Whenever a Chargeback (CB) is submitted, Mastercard (MC) currently is routing that to Global Clearing Management System (GCMS) system directly. GCMS will validate the Chargeback and either Accept or Reject the same.

With the new collaboration layer, Mastercard will not route chargebacks to GCMS and will route all chargebacks to the Ethoca platform. There are no changes to MCOM API integrations as a part of this collaboration layer. Ethoca internally routes the chargeback to the respective merchant. The merchant can either accept the liability and issue a credit to the cardholder or deny the liability within 24 hours.

If the merchant accepts liability.

• Mastercard will place the dispute in the Issuer’s reject queue with reject reason code starting with “5000”.
• Smart dispute application fetches the rejected claim from MCOM and then waits for the merchant credit to be posted to the cardholder before resolving the dispute.
• When a credit is found, the application automatically resolves the dispute by reversing any provisional credit given to the cardholder.
• In exceptional scenarios of partial or no credits, the Issuer will have to contact the Mastercard support team for credits. Issuers in this case will have no further chargeback rights per Mastercard guidelines. Additionally, in exceptional scenarios, Issuers will have the option to write-off or mark the cardholder liable while waiting for credits from merchants.
• A report is provided for Issuers as a part of the MCOM collaboration layer updates to display all the claims which are awaiting merchant credits in CreditTran (existing)work queue for more than three days after Mastercard rejected the chargeback with reason code “5000”.

If the merchant denies liability or in case of no response.

• Mastercard will continue with the chargeback process and moves this chargeback to the GCMS system for further processing. GCMS at this stage, after validations, can pass this to the Acquirer or reject the chargeback in case of any validation failures.
• If rejected at this stage, Smart Dispute application will fetch the rejected claim from MCOM and routes it to the users for further review.

As a part of MCOM collaboration layer, the following features are additionally implemented.

• Claim creation service (Create Claim) which is currently invoked after Transaction Search in InvokeMCOMFlow has been removed based on feedback from many of our clients as creating a Claim within MCOM system may not be needed in cases where a dispute may not flow to MCOM.
• Claim creation within MCOM will now happen wherever we need a claim to proceed further in the MCOM stages as shown below:
  • Retrieval requests
  • SAFE Reports
  • Initiate Pre-compliance
  • Create chargeback (First chargeback only)