In our recent feature for the Payline Blog, we sought to hammer home the need for industry-wide dispute standardization.
Payline, a Pineapple Payments company, offers industry-leading technology, products, and resources to power exemplary business experiences. Payline’s blog focuses on various facets of the fintech industry, from industry standards and practices to management and opportunity. Payline is headquartered in Chicago, IL.
Despite extensive system overhauls by Visa and Mastercard, further regulatory and managerial consistency is required. For example, although the new dispute mechanisms can reduce cases of criminal fraud and chargebacks resulting from merchant error, they remain ineffective against post-transactional fraud.
The article expressed concern that the lack of uniform dispute standards is the probable cause and will persist until the next network update. This is unlikely to occur for the foreseeable future. After all, banks are less concerned with preventing or managing post-transactional fraud, as liability rests solely with merchants.
According to the article, “Uncertainty breeds opportunity for fraud and abuse…especially in payments and finance.
“Even as the Covid crisis winds down, merchants still see significant jumps in first-party threats like friendly fraud. Two-thirds of merchants reported an increase in friendly fraud over the last three years, and another two-thirds said it was a ‘moderate’ or ‘significant’ concern. This doesn’t bode well; if cardholders can get away with first-party fraud, they’re much more likely to make it a habit. Merchants must take this threat seriously and deploy the necessary strategies to fight back.”
