With the rise of ecommerce and the emergence of new payment
technologies, the legacy dispute process is badly outdated. Chargebacks are
proliferating, costing merchants and issuers considerable time and money to
process and resolve. Likewise, consumer satisfaction is negatively impacted by
the long, inefficient chargeback processes.

One of the central issues is that many disputed transactions
ending up in the chargeback ecosystem simply don’t belong in that channel. For
example, a consumer may not recognize a purchase on their card statement
because a merchant billed under a different name. Seeing an unfamiliar merchant
name, the cardholder may then initiate a dispute, despite actually being behind
the transaction.

With these issues in mind, Mastercard is working to fix the
chargeback process. PaymentsJournal wanted to learn more about Mastercard’s
innovative approach, so we sat down with Patrick Kelly, Mastercard’s vice
president of Product Management for Cyber and Intelligence Solutions. Joining
us was Tim Sloane, VP of Payments Innovation at Mercator Advisory Group.

Kelly and Sloane identified the factors driving the rise of chargeback volumes and explain why Mastercard is focusing on this area in particular. They also discussed how Mastercard is leveraging its recent acquisitions of NuData, a cybersecurity company, and Ethoca, a company focused on improving chargebacks, to innovate across the entire consumer journey.

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Mastercard is looking
at the full consumer journey, not just the transaction

The payments industry has witnessed many changes in recent
years, and Mastercard is responding accordingly.

“With the growth in ecommerce and digital payments, instant
gratification, and consumers wanting to pay how they want to pay, when they
want to pay, it’s important for Mastercard to be enabling a good consumer
experience,” said Kelly.

To create a positive consumer experience, Mastercard is
setting its sights beyond just the transaction, an area where the company has
historically focused.  Although securing
the transaction is still important, so is the need for improving the experience
after the transaction occurs.

A major part of the consumer journey after the transaction
is chargebacks, the mechanism by which a consumer can contest a purchase.
However,