Chargeback prevention alerts are provided by two vendors: Ethoca and Verifi.
The functionality for all alerts — regardless of who provides them — is essentially the same. Prevention alerts can help you refund disputed transactions to avoid chargebacks.
However, there are a couple slight differences between an Ethoca alert and a Verifi CDRN alert.
Here’s what you need to know.
NOTE
In this article, we are going to compare prevention alerts from Ethoca and Verifi CDRN. If you are looking for information on RDR — and how that solution differs from alerts — check this article.
DIFFERENTIATOR #1
Card brand
A couple of years ago, Ethoca was acquired by Mastercard® and Verifi was acquired by Visa®.
Alert coverage is slightly skewed towards the card brand that acquired each vendor. About 75% of Verifi alerts (called Cardholder Dispute Resolution Network or CDRN) are for Visa disputes. And about 60% of Ethoca alerts are for Mastercard disputes.
Yet each vendor maintains a good mix of Mastercard, Visa, and even American Express and Discover.
- About 60% Mastercard
- About 39% Visa
- About 1% American Express and Discover
- About 75% Visa
- About 24% Mastercard
- Less than 1% American Express and Discover
About 60% Mastercard
About 39% Visa
About 1% American Express and Discover
About 75% Visa
About 24% Mastercard
Less than 1% American Express and Discover
DIFFERENTIATOR #2
Geographical coverage
Verifi is a U.S.-based company. Ethoca is headquartered in Canada. As a result, Verifi originally specialized in forming relationships with U.S. issuing banks. And Ethoca had a more global presence.
Today, the two vendors have maintained a slight difference in their regional coverage, but nothing too significant.
Slightly more international issuing banks
Slightly more U.S. issuing banks
Slightly more international issuing banks
Slightly more U.S. issuing banks
DIFFERENTIATOR #3
Dispute types
When they first started, each alert vendor had their own area of expertise. Again, today, coverage is pretty evenly distributed.
Originally intended to address legitimate card fraud
Originally intended to address non-fraud, consumer disputes
Originally intended to address legitimate card fraud
Originally intended to address non-fraud, consumer disputes
DIFFERENTIATOR #4
Data
When an alert is issued, the vendor will provide various data points to help you match the alert to the original transaction.
Both vendors provide these elements:
- The first 6 digits of the cardholder’s account number (called the BIN)
- The last 4 digits of the cardholder’s account number
- The transaction date
- The dispute amount
Each vendor also offers one additional data element — either the customer name or the ARN.
Customer name
Acquirer reference number (ARN)
Customer name
Acquirer reference number (ARN)
DIFFERENTIATOR #5
Time limits
When you receive an alert, you have a limited amount of time to refund and respond. If you don’t manage the alert within the given time limit, the case will likely advance to a chargeback.
24 hour deadline
72 hour deadline
24 hour deadline
72 hour deadline
DIFFERENTIATOR #6
Descriptor matching
A billing descriptor is the short descriptive text that appears on a cardholder’s bank statement to explain a purchase. Sometimes a billing descriptor is referred to as a merchant descriptor, billing name, or statement descriptor.
Both vendors use billing descriptors to match the disputed transaction to the business that processed it. But they use different matching criteria.
Ethoca technology looks for descriptors that “start with” a phrase or have an “exact match”.
Verifi technology looks for an “exact match” descriptor or matches to a registered customer service number.
Ethoca technology looks for descriptors that “start with” a phrase or have an “exact match”.
Verifi technology looks for an “exact match” descriptor or matches to a registered customer service number.
DIFFERENTIATOR #7
Impact on ratios
Prevention alerts pause the dispute process, giving you a chance to address the issue before the case advances to a chargeback. If you refund and respond to the alert within the given time frame, a chargeback is no longer necessary. Which means your chargeback-to-transaction ratio won’t be impacted.
There has been a lot of talk lately about prevention alerts and their impact on the VAMP ratio. Because of a new update from Visa, both Ethoca and Verifi CDRN alerts will have the same impact on your business.
- Can protect your Mastercard chargeback ratio because the alert stops the chargeback from happening.
- Can protect your VAMP ratio because the alert stops the chargeback from happening. But the alert won’t remove the TC40, so fraud disputes — even if refunded via an alert — will still count in your VAMP ratio.
Can protect your Mastercard chargeback ratio because the alert stops the chargeback from happening.
Can protect your VAMP ratio because the alert stops the chargeback from happening. But the alert won’t remove the TC40, so fraud disputes — even if refunded via an alert — will still count in your VAMP ratio.
So which is best?
Ultimately, there isn’t one solution that’s better than the other. Both Ethoca and Verifi alerts are a proven-effective way to prevent chargebacks.
The results are roughly the same.
Management is very similar.
So why choose one over the other?
The better strategy is to use both.
Multiple solutions provide multiple layers of protection. Because one solution’s strengths can compensate for weaknesses the other might have in a certain area. You can get regional and international coverage. Fraud and non-fraud. Visa and Mastercard.
Want to learn more about how to create a complete chargeback prevention strategy? Reach out to our team today.
AUTHOR
Jessica Velasco
For more than a decade, Jessica Velasco has been a thought leader in the payments industry. She aims to provide readers with valuable, easy-to-understand resources.
