Ethoca and Verifi: What are the Differences & Do You Need Both?

I'm always looking for ways to lower chargeback rates. Verifi and Ethoca offer useful services. I'll cover how they differ.

Then, I'll explain if you need both — sometimes you do.

Let’s begin with the differences.

Key Takeaways

• Ethoca Alerts and RDR (Verifi) work globally.
• CDRN (also Verifi) only works in the US.
• Use both if your chargeback rate is high.
• Always use Consumer Clarity and Order Insight (if possible).
• Visa owns Verifi.
• Mastercard owns Ethoca.

Ethoca vs. Verifi: Differences

The main differences are in their coverage and ownership.

Ethoca and Verifi RDR works with US and global customers.

Verifi CDRN only works with US consumers.

Moreover:

And that Ethoca is to Mastercard as what Verifi is to Visa.

You’ll know what I mean in a moment when I cover these differences:

• Network coverage
• Descriptors
• Refund handling
• Issuer network coverage

I’ll be honest:

From an alerts-only standpoint, I’ve covered the differences in a separate guide. It compares RDR, CDRN, and Ethoca alerts.

This guide focuses on Verifi and Ethoca's overall differences. Let's begin. Though, you will find unique information about the alert services they offer.

Let’s begin with the differences.

1. Network Coverage

Ethoca covers most Mastercard transactions. It also works with some Visa and other card networks — though, the coverage isn’t great.

Visa RDR offers the most coverage for Visa branded cards. But only those cards.

CDRN has more Visa coverage than Ethoca, but less than RDR. It also covers some other brands like Discover.

Here’s a table that summarizes the coverage:

2. Descriptors

Alert solutions will use billing descriptors to figure out who let through the disputed transaction.

Here’s how each solution will use them:

• Ethoca: 
  • Sends alerts based on "exact match" descriptors; or
  • Looks for descriptors with a "start with" phrase
• Verifi: 
  • Uses "exact match" descriptors; or
  • Matches to a registered customer service phone number

3. How They Handle Refunds

Ethoca requires manual refund processing. This gives more control but needs more work.

Verifi uses the Rapid Dispute Resolution (RDR) system. It handles refunds automatically, making the process faster.

CDRN works like Ethoca Alerts. Sellers must handle refunds themselves.

That said, if you use Chargeback.io we can set up automatic refunds for you using our software. 

4. Issuer Network Coverage

Large banks have different types of bank identification numbers (BINs). Banks must enroll BINs with Ethoca and/or Verifi.

BINs classify information like:

• Cardholder risk
• Card brands
• Types of bank accounts

What will BIN coverage look like for Ethoca versus Verifi?

Ethoca covers more global BINs and Mastercard accounts.

Verifi covers more US BINs and Visa accounts.

What is Ethoca?

Ethoca is a global company focused on fraud prevention and chargeback management. They provide solutions that reduce fraud risk, enhance customer experience, and increase revenue.

They offer several products, including:

• Ethoca Alert: Alerts merchants of potential disputes.
• Consumer Clarity: Gives card issuers detailed purchase information to share with customers.

They also offer Fraught Insights. I’m not going to cover that in this guide.

Ethoca is owned by Mastercard, with a primary focus on their own products.

Let’s begin with alerts.

1. Ethoca Alerts

Alerts notify merchants 48 to 72 hours in advance about pending disputes. This early notice allows sellers to manually refund orders before escalation.

Because if you refund the order, there’s no transaction to dispute. And no dispute means no chargeback.

Ethoca alerts cover 95% of Mastercard transactions and around 50% of orders from Visa and other card networks.

Moreover:

Ethoca Alerts only work if the issuer is also a part of Ethoca.

These alerts have an average dispute prevention rate of 40%.

Some sources suggest they deflect 30% of chargebacks for digital products and 17% for physical ones.

How much are these alerts?

A source estimates that Ethoca Alerts cost $40 each.

This information is not from Ethoca's site. Thus, we should take this information with a grain of salt.

I’ve seen many resellers charge a flat $35 per Ethoca alert.

However:

Others, like Chargeback, offer lower rates for higher alert volumes.

Here’s another product that’ll help reduce chargebacks for free.

Summary: Delivers alerts for potential transactions that could result in chargebacks.

2. Consumer Clarity

Ethoca Consumer Clarity provides cardholders with detailed purchase information within their bank apps.

This information includes:

• Merchant details: Clear names, logos, and contact information.
• Purchase details: Itemized receipts, dates, and locations.
• Subscription management: Tools to control recurring charges.

