MasterCard Dispute Resolution!!


MasterCard is enhancing the charge-back process by making it easier and faster to handle disputes. It’s called the MasterCard Dispute Resolution Initiative and it will be a rules-based charge-back decisioning process.

The aim from MasterCard is to improve the dispute handling process by automatically detecting invalid disputes, shortening dispute resolution time-frames and updating some dispute reason codes and their conditions. This will decrease the charge-back volumes and allow for faster resolution of disputes.

The Dispute Resolution Initiative will roll out in phases, according to the below timelines:

  • First phase: October 12, 2018 (No development changes required)
  • Second phase: April 12, 2019 (The announcements in this phase are subject to change by MasterCard)
  • Third phase: October 18, 2019 (Impact will be further clarified by MasterCard)
  • Fourth phase: April 17, 2020 (No development changes required, however the announcements in this phase are subject to change by MasterCard)


First phase: October 12, 2018

Issuers will be required to request more information from their cardholders so they can file charge-backs for the following reason codes:

  • 4863 – Cardholder does not recognize
  • 4853 – Cardholder dispute (for recurring billing and digital goods)
  • 4834 – Point of interaction error
  • 4831 – Incorrect Transaction Amount/Transaction amount differs

By requesting this information at the first charge-back stage, MasterCard aims to reduce invalid charge-backs raised without the necessary information. Our customers don’t need to take any action regarding this change.

Second phase: April 12, 2019

As of April 12, 2019, if acquirer initiates a refund after the charge-back has been reversed and the issuer files a second charge-back, it will result in a double loss. Acquirer don’t recommend to initiate refunds once a charge-back has been reversed.

As a best practice, communicate clearly with the shopper if acquirer do perform a refund after the first charge-back has been reversed.

As always, if a refund is issued before the first charge-back, acquirer have one opportunity to provide the refund information to the cardholder, which is in the response/defense to the first charge-back.

Issuer have automated dispute defense for fully refunded transactions and will always send the refund details to cardholders.

To support faster resolution of disputes, MasterCard has reduced the timeframe to file a charge-back for reason code 4834 – Point of Interaction Error from 120 days to 90 (counted from the transaction date). The customers won’t need to do anything here if they are an existing one.

Lastly, the below charge-back reason codes will be removed from the rules and issuers will no longer be allowed to file a charge-back:

  • Charge-back reason code 4840 – Fraudulent Processing of Transactions
  • Charge-back reason code 4863 – Cardholder does not recognize

Third phase: October 18, 2019

MasterCard has announced they are planning additional changes effective in October 2019.

Fourth phase: April 17, 2020

MasterCard will not send a second charge-back for the following reason codes.

  • 4837 – Fraud (excluding 4870 – Chip Liability Shift and 4871 – Chip/Pin liability shift charge-backs)
  • 4853 – Cardholder Disputes
  • 4834 – Point of Interaction Error

Instead, for these reason codes the issuing bank will be able to send a pre-arbitration charge-back.

MasterCard will align with the Visa collaboration charge-back process (the consumer dispute category) whereby issuers can continue the dispute with a pre-arbitration charge-back.The pre-arbitration chargeback is initiated by the issuing bank, when the cardholder does not agree with the defense information provided by the merchant.

Based on the current information MasterCard has provided that there will not need to be any development work, as the new flows should match the ones currently used for Visa VCR. Merchants should keep in mind that MasterCard is only removing the second charge-back cycle for the above-mentioned dispute reason codes.Dispute reason codes that do not fall in these categories (for example, 4808 – Authorization related disputes) can still receive a second charge-back.

MasterCard’s dispute process Life cycle:

Stage One: First Presentment

First presentment transaction is when the transaction has been processed and is settled. The funds are in the merchant’s account, and the cardholder received a withdrawal and merchant descriptor on their account statement.

Currently, the MasterCard Dispute Resolution Initiative does not appear to make any significant changes to this stage. The only phase that will affect First Presentment is the first phase, where Late Presentment will be a new condition under Dispute Reason Code 4808.

The thing to remember is Late Presentment will still be a reason for a potential dispute, even if this reason no longer has a distinctive code. The best way to protect your business from late presentment is to settle funds before the Approved authorization expires. The authorization time limit will vary from business to business, and it can range from 24 hours to 31 days

Stage Two: Charge-back

The cardholder submits a claim, and the issuer believes it is valid to file as a dispute. As a result, the merchants receive a dispute. And the disputed funds are withdrawn from their account and transferred back to the cardholder’s account. This of course is a simplified explanation of the charge-back process.

At this point, MasterCard’s charge-back time limits are still 45 days from the charge-back date. But there is a possibility that the network will want to reduce these time limits and streamline its dispute process. This is based on the actions Visa took under the VCR. It will not be surprising if the MasterCard Dispute Resolution Initiative does something similar.

