Changes to Mastercard chargeback standards

From April 14, 2023, card issuers should use reason code 4837 – no cardholder authorization, to dispute a Merchant Initiated Transaction (MIT) if it does not contain the correct authentication data.

This means that if the card issuer or the cardholder are unable to find a previously authenticated Customer Initiated Transaction (CIT) at the same merchant due to insufficient data being submitted, they are able to raise a dispute.

What do you need to do?

If you utilise MITs, including recurring transactions and subscriptions, you must make sure that the authorization data for the previous transaction in a series shows either:

• The CVC2 validation code that the issuer verified
• A security level indicator with a value of 212 (3D Secure payment/fully authenticated AAV) or 242 (authenticated tokenized transaction e.g a digital wallet authentication).

This will allow your acquirer to provide the information as compelling evidence of the cardholder's participation in the disputed transaction.

Our disputes team are aware of these changes and are also looking to improve the disputes process by automating compelling evidence responses where possible. We will update you on any developments as they are implemented.