MRC and Auriemma Roundtables Host Merchant Issuer Collaboration Session

Seattle, WA - May 19, 2021 -- The Merchant Risk Council (MRC) and Auriemma Roundtables recently hosted a collaborative session focused on adoption and effectiveness of 3D Secure authentication and the growing challenge of first-party fraud and misuse. Attendees included the top 20 card issuers from Auriemma Roundtables’ member base and 10 marquee merchants from the MRC.

The group’s discussion was notable for bringing merchant and issuers together to understand differing stakeholders’ perspectives on key topics that are ongoing challenges yet offer an opportunity to brainstorm and implement solutions to benefit the payments ecosystem.

The key takeaways from the session include:

• 3D Secure adoption and improved authentication performance. Rollout and adoption of 3D Secure has been slow across the United States, hampered by uneven market preparedness and customer experience implications. However, opportunities exist for merchants and issuers to improve the approval rates and deter fraudsters. These opportunities include standardizing key data elements shared between merchants with issuers, as well as working with the networks to facilitate enhanced data sharing and adherence to predefined minimum acceptable standards.
• Inconsistent definition and risk appetite for first party fraud/misuse. Delineating between ‘true’ first party fraud and first party misuse boils down to customer intent that creates ambiguity and inconsistent definitions across the payments space. Moreover, different issuers and merchants have varying levels of risk tolerance for first-party fraud leading to different treatment strategies. Best practices identified include steps to alleviate customer confusion by equipping contact center agents with detailed transaction information upfront to remind customers of their transactions and push back on potentially malicious behavior. Certain vendor tools offer detailed digitized receipts to jog customers’ memory about the transaction. On a tactical level, steps such as ensuring merchant names are appropriately spelled when viewed by the customer and do not appear as an ‘alphabet soup’ which add to customer confusion.
• Standardization within the representment process. Disparate information and response formats during the representment stage was identified as a significant challenge for issuers to effectively process a customer dispute. Creating standard templates for information sharing against the relevant chargeback reason codes is an opportunity to reduce inefficacies and save on operational expense. The role of networks is pivotal to ensure adherence to such standards.

Enhanced, consistent, and accurate data sharing between the merchants, networks (gateways), and issuers ties several of the collaboration opportunities together to yield higher approvals (sales), smoother customer experience, improved disputed deflection rates, and a reduction in first-party fraud.

This collaborative session was dynamic and interactive, with both the issuers and merchants sharing viewpoints and challenges related to authorization and the fraud disputes process. By bringing many key stakeholders to the table, the scene has been set for more productive discussions allowing participants to brainstorm further solutions to address the opportunities identified above.

For more information regarding participation in future collaborative sessions bringing together issuers and merchants contact:


Issuers: Ira Goldman, Senior Director, Auriemma Roundtables
Retailers: Julie Fergerson, CEO, Merchant Risk Council