But even when MasterCard rolls out a more streamlined dispute process, merchants won’t receive the full benefit when their dispute workflow is manually-driven.In short, a streamlined dispute process will involve automation in order to pull and format data into a response document. That is what makes dispute management software more of a necessity to catch up with these upcoming changes.

Stage Three: Second Presentment (a.k.a, Pre-Arbitration)

The cardholder and/or issuer challenge the merchants’ argument for successfully initiating a chargeback reversal during the Chargeback stage. They do so based on one of two conditions:

  • The cardholder and/or issuer believes the merchant’s response did not fulfill the requirements of the dispute reason code
  • Can provide information that addresses the original reason for the dispute

Stage Four: Arbitration Charge-back

It is too soon to extract insight that gives some notice of potential changes in Arbitration Charge-back.


Non-banking Financial Company : The Indispensable Facts!!!


A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 of India, engaged in the business of loans and advances, acquisition of shares, stock, bonds, hire-purchase insurance business or chit-fund business but does not include any institution whose principal business includes agriculture, industrial activity or the sale, purchase or construction of immovable property.

A non-banking institution which is a company and has principal business of receiving deposits under any scheme or arrangement in one lump sum or in installments by way of contributions or in any other manner, is also a non-banking financial company (Residuary non-banking company).

The World Bank has endorsed the use of reported non-financial data in the credit origination processes and considers it a powerful tool for driving financial inclusion in emerging markets. More recently, in the Financial Inclusion 2020 (FI 2020) roadmap, Accion highlighted the great value of alternative data as an instrument to increase financial inclusion and help achieve their FI 2020 objectives.

Salient features of NBFCs:

  1. The NBFCs are allowed to accept/renew public deposits for a minimum period of 12 months and maximum period of 60 months. They cannot accept deposits repayable on demand.
  2. NBFCs cannot offer interest rates higher than the ceiling rate prescribed by RBI from time to time. The present ceiling is 12.5 per cent per annum. The interest may be paid or compounded at rests not shorter than monthly rests.
  3. NBFCs cannot offer gifts/incentives or any other additional benefit to the depositors.
  4. NBFCs (except certain AFCs) should have minimum investment grade credit rating.
  5. The deposits with NBFCs are not insured.
  6. The repayment of deposits by NBFCs is not guaranteed by RBI.
  7. There are certain mandatory disclosures about the company in the Application Form issued by the company soliciting deposits.

Types of NBFCs in India:

  1. Investment Company: IC means any company which is a financial institution carrying on as its principal business the acquisition of securities
  2. Loan Company: LC means any company which is a financial institution carrying on as its principal business the providing of finance whether by making loans or advances or otherwise for any activity other than its own but does not include an Asset Finance Company
  3. Asset Finance Company: An AFC is a company which is a financial institution carrying on as its principal business the financing of physical assets supporting productive/economic activity, such as automobiles, tractors, lathe machines, generator sets, earth moving and material handling equipment’s, moving on own power and general purpose industrial machines. Principal business for this purpose is defined as aggregate of financing real/physical assets supporting economic activity and income arising therefrom is not less than 60% of its total assets and total income respectively
  4. Infrastructure Finance Company: IFC is a non-banking finance company a) which deploys at least 75 per cent of its total assets in infrastructure loans, b) has a minimum Net Owned Funds of ₹ 300 crore, c) has a minimum credit rating of ‘A ‘or equivalent d) and a CRAR of 15%.
  5. Infrastructure Debt Fund: Non- Banking Financial Company (IDF-NBFC): IDF-NBFC is a company registered as NBFC to facilitate the flow of long term debt into infrastructure projects. IDF-NBFC raise resources through issue of Rupee or Dollar denominated bonds of minimum 5 year maturity. Only Infrastructure Finance Companies (IFC) can sponsor IDF-NBFCs.
  6. NBFC-Factors: NBFC-Factor is a non-deposit taking NBFC engaged in the principal business of factoring. The financial assets in the factoring business should constitute at least 50 percent of its total assets and its income derived from factoring business should not be less than 50 percent of its gross income.
  7. Housing Finance NBFCs: It is a form of non-banking financial company which is engaged in the principal business offinancing of acquisition or construction of houses that includes the development of plots of lands for the construction of new houses.

Residuary Non-Banking Companies (RNBCs): It is yet another form of a financial institution engaged in the principal business of accepting deposits, under any scheme or arrangement or in any other form and not being asset financing, investment, Loan Company. The Residuary Non-Banking Company primarily deal in accepting deposits in any form and investing these in the approved securities. The operations of such company are regulated by RBI and in addition, to the liquid assets, it maintains its investments as per the RBI directions.