This platform reduces confusion and disputes by offering transparent information. Helping customers recall orders they might have forgotten.

Does it actually work?

Yes.

2 years after Consumer Clarity's implementation, issuers from these regions saw chargeback rates drop:

• North America: 23%
• European: 11%
• Latin-American: 70%

Then one merchant reported a 16% reduction in disputes after using Consumer Clarity.

Screenshot source: Ethoca (PDF)

Everything supposedly has a cost. Does this?

Consumer Clarity is free through Ethoca, though some resellers charge per alert.

For instance, I found one provider (not Chargeback) that charges $0.01 each:

But that’s the price of going with convenience.

Ethoca seems pretty neat. But how does it compare to Verifi?

Summary: It provides detailed information about orders to help customers understand what they ordered.

What is Verifi?

Verifi is a global payments technology company that specializes in fraud prevention and chargeback management.

Their products have the same purpose as Ethoca’s. To reduce fraud and chargebacks while increasing revenue.

These tools include:

• Rapid dispute resolution (RDR): Visa-only alerts
• Consumer Dispute Resolution Network (CDRN): Alerts for more card brands.
• Order Insight: Provides details about online orders.

Verifi is similar to Ethoca but owned by Visa.

Let’s begin with RDR.

1. RDR

Rapid Dispute Resolution (RDR) alerts notify merchants when a customer starts a payment dispute. Allowing immediate refunds before a chargeback occurs.

RDR is the only option that automatically refunds orders.

Saving merchants time on Visa transactions.

RDR covers 97% of Visa transactions and no other card networks. Unlike CDRN alerts, it works with cards globally.

If you needed coverage for other brands, you’d need CDRN or Ethoca.

Is it effective?

RDR typically prevents around 50 – 70% of chargebacks.

And the cost?

Verifi doesn’t disclose pricing.

Though, many resellers will charge $15 to $35 per alert.

I’ve heard chargeback prevention experts suggest Verifi doesn’t offer bulk pricing. Making them less cost-efficient than using resellers who offer volume pricing.

RDR pricing comes with a unique caveat.

Low-risk merchants pay less per alert, determined by their merchant category code (MCC).

For instance, a gambling business would pay more than a cosmetics seller.

Some providers bundle RDR alerts with other chargeback prevention tools and charge a monthly fee. Others charge per alert.

What do you do for alerts with other card brands?

Here’s a solution.

Summary: RDR alerts notify merchants of Visa disputes, allowing them to refund orders quickly.

2. CDRN

CDRN alerts notify merchants when a customer disputes a transaction. Alerts are sent through financial institutions and payment processors. Giving merchants timely information to act.

Like Ethoca, sellers must manually refund the customers.

CDRN covers 50% of Visa, 5% of Mastercard, and 30% of other card networks. Giving you more flexibility than Ethoca or RDR.

But:

CDRN alerts can overlap with Ethoca ones. Resulting in potential duplicate alerts (and charges).

And are they effective?

CDRN can prevent 41% of chargebacks for digital products and 21% for physical goods [2].

Can you guess the cost?

It’s the same situation as RDR. Verifi doesn’t show it on their site.

But you’ll likely receive better pricing through resellers. Since many offer volume pricing.

I have seen many providers charge a flat $35 per CDRN alert, though.

This rate won’t fluctuate depending on your merchant category code like with RDR.

There’s one more neat tool that Verifi offers.

Summary: Provides alerts for potential disputes outside of transactions that only use Visa cards.

3. Order Insight

Verifi Order Insight provides detailed transaction data to help merchants and issuers resolve disputes before chargebacks occur.

It shares key details from a seller’s CRM, like:

• Purchase date
• Items bought
• Merchant information
• Time
• Payment information
• Device used to order
• Tracking information
• And more

Here’s a picture of how it works:

Source: Visa

How does this prevent chargebacks?

Since the customer has more information about their purchase, they will know for sure whether they authorized it.

This prevents them from going to their bank and saying, “I don’t remember buying this.”

These supposedly made up 20% of chargebacks for digital goods in 2016 [3].

Having all of this information in one place can also enable the seller and shopper to deal with the dispute without the bank’s involvement. And if the issuer doesn’t get involved, there’s no chargeback.

Verifi estimates that it has deflected 45 – 70% of eligible disputes [4].

Let’s say the consumer goes to their bank, anyway.

