Mastercard Acquirer Collaboration – 2022 Revisions

This year is introducing significant updates across the payment ecosystem. The Mastercard Collaboration revision is a true game changer for both merchants and acquirers.

Issuers, Acquirers, and merchants can avoid/fight disputes and subsequent chargebacks by sharing near real-time information early in the dispute lifecycle for a quick resolution.

Through the collaboration process, acquirers can now resolve disputes by partnering with their merchants before a chargeback occurs, ultimately enhancing the dispute process while simultaneously reducing fees related to disputes.  

One of the biggest takeaways from AN 4655 is that merchants who do not participate directly in Collaboration will still receive the benefits of Collaboration through their acquiring banks.

*In this article, we will break down the Mastercard Acquirer Collaboration in full detail and provide dates so that merchants, acquirers, and issuers can act accordingly. Unfortunately, most of this information is extremely hard to find through public search channels and only really available to direct partners of Mastercard.

We are proud to announce that our sister company, CB-ALERT is a technology partner for Mastercard Collaboration. If you’re looking to stay up-to-date with the latest changes in payment processing, contact our Corepay support team to collaborate. We are confident that we can significantly reduce your chargebacks.

When Are These Changes Set To Go In Effect?

These changes are expected to go into effect on Setempber 25 2022, entirely. 

Here’s a quick timeline of the effective dates related to Collaboration, as well as a brief description:

  • October 24, 2021:  Issuers can no longer generate retrieval requests for transactions in production, except for transactions related to U.S. healthcare
  • November 24, 2021: Acquirers can no longer respond to retrieval requests using the existing process in production, except for transactions related to U.S. healthcare
  • April 8, 2022: Acquirers can use the Mastercard Test Facility (MTF) to receive Collaboration requests and respond
  • September 25, 2022: Acquirers receive Collaboration requests and can respond to them in production

Who Is Affected By Collaboration?

Anyone involved in the Mastercard payment ecosystem is affected by Collaboration. That includes merchants, acquirers, and issuers. 

These changes will affect all within the following regions:

  • Canada
  • United States
  • Latin America
  • Caribbean
  • Middle East
  • Africa
  • Europe

As you can see from above, these revisions affect merchants globally.

Why Customers Benefit From These Changes

The inclusion of acquirers in the Mastercard Collaboration process benefits every party involved in the dispute resolution ecosystem. 

As with any significant update, you will most likely wonder, do we need these changes? 

Absolutely! The changes are being made to reduce chargebacks and costs related to them

These changes are aimed to accomplish the following:

  • Promote faster/more efficient resolution of disputes
  • Reduce chargebacks and all associated costs
  • Shorten the dispute resolution time frame
  • Avoid losses with real-time account data insights and chargeback data visibility that supports just-in-time
  • Improve the consumer experience and brand loyalty
  • Reduce costs from third-party service providers

What Is Mastercard Doing With These Revisions?

Mastercard is transforming the dispute resolution process to rehash the above to benefit the payment network stakeholders. 

The intention here is for AN 4655 to provide acquirers in the Mastercard Collaboration process greater transparency and cost/time savings for all stakeholders. This also includes merchants who are not currently participating in Collaboration, and requires no technological development for the merchants.

In this enhanced Collaboration process, acquirers will receive Collaboration requests. Acquirers can then work with their merchants before creating responses to specific requests, or have an automated process in place to respond to disputes by automatically refunding. By doing this, acquirers can resolve disputes earlier in the dispute cycle while avoiding chargebacks.

Acquiring Bank Changes To Expect

Acquiring banks are now required to receive Collaboration requests. Acquirers can choose whether or not to respond to each request, based on feedback from each specific merchant.

As part of these changes, acquirers can only respond to Collaboration requests, as opposed to the traditional retrieval requests, except those involving U.S. healthcare transactions.

How much will this cost acquirers/merchants? It’s important to note that pricing has not been revealed at this time. However, we know that Mastercard will publish pricing details for each region separately, meaning the costs will differ based upon region/country.

When pricing is posted, we will update this article with a breakdown of what you can expect to pay based on your region.

The secondary cost to acquirers, of course, lies in the technological development and ability to integrate Mastercom. This can be a significant burden to both large and small acquirers as substantial changes may be required to the existing reporting mechanisms. Thus, many acquirers are choosing to partner with third party organizations such as CB-ALERT, who are already providing this technology.

 

Issuing Bank Changes To Expect

The new system generates Collaboration requests on behalf of issuers, except for claims related to U.S. healthcare. Rather than receiving traditional retrieval requests from the acquirer, issuers will receive Collaboration responses from the acquirer, allowing them to act in real time.

How Does This Affect Dispute Resolution Functionality?

Acquirers and issuers should use new Mastercom API to process Collaboration requests, as the old Dispute Resolution does not support the new functionality.

New Collaboration Process Using Mastercom

  1. An issuer creates a claim and a chargeback using Mastercom. The system holds the first chargeback.
  2. If the merchant is not part of the Ethoca merchant network, Ethoca sends a Collaboration request to the acquirer.
  3. The acquirer uses the Mastercom UI or API to check for Collaboration requests.
  4. The acquirer contacts its merchant outside of the system or acts on behalf of its merchant to determine how to handle the Collaboration request. 
  5. The acquirer chooses to respond to the Collaboration request using the Mastercom UI or API, or the system automatically rejects the Collaboration request after 72 hours.
  6. If Collaboration succeeds in resolving the dispute, the system rejects the chargeback. If Collaboration does not resolve the dispute, the formal chargeback process continues.

Why Should All Acquirers And Issuers Use Collaboration?

Outside of the fact that you can get penalized for not being enrolled, reducing chargebacks and fees would be the simple answer. 

Mastercom Collaboration provides near real-time dispute data visibility, informing merchants with account data insights based on active fraud chargeback activity to support their billing and fulfillment decisions.

Wrapping Up

Mastercard Collaboration is a gamechanger for all involved in the dispute resolution process and payment space. Through Collaboration, merchants, issuers, and acquirers can feel a little more secure when dealing with chargebacks as Collaboration opens the window of real-time communication between all involved in the payment ecosystem.

As a proud technology partner of Mastercard, Corepay is here to help! Contact our support team today, to show you how you can reap the benefits of Mastercard Collaboration.