3 PAYMENT METHOD SCORECARD: CARD | CREDIT
3.2 Card Credit Card Security Metrics Approvals Considerations Error Resolution Framework System Liability Rules (i.e. Network Rules)
Liability Rules (i.e., Network Rules) Liability rules for card payments include a lot of gray areas. For example, the increased use of tokens amongst various members of the supply chain has also created questions surrounding liability. Refund Mechanisms Refund experiences facilitated by a card payment can be as simple as returning to the store with the purchase, receipt, and form factor used for the original transactions, to as complex as an omnichannel refund where the customer may have purchased with a digital form factor of a physical card. Some of the limitations of current card products to map across various channels for servicing refunds has become more prominent as checkout methods, such as buy-online, pick-up-in- store (BOPIS), become more common. Brand Risk It is not risky at all from a brand perspective to accept credit cards; if anything, it is risky not to accept this payment method from a user experience perspective. Fraud Risk (Merchant) While card-present transactions have experienced less fraud after the introduction of EMV standards including the EMV Chip, card-not-present transactions have received more attention from fraudsters and are susceptible to fraud. Most merchants experience fraud through card payments. Fraud Risk (Consumer) When a consumer experiences fraudulent activity on their credit card, it is typically easily resolved via chargebacks. A study by Chargeflow found that 84% of customers find filing chargebacks easier than requesting refunds from a merchant. 73.6% of disputes become chargebacks, compared to only 26.4% of disputes being resolved with no chargeback to the consumer. 800
Weight Score
15% 3.5
15% 4.0
20% 2.5
Refund Mechanisms
10% 4.0 10% 5.0 15% 2.0 15% 5.0
Brand Risk
Fraud Risk (Merchant) Fraud Risk (Consumer)
TOTAL SCORE
3.6
Approvals Consideration Merchants’ experience with false declines can vary. On the one hand, there can be confusion around response codes from the networks and issuers which can allow too many questionable transactions to go through. On the other hand, the fraud rules can be too restrictive, which has the Card networks are well known for their error resolution framework. From a consumer perspective, chargebacks are simple to request. From a merchant perspective this can be challenging, but new programs like Visa’s Compelling Evidence and Mastercard’s First- Party Trust allow merchants to combat increasing amounts of fraud resulting from this consumer- centric framework. potential of merchants losing sales. Error Resolution Framework
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