Visa is poised to impose a €12 (£10) charge on credit card acquirers for some chargebacks associated with fraudulent transactions.
Visa chargeback fee to put pressure on travel to counter payment fraud
Visa is poised to impose a €12 (£10) charge on credit card acquirers for some chargebacks associated with fraudulent transactions.
The card-payment processing firm plans to bring in the fee on October 1 for certain transactions in Europe, including a range of ‘cardholder not present’ (CNP) payments.
These make up a significant proportion of distance selling card transactions in the travel sector either online or over the phone, where fraud is rising.
Credit card issuers can force a reversal of a payment when a transaction is disputed via a chargeback on the merchant or supplier as a form of consumer protection.
Financial Fraud Action UK, the financial services industry’s anti-fraud group, has forecast the level of fraud in the travel sector in Europe could treble over the next 12 months to €3 million a month.
The chargeback fee from Visa will put pressure on acquirers to limit their exposure to fraud and could be passed on to their travel firm clients through merchant agreements.
The other major international card membership scheme and payments processor, Mastercard, is expected to follow suit.
Barry Gooch, chairman of the travel industry anti-fraud group Profit, said the move by Visa Europe will amount to a “toughening up” on travel firms.
Gooch said: “That is a concern because it’s a really tough year and we would not want to lose anyone unnecessarily.
“This charge may be enough to make card transactions unviable for some companies.”
Visa has informed acquirers that “a fee of €12 per unsecure keyed fraud chargeback will be levied on Visa Europe acquirers for unsecured CNP transactions” which meet a list of criteria.
These include “where a merchant is operating within a non-secure key-entry environment” that is, the transaction is point-of-sale (POS).
Other criteria included where the transaction is eligible to be charged back for reason of fraud and the issuer has not been reported under Visa Europe’s Issuer Monitoring Programme for reasons of excess fraud.
Profit is running a seminar on chargeback fraud, in partnership with Travel Weekly and Barclaycard, on September 11 in London. To apply to attend, email contactus@profit.co.uk.
