Allocation in Visa disputes

The following figure shows the Visa Allocation flowchart for fraud and authorization disputes resolution:

The below are the key points that determine the Allocation flow:

• When a cardholder disputes a transaction, the Issuer sends the transaction to the Acquirer along with the chargeback reason, through the card network.
• The Acquirer may send the received chargeback to the merchant and if the merchant disagrees, or the Acquirer disagrees with the chargeback, the Acquirer initiates pre-arbitration against the Issuer through the card network.
• The Issuer responds to the pre-arbitration with an accept or decline. If accepted, the dispute is resolved, and if declined, the case is forwarded to the Acquirer through the card network. Partial acceptance is also possible where the remaining amount is treated as declined. For accepted amounts, the Issuer has to process the liability between taking a write-off or marking the cardholder liable.
• If unsatisfied, the Acquirer files an arbitration case with the card network.
• The card network reviews the arbitration and provides an acknowledgment if the details are correct, and then provides the final ruling on whether the liable party is the Acquirer or the Issuer.
• Either the Issuer or Acquirer can initiate an appeal if they are not satisfied with the ruling, and the dispute amount is at least USD 5,000. The ruling provided on appeal is considered final.
• In Allocation cases, Visa sends the funds to the Issuer on chargeback submission, and the funds stay with the Issuer until liability is decided.