunds promptly.

The platform is an early warning system, notifying merchants when a customer raises a dispute. This timely notification allows merchants to review the claim, assess the supporting evidence, and issue a refund before the dispute escalates to a chargeback.

It also allows the merchant to deny the refund and will enable the case to escalate; at this point, chargeback representment may be an option.

The implementation of Collaboration will significantly transform the dispute landscape, empowering merchants and acquirers with greater control and opportunities for resolution.

The mandatory nature of Collaboration ensures that issuers can only initiate chargebacks directly through Mastercom, allowing merchants to address the dispute beforehand.

Why Is Collaboration Needed?

Mastercard chargebacks have been a severe issue for merchants, issuers, and acquiring banks. This is because the total operational costs from a chargeback can be far higher than the original transaction value.

The average merchant is expected to lose an additional $2.95 for every dollar lost to chargebacks due to related fees such as merchandise and overhead.

While Collaboration significantly helps merchants, it also seeks to help the entire Mastercard ecosystem. Mastercard believes that Collaboration will streamline the chargeback process and help all parties involved, including the customer.

How Does Mastercom Collaboration Work?

The primary objective of Collaboration is to achieve dispute resolution without resorting to a chargeback. In most cases, the most effective means to accomplish this is by facilitating a refund for the disputed transaction.

Below is how Collaboration works:

1. An issuer initiates a claim and chargeback through Mastercom. The system temporarily holds the initial chargeback.
2. In cases where the merchant is not part of the Ethoca merchant network, Ethoca sends a Collaboration request to the acquirer.
3. The acquirer checks for incoming Collaboration requests using the Mastercom user interface (UI) or application programming interface (API).
4. The acquirer, either by directly contacting the merchant outside of the system or acting on behalf of the merchant, evaluates the Collaboration request and determines the appropriate course of action.
5. The acquirer can respond to the Collaboration request using the Mastercom UI or API. Alternatively, the system automatically rejects the Collaboration request if no response is provided within 72 hours.
6. If Collaboration successfully resolves the dispute, the system rejects the chargeback, effectively resolving the issue through Collaboration.
7. However, if Collaboration does not lead to a resolution, the formal chargeback process continues, and the case progresses accordingly.

Merchant Benefits Of Collaboration

According to recent studies by Mastercard, over 70% go directly to their bank with their frustrations rather than to the merchant. This means that even if you have customer service, you may still need to dispute it.

This is where tools like Collaboration come into play. Below are the merchant benefits of Mastercom Collaboration:

- Lower chargeback ratio

- Reduced costs (shipping/merchandise/goods costs)

- Better experience for customer

- Identify disputes faster

Why Should All Acquirers And Issuers Use Collaboration?

Outside of the fact that you can get penalized for not being enrolled, reducing chargebacks and fees is the primary reason.

Mastercom Collaboration provides near real-time dispute data visibility, informing merchants with account data insights based on active fraud chargeback activity to support their billing and fulfillment decisions.

Chargeback Prevention Alerts Vs. Mastercom Collaboration

Chargeback prevention alerts are a fantastic product that can help stifle your chargebacks. Collaboration and chargeback alerts are similar, but let’s look at the main differences below.

Chargeback Alerts

- Available for disputes from all major card brands – not just Mastercard

- Provided by Ethoca and Verifi – Mastercard, Visa, American Express, Discover

- Managed through direct connections to Ethoca and Verifi or through a solution provider such as CB-ALERT

- You are charged a fee for each alert

- You are refunded by the merchant or the third party

- Available for Mastercard only

- Provided by Mastercard

- Managed directly by participating acquiring banks and processors

- Charged fees for each attempt to prevent the chargeback plus non-compliance fees

- Refunded by the merchant or Mastercard

- Shorten the dispute resolution time frame

- Avoid losses with real-time account data insights and chargeback data visibility that supports just-in-time

Collaboration Vs. RDR

Visa Rapid Dispute Resolution (RDR) stands as another notable advance notification system, similar to Mastercom notifications. The primary objective of Visa RDR is to provide merchants and acquirers with advance notice regarding impending disputes. However, there are distinct differences between these two platforms.

The most significant distinction lies in the automatic refund feature offered by RDR. Unlike Mastercom, where the refund process is manual and requires a response from the merchant, Visa RDR allows for automatic refunds.

Mastercard’s protocol mandates that merchants verify their intention to refund the buyer or confirm that the buyer has already been refunded, a process that may take up to 72 hours.

Conversely, the automatic functionality of RDR necessitates that merchants adhere to pre-defined rules governing which transactions can and cannot be refunded.

In contrast, Mastercom Collaboration offers greater flexibility, empowering merchants to review cases individually and submit customized responses accordingly.

Visa RDR

- Automatic refunds

- Resolutions are instantaneous

- Pre-set rules

- All cases must be reconciled inside a CRM

- Refunds are guaranteed against chargebacks

Mastercard Collaboration

- Manual refunds

- Resolution can take between 24-72 hours

- More flexibility as there are no pre-set rules

- Only some cases require a CRM

- Not all refunded transactions guarantee against a chargeback

Should You Signup For Collaboration?

You should sign-up for Collaboration.

Our advice at CB-ALERT is to opt-in for Ethoca alerts today after you signup for Mastercom Collaboration. Then, as the summer of 2023 unfolds, you will have access to this innovative platform.

*Mastercard also has significantly emphasized issuer-merchant Collaboration, which should not be taken lightly.

Here are our final wrap-up thoughts on Collaboration:

- Signing up for Ethoca Alerts before Mastercom Collaboration is a must

- Collaboration only works for Mastercard transactions

- Through CB-ALERT, we can help you optimize Ethoca Alerts and Collaboration to its fullest potential

Now that you have a great understanding of Collaboration, we recommend you pre-enroll below and subscribe to our newsletters so that you get all the updates.

As a proud technology partner of Mastercard, CB-ALERT is here to help! Pre-enroll today so that we can show you the benefits of Mastercard Collaboration.

Request Your Collaboration Demo Today