Payments disputes have been around for many years. One could argue that they date to an infamous back-and-forth over stone tablets from the pre-Christian era, but there are more recent examples, such as where a bank teller or retail clerk might hold up a banknote to the light to check for its authenticity. The concept and overall need to have safeguards in place are nothing new writes Gaurav Mittal, Executive Vice President, Ethoca, a Mastercard company.
Yet, in an era of increased digital connections, we’re riding the wave of new and innovative ways to shop and connect. Look at mobile commerce (known as mCommerce). In the UK, ninety-three percent of the population has a mobile phone. In the US, the figure is at around 97%, with increasing numbers of people paying using their smartphones. At the same time there’s been an increase in high-street retail.
This upward trend brings many opportunities – not least a more seamless method of payment. But it creates a new tension that perhaps for some is uncomfortable, and arguably, a necessary part of our day-to-day retail interactions: the notion of a dispute for when something does not go right.
The key question is: how do we resolve this, while ensuring the experience is pain-free for the business, and the customer? There are many reasons why a customer might dispute a purchase. But, before we explore this in more detail, we must understand what a dispute is and what some of the common causes are.
Disputes under the microscope
Simply put, a payment dispute is where a customer claims a transaction that is registered to their account is invalid or was not fulfilled per expectation. For example, the customer might see a questionable charge on their monthly statement, and then calls their bank to dispute the payment. If there is a resolution to said charge then the case is closed, otherwise the dispute is escalated to a chargeback (which are very costly for all involved).
There are different causes for transaction disputes, but one of the more common ones can be attributed to confusion on the part of the customer. What we mean by this is that a customer sees a charge that they don’t recognise in their digital banking app, suspects it might be fraudulent and then initiates the process to dispute the transaction. To explore that recognition part further, this may be where a company’s legal name appears on the statement, rather than its more easily recognisable merchant or brand name, prompting concern and confusion on the part of the customer.
Addressing the industry challenge
This is an industry challenge and it helps to delve a little deeper. Our research found the vast majority (88%) of consumers would prefer a digital receipt or digital and paper receipt and many would consider switching their banks to be able to see them in their banking app. Digital receipt usage is also growing around the globe, with some countries like Germany seeing a 12% increase year on year between 2021 and 2022 .
There are major benefits to retailers too: two thirds of those surveyed in the research reported that banking apps are valuable as a channel for loyalty programmes. In addition to being a trigger to jog one’s memory on a transaction and prevent a dispute, a digital receipt can serve as an aide-memoire for recall and repurchase.
I think many of us have been in similar situations where we wish we remembered the brand and name of the paint on our walls or carpet on our floors during a home remodel or that we’d saved the receipt for a donation during tax season. These same consumers could also manage subscriptions, request refunds and receive coupons and discounts from their banking app. The end result means there is no need to call a customer service line or even go to a company’s website to carry out simple tasks to get the information that consumers need.
To go on step further, it would also mean that those same consumers could handle the majority of transaction disputes at the simple click of a button from wherever they happen to be. This is something that we’ve always placed at the forefront of our strategy, expanding what is possible for consumers and retailers alike, and how commerce, online and off, can be made even safer, more efficient and more enjoyable for all involved.
The power of trust and transparency…after the point of sale
There is clear potential and power in providing future and ongoing offers post-transaction. With the banking app as a consistent touchpoint, merchant discounts and loyalty programmes have a higher potential to reach increasingly engaged customers at a greater cadence and deeper impact.
We’ve already established that people want to interact with the places they buy from within their banking app – and, if the opportunities are there, then consumers will act on them. This is why now’s the time to explore technology further and examine whether organisations are on the right path to delivering the elevated post-transaction experience that can have customers engaging at an entirely new level.
Delighting customers…reducing disputes
Digital interactions let us more easily manage our lives, whether digitally or in-person. Today’s consumers expect a seamless, user-friendly, real-time and connected digital experience for everything and from any device they use, anywhere. And that is why digital banking platforms offer brands the chance to delight and engage their customers with the features they want and need. This results in an elevated overall experience – and reduces the time spent resolving disputes.
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