March 5, 2010
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The Billing Dispute Process for MasterCard and Visa, Pt.3
The Merchants' point of view.Once a billing dispute has been received by the credit card holders' issuing bank, it is then submitted to the merchant or their acquiring bank for supporting documentation. The acquiring bank is the bank the merchant has his accounts in, not the credit card holder's bank. The merchant will receive a letter from the credit card holders issuing bank stating the reason, the date by which the documentation must be submitted and which documents are needed to verify who is in error (merchant or credit card holder).
As stated in the previous billing dispute article the reasons the credit card holder may submit a billing dispute could be because there was a billing error (double billing, different dollar amount etc) or fraudulent activity on their statement. When a merchant receives a billing dispute it can then turn into what is called a 'chargeback'. A chargeback means once the dispute has been resolved there is a possibility that money will be taken out of the merchant's account and the credit card holder will be able to keep the provisional or temporary credit given by the issuer. A chargeback will result in money lost by the merchant, and no merchant wants that.
The credit card holder's issuing bank will send the merchant or acquiring bank a letter stating why the dispute was initiated, the merchants supporting documentation needed and the time frame in which to submit all paperwork. The merchant will have a chance to submit in writing any delays they may have in supplying this information. If the information is not in compliance with MasterCard and Visa regulations that would be grounds for immediate chargeback and the credit card holder wins the dispute.
Some of the supporting documentation that the merchant or their acquiring bank will need to submit can be a signed sales receipt; invoice; imprinted voucher or a valid credit card expiration date. (www.pay quickly.com). Not only does the supporting documentation needs to be submitted by the date that is on the letter but it needs to be clear and legible. It is also recommended that the merchant/acquiring bank keep the supporting documentation on file for at least 84 months.