What is Verifi and Their Chargeback Alerts

As an online seller, I’m always looking for ways to reduce chargebacks. I discovered Verifi and wanted to share what I’ve learned.

I’ll explain what the company is, go over their tools, then provide other useful details.

Let’s begin with what it is.

Key Takeaways

• Visa owns Verifi.
• RDR can prevent up to 70% of Visa disputes.
• CDRN can prevent up to 41% of Visa and 32% of Mastercard chargebacks.
• Order Insight can prevent up to 70% of eligible disputes.
• Verifi alerts are available through resellers.

We combine CDRN, RDR, and Ethoca Alerts on one platform for easier access. We also offer volume pricing.

Learn more here.

What is Verifi & What Do They Do?

Verifi is a global payment authentication company offering fraud prevention solutions. It helps businesses reduce chargebacks and verify online transactions. Acquired by Visa in 2019, Verifi provides services like chargeback alerts and notifications.

More on these tools now.

Tools Verifi Offers

Here are the different tools Verifi offers:

• RDR: Automatic dispute settlements based on rules.
• CDRN: Alerts that help merchants prevent chargebacks.
• Order Insights: Provides more purchase details.
• Compelling Evidence 3.0: Uses purchase history to fight fraud.
• Fraud and dispute notifications: Alerts for fraud and disputes.

Verifi also offers a service where they’ll fight disputes on your behalf. But that doesn’t require much of an explanation.

I’ll dive into the specifics of these solutions throughout the following sections.

Here’s RDR.

1. Rapid Dispute Resolution (RDR)

Rapid Dispute Resolution (RDR) is Verifi's tool that automates Visa dispute settlements. It resolves disputes between merchants and cardholders using real-time, rule-based decisioning. Sellers define rules to prevent chargebacks at an early stage.

We’ve covered more on RDR in another post. But here’s a quick summary.

Some of the rules that you can pick include:

• Currency code: 3-letter code for the currency (e.g., USD, EUR)
• Transaction amount: Total amount of the disputed order
• Order date: Date the order was placed
• Issuer Bank Identification Number (BIN): 6-digit card prefix showing the issuing bank

From there, this process will happen:

Source: Verifi

RDR handles disputes automatically. If an issue doesn’t meet your rules, you can review it and decide whether to fight.

97% of U.S. issuers and 83% globally use RDR. You’ll rarely encounter cases where these alerts won’t work.

Pricing is flexible, too. You’ll pay less per alert based on your merchant category code. The higher your risk category, the more you’ll pay.

The highest rate won’t exceed what you’d pay for CDRN and Ethoca alerts, though.

And how effective are they at deflecting disputes?

Some analysts suggest RDR can reduce Visa disputes by 50 – 70%. But it only works for Visa transactions.

That’s when you’d need CDRN.

Summary: Automatically refunds customers if a pre-dispute falls within your set rules.

2. CDRN

Verifi CDRN is a network that alerts merchants to potential chargebacks. It connects with issuing banks, giving merchants 72 hours to resolve disputes before chargebacks occur. These alerts only work for US-based customers.

More details on CDRN here. Or keep reading to see if you’ll fully understand it from what I’m saying.

If you need international coverage, Ethoca Alerts might be a better choice.

Unlike RDR, CDRN isn’t automatic, making it more time-consuming to manage alerts. Some certified alert resellers, like us, handle CDRN alerts for you.

CDRN alerts don’t vary by MCC. Most providers charge $35 to $40 per alert.

It covers 50% of Visa, 5% of Mastercard, and around 30% of other networks.

Are they effective in preventing disputes? Very.

Verifi claims they prevent 41% of Visa and 32% of Mastercard chargebacks [1]. The exact industries weren't specified.

This matters a lot since prevention rate will vary.

Prevention rates depend on industry, but one source found CDRN reduced chargebacks in these areas [2]:

• Digital goods: 41%
• Physical products: 21%
• Subscriptions: 19%
• Digital services: 17%

The report didn’t specify which card networks were covered.

Regardless, that’s impressive.

This next solution’s also neat.

Summary: Receive an alert and choose whether to refund a customer. Prevents chargebacks.

3. Order Insight

Order Insight gives merchants real-time visibility into business orders. It tracks order status, helps identify issues, and offers detailed order information to prevent chargebacks.

Read here for more information on Order Insights (AKA VMPI).

I’ll do my best to summarize it in this post, though.

When a customer contacts their bank for details on an order, Visa will request details from the merchant.

These include:

• Purchase date
• Items bought
• Merchant information
• Payment details
• Tracking information
• Device used

The goal of this is to help the customers remember the order they made. 

Here’s a visual on how it works:

Source: Visa

It may not sound effective, but Verifi reports that Order Insight prevents 45% to 70% of eligible disputes.

It's free, so there’s no harm in adding it to your prevention strategy.

This next tool could also help.

Summary: Gives customers more information about an order.

4. Compelling Evidence 3.0

Compelling Evidence 3.0 (CE) helps merchants fight fraud by using a buyer’s past purchase history. It uses 2 previous, undisputed transactions to prove a transaction is legitimate.

These orders must meet these criteria:

• Must be within 120 to 365 days of the disputed transaction
• At least 2 pieces of data must match (e.g., shipping address, device ID)
• Cannot be for fraud chargebacks

The goal of this is to prove that the cardholder is trying to commit friendly fraud.