You’ll have compelling evidence to fight the dispute. And the more evidence you have, the more likely you’ll win.

That sounds great, how much would we pay?

There’s no concrete amount. I could only find that it uses volume-based pricing.

Is having Ethoca and Verifi necessary?

Let’s find out.

Summary: It provides detailed transaction data.

Do I Need Ethoca and Verifi?

Ethoca and Verifi serve different markets. Verifi CDRN works best for US customers, while Ethoca and Verifi’s RDR alerts are global.

If your customers are mostly in the US and use Visa and Mastercard, consider:

• Consumer Clarity (Ethoca): Detailed Mastercard purchase information.
• Order Insights (Verifi): Detailed Visa order information.
• RDR (Verifi): Visa transactions without overlap with Ethoca.
• Ethoca: Coverage for Mastercard and other networks.

Having customers outside the US only restricts you to CDRN. However. With RDR and Ethoca Alerts, you’ll have plenty of coverage regarding card networks.

Using a reseller that reimburses for duplicate alert charges, like Chargeback, allows adding CDRN for the most coverage.

Such coverage is only necessary if your chargeback rate is above 1%. Otherwise, you’re letting alerts suck the money out of your bank accounts.

Even if you don’t use alerts, you will want to use Consumer Clarity and Order Insights.

Both have track records of reducing chargeback rates.

Now that you’ve made up your mind on what to use, learn how to use them.

Summary: Use Verifi and Ethoca alerts together if your chargeback rate is high.

How Would I Use These Services?

For RDR and CDRN, contact Verifi support or your account manager.

Complete the enrollment form and provide your Business Identification Number (BIN) and Card Acceptor ID (CAID).

For CDRN, sign the Addendum to the Seller's CDRN Agreement.

To sign up for Ethoca Alerts, contact Ethoca directly. Create an API account, set up your credentials, and configure your settings.

Apply for Order Insight and Consumer Clarity the same way.

The easiest, and often cheapest, ways to get alerts from Ethoca and Verifi are through resellers.

These platforms have the following benefits over going with the 2 companies individually:

• Cheaper: You pay less the more alerts given.
• Easier: All alerts are accessible in a hub.
• Convenience: Some platforms handle CDRN and Ethoca refunds for you.

Many chargeback prevention platforms bundle alerts with services like fraud protection, but these come with high monthly costs.

If you only need alerts, Chargeback offers a straightforward solution.

They’ll deal with refunds for you, charge less the more alerts you have, and have an easy-to-use dashboard.

You should know what chargeback alerts are before considering such services.

Summary: Use resellers or contact Ethoca and Verifi directly to get alerts.

What Are Chargeback Alerts?

Chargeback alerts notify merchants about potential transaction issues. This service allows sellers to refund quickly, avoiding chargebacks. By addressing problems early, merchants can prevent chargebacks and maintain customer satisfaction.

These might sound like a spell that can make chargebacks vanish. But there’s a caveat.

They’re primarily ideal in industries like SaaS or for folks who sell digital products. Otherwise, these alerts could bleed your profits.

Because you pay per alert.

However:

If your chargeback rate is creeping toward 1%, I highly recommend getting alerts.

These are proven to reduce chargebacks. And high chargeback rates can get you thrown into dispute monitoring programs.

Such programs will lead to huge fines, extra chargeback fees, and possible suspension of your ability to process payments.

Again…

Read through the RDR versus CDRN and Ethoca piece I wrote. It’ll provide more depth on when dispute alerts are necessary.

Otherwise. Let’s finish this guide off with some FAQs.

Summary: These alerts warn merchants of potential chargebacks. Giving them a chance to refund orders.

FAQs

Who Is the Parent Company of Verifi?

Visa became Verifi’s parent company after an acquisition on June 28th, 2019.

Conclusion

If you’re a merchant in the US and need to lower your chargeback rates, use CDRN, RDR, and Ethoca alerts. As those will make the biggest difference with chargeback rates.

Outside the US, you’ll use Verifi RDR and Ethoca Alerts.

These can get costly, though.

That’s why you should consider a solution that specializes in chargeback alerts. And that offers volume pricing. That’s where we come in. Try Chargeback and lower your rates.

Sources

• [1] Ethoca vs. Verifi. Corepay. 8/4/2023.
• [2] Can CDRN alerts reduce chargebacks? Chargebackhit. 12/7/2023.
• [3] Order Insight Digital. Visa.
• [4] Prevent disputes. Verifi.