FAQs – Visa Compelling Evidence 3.0

For whom is this update relevant?

All merchants who are receiving Visa chargebacks with the code 10.4: Other Fraud–Card Absent Environment. This is related to fraud chargebacks received on payments where 3D Secure liability shift is not applicable, and the merchant is financially responsible for fraud claims.

How can this change benefit me?

Prior to the release of the new requirements, when merchants received fraud chargebacks on payments without 3DS liability shift, it was challenging for them to successfully prove the original cardholder authorised the disputed transaction.

With the introduction of the update, Visa determined new data requirements for merchants to help them with demonstrating an existing link between the cardholder and the person receiving the merchandise or service and, therefore, increase their chances of a successful dispute defense.

Which disputes are subject to the change in Compelling Evidence 3.0 Requirements?

This update is introduced to enhance merchant’s chances of chargeback defense against friendly fraud CNP (Card Not Present) disputes. Specifically, the ones with the reason code 10.4: Other Fraud–Card Absent Environment only.

What is friendly fraud?

Friendly fraud is when a cardholder (either accidentally or purposefully) disputes a charge they themselves have authorised as fraud. They can do this because they do not recognise the transaction, or they intentionally want to make use of the services/merchandise without paying for it.

When does the change come into effect?

The date shared by Visa is April 15th, 2023.

What are the requirements and what do they mean?

As part of Visa’s initiative to introduce additional protections from illegitimate disputes related to 10.4: Other Fraud–Card Absent Environment chargebacks, merchants will need to provide the following:

• Minimum two of these core data elements:
• User ID (customer account ID / login ID / customer email)
• IP address
• Delivery address
• Device ID / Device Fingerprint
• Minimum of two transactions with the same payment method that settled at least 120 and at most 365 days prior to the dispute date. Each of these transactions must be non-disputed and not-fraud.
• At least two of the core data elements match between prior transactions and the disputed transaction and one of the two must be either IP address or Device ID.
• The 120 calendar days rule does not apply if the other undisputed transactions were original credit transactions (OCT). An original credit transaction is one that delivers funds directly to a recipient’s eligible account. Unlike a purchase transaction, which debits a cardholder’s account, an OCT credits the cardholder’s account (e.g. refunds, etc.).

Is there additional evidence merchants can supply to strengthen their defense?

On top of the aforementioned required evidence, to increase their chances of winning the dispute, merchants can try and link the cardholder to the recipient of merchandise or service by providing any of the additional information below:

• Proof from the cardholder’s social media where they’re seen benefitting from the services or using the merchandise (I.e. photo of the cardholder wearing sunglasses that they disputed as a fraudulent payment).
• Snapshot of security footage at the merchant location showing the cardholder picking up. The goods or using the services.
• Photos taken during the delivery.
• Any written correspondence with the cardholder that proves the merchandise or services were received.

• Examples of email evidence can include:
• Email correspondence from cardholder indicating merchandise was received.
• Or asking merchants how to put items together, make it work, etc.

How can merchants submit these additional details to Adyen?

Get in touch with our Support Team.

What if merchants do not comply with the new Compelling Evidence 3.0 requirements?

The goal of the new requirements is to introduce additional protections from illegitimate disputes and, therefore, increase merchant’s chances of a successful 10.4: Other Fraud–Card Absent Environment dispute defense.

If a merchant does not comply with the new requirements they can follow the business as usual course.

Has the process to defend the dispute changed?

No, the process to defend the dispute remains the same. By following the new requirements merchants increase their chances of a successful dispute defense. However, it does not guarantee it.

Looking for more information?

Please refer to this FAQs document provided by Visa.