Tracy Cray and Craig McClure of Fi911 on ‘Complicated’ Relationship Between Chargebacks and SCA
Our subsidiary, Fi911, is the world’s leading brand helping financial institutions contend with chargebacks. Two of our leading experts, Tracy Cray and Craig McClure, were recently invited to share their expertise as part of a special feature for The Paypers.
The Paypers is the Netherlands-based leading independent source of news and intelligence for professionals in the global payment community. The outlet provides a wide range of news and analysis products aimed at keeping the e-commerce, fintech, and payment professionals informed about the latest developments in the industry.
As explained in the piece, there is a complicated relationship between SCA and the chargeback process. More reliable customer authentication may help prevent many fraud incidents confronting merchants. However, they may present other opportunities for abuse as well.
“Ultimately, where one door closes another route will be found,” Craig says, referring to fraudsters in a post-SCA marketplace. “For example, we saw this happen when Visa Claims Resolution (VCR) was implemented in 2018 and the ‘unrecognised transaction’ reason code was removed, and a lot of these chargebacks migrated to fraud reasons.”
Furthermore, Tracy notes that even with Transaction Risk Analysis in place, merchants may still be vulnerable. “When merchants choose to [deploy TRA], liability for the transaction will be reversed to what it was prior to SCA and they will be liable for chargeback claims,” she says. “If the merchant does choose to avail of exemptions, they will have to resolve chargebacks – whether they are genuine or cases of friendly fraud.”
