If you run a business, you probably accept credit as a form of payment. If you do business in Europe, you probably have accepted customers’ payment via Visa Europe cards. Visa Europe has recently changed their scheme for fraudulent chargebacks. It would behove you and all other merchants and business owners to be cognisant of the new rules.

What are chargebacks?

Visa Europe’s new policy concerns chargebacks. Chargebacks are a type of protection for the customer from the bank that issued the card. Chargebacks allow the consumer to file a complaint about a fraudulent transaction on their account, providing security to their funds and banking. To learn more about chargebacks, click here.

What is the new policy?

Visa Europe has introduced a new mandated EUR 12 Scheme Fee for Fraudulent Chargebacks. As of October 2014, all chargebacks must be issued from a European issued card and the new scheme applies only to fraudulent chargebacks. Fraudulent chargebacks include reason codes 75, Cardholder does not recognise, and 83, Card absent fraud.

Why the new Scheme Fee?

Visa Europe’s reasoning behind their decision is that they have seen a month on month increase in Card Not Present Fraud, and they wanted to create an incentive for merchants to improve their fraud strategies and increase the use of 3D Secure. 3D Secure is a protocol intended to provide additional security for online credit card and debit card transactions. Visa’s version of this is called Verified by Visa (VbV). Visa Europe is hoping that more online merchants will begin to implement VbV and that this will lead to a reduction in the number of incidences of fraud and customer complaints, therefore resulting to fewer chargebacks.

Who is affected?

The new scheme could potentially affect any merchant who performs online transactions in the European Union. The Scheme Fee applies to all European Acquiring Banks. The Scheme Fee also applies to fraudulent recurring transactions with European issued cards when the initial transaction was processed through 3D Secure.

For more information, contact our team today.

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