Creating Better Disputes Management for the Growing Demand of Real-Time Payments

  • Cheryl Fitzgarrald, Senior Project Manager at BHMI

  • 23.09.2021 09:45 am
  • #Management #payment

Both the adoption and demand for real-time payments has continued to grow at a rapid pace. Unsurprisingly, this has also created a rise in the number of related disputes, highlighting the need for a better way to manage dispute processing for real-time payments.

Disputes are generally uncomplicated for traditional, card-based transactions. However, the same cannot be said for real-time payments. Networks that enable real-time or near real-time payments like The Clearing House’s RTP Network, Mastercard and Visa push payments, the Zelle network and the soon to be released FedNow, are all gaining ground and adding users. In addition to this traction, the industry is also seeing growth in the variety of use cases leveraging these payments, particularly P2P transactions. While the speed and convenience of P2P transactions has led to their popularity, many are finding that disputing P2P transactions can present significant challenges that are much different from traditional card-based transactions. 

Some of this is attributable to the relatively short time P2P transactions have been in the market. Card-based options have existed for decades, and thus benefit from established, well-defined programs with consistent updates that are understood and trusted by users. However, P2P’s relative newness means that its dispute regulations and procedures are still being created by the various networks. This not only results in less focused programs with uncertain update cycles, but it also means P2P payments users may not be completely aware of who is liable for a dispute until they find themselves involved in one. To add to the possible confusion, P2P transfers in the U.S. may occur in near real-time, but the amount of time needed to research and return P2P funds is about the same as with traditional payments. What is thought of by the consumer as an instant payment can end up taking weeks to resolve as a dispute. 

One strategy to reduce the gap between payment and dispute processing is to reduce the research time required. For example, Australia’s New Payments Platform (NPP) improved its disputes transactions resolution time by creating rules that accept disputes investigations in real time, processing them along with any payment returns through the ISO messaging standard. This has resulted in disputes transactions being processed in close to real time. Enhancing disputes management workflows is another way to help close the gap. By implementing intelligent workflows that can autofill data, automate manual processes, guide staff, or provide direct connectivity with a payment networks’ dispute systems, companies can significantly streamline their resolutions and their back-office operations.

Even as many companies move to upgrade and adapt to the evolving payments landscape, they are still all too often leveraging older, legacy dispute systems ill-equipped and not designed for handling today’s newer payment methods. By modernizing their outmoded systems to be quicker and more flexible, companies will be in a better position to meet the demands of a real time payments environment for the present and future – creating greater value, satisfaction and retention among their customers.

Cheryl Fitzgarrald is a Senior Project Manager at BHMI, a leading provider of software solutions focused on the back office processing of electronic payment transactions and creator of the Concourse Financial Software Suite™. 

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