The goal is to prove friendly fraud. If you win, you’ll still pay chargeback fees. But winning prevents financial loss and avoids affecting your chargeback ratio.

If you’re not familiar with this type of chargeback, we have more information in this guide.

This last solution also doesn’t prevent chargebacks directly. But it can help.

Summary: Uses 2 previous orders to prove a customer is trying to commit friendly fraud.

5. Fraud & Dispute Notifications

Verifi sends dispute notices for fraud and non-fraud cases. These reports help merchants track fraud rates, improve operations, and prevent future chargebacks.

What I like is that they’ll send you TC40 data. A lot of the time, banks will automatically refund customers for small fraudulent orders. Like if a fraudster was testing credit cards.

Merchants aren’t notified of this. However. That instance of fraud still contributes to their fraud rate.

Having Visa’s TC40 data could help you learn whether fraudsters are trying to test cards with your site.

I have more information on TC40 data here.

That’s all for Verifi’s solutions. Let’s see how it’s different from Ethoca.

What Are the Differences Between Verifi & Ethoca?

Ethoca focuses on Mastercard orders. Verifi handles Visa transactions. Both focus on fraud and non-fraud issues. Verifi offers automatic refunds through RDR, while Ethoca Alerts and CDRN requires manual refunds. Both provide similar services like Consumer Clarity (Ethoca) and Order Insight (Verifi).

Both Ethoca and Verifi RDR provide global coverage, while Verifi's CDRN focuses on US consumers.

Ethoca excels in Mastercard transaction coverage with limited Visa support. Whereas Verifi RDR offers comprehensive Visa coverage.

CDRN covers Visa and some additional card brands.

Verifi’s RDR automates refunds. Ethoca and CDRN require manual refunds.

Verifi focuses on US BINs and Visa accounts. Ethoca excels in global BINs and Mastercard accounts.

Ethoca uses exact-match and "start with" descriptors. Verifi uses exact-match and registered phone numbers.

More details on Verifi/Ethoca differences in a separate guide.

You probably want to start using Verifi by now. How would you do that?

Summary: Visa owns Verify, which offers CDRN, RDR, Order Insights, and more. It has mixed coverage (regarding countries). Mastercard owns Ethoca, which has international coverage.

How Would I Use Verifi for My Business?

The simplest way to use Verifi is by finding a reseller. Resellers provide access to CDRN, RDR, and Ethoca Alerts. This eliminates the need to contact Ethoca’s support team separately.

We provide all of these alerts. See how we can help.

However, we don’t offer Order Insights. If you need that, you may want an all-in-one solution. These typically cost over $1,000 per month.

If that’s not ideal, you can contact Verifi directly for all their services. From there, they’ll tell you what you need to do.

That doesn’t mean you still can’t use a reseller for alerts, though.

Before you go, here’s why you should really consider Verifi.

Why You NEED Verifi’s Solutions (Trust Me, It’s Important)

Chargebacks cause financial loss, raise fees, and hurt your business reputation. They strain relationships with payment processors. Too many chargebacks can lead to higher transaction fees, or account termination.

Yes. Yes. That sounds crazy.

Visa has a chargeback monitoring program that could lead to fines and removal from their platform. Only 5% of merchants enter this program.

But, globally, that includes millions of sellers.

Learn more about the program and how to stay out of it here.

Hint: The easiest way to prevent yourself from ending up in this program is to prevent chargebacks.

What Are Other Ways to Prevent Chargebacks?

Try these methods to reduce chargebacks:

• Use advanced fraud detection tools
• Blacklist repeat offenders
• Respond quickly to customer inquiries
• Use clear billing descriptors
• Learn chargeback reason codes
• Set clear refund and cancellation policies
• Delay billing for better verification

If you offer subscription services, cancel them promptly when customers ask.

Strengthen your fraud prevention measures, regardless of the cause.

If you’re a Shopify user, we’ve compared useful apps in another post. Check it out.

For other platforms, consider implementing tools such as:

• Address Verification Service (AVS)
• 3D Secure
• Fraud detection software
• Strong account security, like two-factor authentication

Blacklisting blocks certain customers from making purchases. But persistent fraudsters may create new accounts or use synthetic data. Consider verifying suspicious orders by contacting customers directly.

A clear refund and cancellation policy ensures customers know what to expect. This also helps in chargeback disputes. If a customer violates your policy, the issuer may side with you.

While it won’t prevent chargebacks entirely, it improves your chances of winning disputes. Winning a dispute keeps it from affecting your chargeback rate.

Responding quickly reduces frustration and the chance of disputes.

Your billing descriptor should include:

• Your business phone number
• Product or service information
• 22 – 25 characters in length
• Your company name
• A brief product or service description

Reason codes explain why a chargeback occurs. Each network has different codes. Understanding them helps you prevent specific chargeback types.

We've compiled a comprehensive list of reason codes in a different guide. Check it out for more details.

And that’s all.

Wrapping Up

Verifi alerts are useful, but they’re not the only solution. You also need to manage chargebacks on Mastercard transactions. You can contact Ethoca, but that takes time and involves managing multiple accounts.

We simplify this by offering access to CDRN, RDR, and Ethoca Alerts on one platform.

Learn more about how we can help.

Sources

• [1] CDRN updates. Verifi.
• [2] CDRN alerts. Chargebackhit. 12/07/2023.