How Can Merchants Use Rapid Dispute Resolution?

Issuing a refund is always preferable to facing a chargeback. However, once a chargeback has been initiated, typical consumers have already ceased communication with the merchant, complicating the process of gathering transaction details and processing a refund. That’s where Visa’s Rapid Dispute Resolution (RDR) comes in. This revolutionary system gives merchants the opportunity to circumvent disputes by issuing refunds, thus avoiding chargebacks and the resulting blowback.

 

What is Rapid Dispute Resolution?

RDR is a Verifi-branded product that acts as an upgrade version of Visa’s Chargeback Dispute Resolution Network. While the previous platform continues to be accessible, RDR offers enhanced features for merchants making it easier to protect their revenue when chargeback initiations occur.

Merchants have the power to define their own specific rules within RDR, determining the types of disputes they’re willing to accept and refund. When a chargeback dispute is initiated and it matches the merchant’s predefined rules, RDR automatically debits the merchant’s account to issue a refund, which then prevents the dispute from escalating into a chargeback.

 

Enhanced Process Timeline with Predispute Solutions

The thought of issuing automatic refunds whenever a dispute is triggered can be concerning for merchants. However, when compared to the cost of a chargeback, especially after adding in fees and overhead, the cost of a refund is typically a lot less. In fact, in some cases, it can equate to less than half the cost of a chargeback. Furthermore, every chargeback impacts the merchant’s chargeback ratio—a number that can put their payment processing capabilities at risk.

RDR not only provides chargeback prevention but also improves customer satisfaction. While it’s important to blacklist customers suspected of friendly fraud, there are instances where customers genuinely have issues and choose the wrong channel to address them. By issuing immediate refunds when customers attempt to address problems, merchants can enhance their reputation, encourage future purchases and benefit from positive word-of-mouth referrals. That said, if a significant number of customers resort to their banks instead of contacting customer service, it signals an underlying problem that requires attention.

 

Understanding the RDR Workflow

By default, RDR assumes liability for the dispute on behalf of the merchant and refunds the cardholder. Merchants define rules within RDR to determine which disputes they want to fight through representment and recover revenue.

Non-Visa Cards

When a dispute involves a non-Visa card, it can be paused for up to 72 hours, allowing the merchant ample time to respond. RDR sends an alert to the merchant through PayDiverse and at that time, the merchant can choose to initiate a refund and resolve the dispute or accept the chargeback.

Visa Card Transactions

When RDR receives a dispute related to a Visa card transaction, it abides by the merchant’s predetermined rules. Those rules might include:

• Transaction amount
• Date
• Product identifier
• Dispute category
• Chargeback reason code
• Currency code
• Authorization date and time
• Issuer bank identification number

If the RDR process is accepted an immediate credit is issued to the cardholder while those that are declined can proceed to the chargeback phase.
 

Payment Processing with PayDiverse

PayDiverse is an expert in the high-risk payment processor space that provides unparalleled merchant support. For those who struggle to work with traditional banks or payment aggregators, we provide blended domestic and offshore payment solutions, multi-bank transaction processing, and high approval rates.

Our high-risk merchant accounts include RDR and Compelling Evidence 3.0, along with iSpy Fraud Prevention and an advanced chargeback dispute system complete with real-time chargeback alerts. Additional features include:

• Reliable and secure payments
• Customized processing strategies
• Daily account monitoring and management
• Descriptor testing
• Customer service testing
• 24/7 customer support

 

Start Processing with Us Today

Opening your PayDiverse merchant account is easy. Simply fill out our web form, add your digital signature to your applications and submit the requested supporting documents.

We offer:

• 24-hour approval times
• Account set up within 48 hours
• Secure processing
• Creative solutions for high-risk merchants

Apply online today!