MasterCard’s new MCOM Claims Manager – a welcome advancement in dispute processing

 

In April 2018, the world embraced a new way of managing claims on card-based payment transactions, thanks to Visa. Any dispute against a Visa transaction must now follow the rules defined by Visa as part of its Visa Claims Resolution (“VCR”) initiative. It also requires that the claim be managed through the use of its Visa Resolve Online (“VROL”) platform, which can be accessed online or through real-time and batch technical interfaces. While adoption of this new paradigm was challenging in some regions or within certain sectors of the card-processing ecosystem, it has nonetheless vaulted the world into a new era of claims processing.

The rationale for rewriting many of the legacy dispute handling rules at Visa was driven by several factors. First, costs for managing claims continue to rise globally. Second, the volume of disputes continues to rise and in some instances outpaces the growth in electronic payment volumes. Third, and perhaps most importantly, the existing process was prone to misuse, error and inefficiency. Visa responded with a drastically different model to address each of these issues – and they did a good job.

Visa is often regarded as the global leader in the consumer payments space, and moves such as this are not altogether uncommon for the company. As such, Visa often sets the pace and direction for the industry, which means that we can expect other card brands and payment companies to follow suit. In fact, shortly after the VCR announcements, MasterCard announced plans for the launch of a major dispute resolution platform for its network participants. Later this year and in the first half of 2019, MasterCard’s MasterCOM (MCOM) Claims Manager will be made generally available to the world.

This expanded platform is a long-awaited advancement in technology from another leader in the global cards & payments space. Historically, MasterCard’s claims processing tool-sets were disjointed and did not supply the kinds of automation required by its membership. In fact, MCOM was historically reserved for documentation exchange functions only. Financial records had to be managed outside of MCOM either through a processor’s chargeback system or through an in-house terminal entry system, both of which resulted in the construction of an IPM file. Thankfully, the new platform promises to deliver substantial benefits to its global client base by consolidating all claims functions into a single platform.

The launch of this platform is being managed in different ways than what Visa has done with VCR. There is no major rewrite of the chargeback processing rules and reason codes. There is no geographical pilot market that launches before the rest of the world. And, while MCOM has existed for well over a decade as a platform, MCOM Claims Manager platform is brand new, whereas VROL already had all functionality available for managing the chargeback life-cycle (although not all markets used all available capabilities).

The most appealing aspect of the MCOM Claims Manager platform is that it offers a real-time API (similar to the VROL Real-time System Interface, or RTSI). This API will allow any MasterCard member with an existing dispute management platform to interact directly with the MCOM platform for the entire life-cycle of a dispute – including the submission of SAFE reports for Fraud Reporting (in fact, SAFE as a moniker appears to be going away in preference of simply calling it “Fraud Reporting”). This should be welcomed by all MasterCard members everywhere.

At Lean Industries, just as we have done for VROL and Visa’s VCR initiative, we are building out the integration with MCOM Claims Manager by use of their published API. By working in close collaboration with a number of our MasterCard clients, we will be – yet again – on the forefront of delivering extensive levels of automation to help issuers, acquirers, and processors deliver on the goals promised by MasterCard as a result of its new platform: reduced costs, simplified processes and a better user experience for all stakeholders to the claims process. To find out more about how we can help your company take full advantage of the automation options being made available from MasterCard and other leading payments companies, contact us!

 

Angie Noah is the Director of Client Implementations at Lean Industries where she specializes in delivering highly-automated and integrated dispute processing solutions to financial services companies in the US and around the world.