National Common Mobility Card: One for All!!!


Todays generation is an evidence of revolution which’s taken place under the tag of Digital India. So far, face of the Payment industry is changed drastically and that too within last few years. And a good thing is, uprising phase is still in-process.

One of the positive and important outcomes of this is, rise in the Technological awareness within common man. Trust towards technology has grown within Indians. Day by day people are becoming more comfortable with digitalization. Result of which, people have understood the importance of cashless transactions. Per individual average usage of a card or mobile phone to make any payment is now increased. Matter of fact is, people are avoiding cash transactions wherever it’s possible.
Bill payments, Fund transfer, ATM transactions, POS purchase, recharge and top-ups of mobile/DTH, E-commerce, Online Ticketing of movies, transit etc. can be easily done by using any of the options from Cards (Debit, Credit, Prepaid, Gift, Transit etc.), UPI, Online/Digi Banking, e-wallets etc. But each payment method requires its respective product to be used to perform a transaction. Like one cannot use a bank issued standard debit/credit card on all transit systems, a transit card cannot be used at fuel stations, prepaid cards cannot be used everywhere and so on.

National Payment Corporation of India (NPCI) identified this gap and came up with a solution of having a ‘single card’ which can support maximum possible payment methods and channels.The card got its name as ‘National Common Mobility Card (NCMC)’ aka ‘RuPay Contactless Card’.
It is based on qSPARC specification, which is NPCI’s Dual Interface Open loop payment specification with the feature of loading multiple payment applications on a single card. This card is supported by diversified sections like retail shops, restaurants, retail outlets, ATM/Kiosk, Vehicle Parking stations, Buses, Cabs, Metros etc.

Some more information like, how to get it? other aspects? pros & cons? etc.

Card issuance: 

The card can either be a Debit, Credit or Prepaid card. To get this card, one will need to make an application at Bank. One can apply for a new card or an upgrade for existing one.

As of today, these cards are available with below banks.

  • Debit Card – PNB, BOB, Saraswat, TJSB and UBI
  • Prepaid Card – ICICI, Axis, HDFC, SBI, CSB, YES, Paytm, Andhra

NCMC card can be issued by any member authorized by RBI. Near future, this card will be available with some more banks as well.


This card can be used at all those channels on which the existing cards are being used in traditional ways. For example, at ATMs, POS & online (ecommerce) payments etc.
On top of it, this card can also be used at additional services such as transit, toll, parking & other small value merchant payments where a traditional bank issued Debit/Credit fails to work.

Service area/compartments:

 As the NCMC card is based on qSPARC specifications, this card comes which a unique feature of storing values on card.
It enables Acquirers or Operators to own independent blocks on the payment card. These blocks are referred as ‘Service’.
An acquirer who wishes to implement special function along with the EMV based payments on specific terminals can do so using empty storages area called as ‘service compartment’ or ‘service area’.
Service compartments may contain data which is specific to a particular operator.
Single card is capable of supporting multiple services for payment and non-payment capabilities.

Service area activation:

  • To use these additional services, a card needs to have the service areas activated into it.
  • There are two ways by which the service areas can be activated.
    • Pre-issuing: Service can be personalized on a card by bank while personalization of card.
    • Post issuing: User can have services personalized on card by writing desired services on it. This can be done using special Terminals which are capable of writing services on card. Please check below flow diagram.

Card Top up or recharge:

Top up is purely categorized on the basis of types of services.
Let us assume that one wants to use the card at metro station. Then the person will need to top up the card for its respective supported service area like ‘Transit’. Later on, the same topped up amount available on card can be used for other services as well, which falls under same service area.

Below are the options by which a top up can be done.

  • Online using card
  • Internet banking
  • IVR
  • ATM
  • Over the service counter using Cash
  • Auto top-up

Comparison between NCMC and Other Proprietary prepaid cards:

Concern NCMC – Open loop smart card Proprietary – Closed loop smart Card
Customer Friendly Customer can use the same card for Metro and Bus travel in all the City and States within the country. Customer need to buy different cards for transport Systems.
Convenience Customers will use their bank issued NCMC card for fare payment rather than waiting in a queue for card/token/ticket issuance. Customer may require to stand in queue for card issuance, Top up etc.
Loyalty Points Consumer may benefit from loyalty/reward points from partner banks, as provided in case of Debit and Credit cards. No such provision. Any such loyalty and discount are cost to the Public Transport Operators.
Minimum Infrastructure Public Transport Operators can minimize their cost involved in maintenance of infrastructure and manpower for card issuance, Top-up, card replacement and refunds, as open loop cards can be issued by multiple partner banks. Each Public Transport Operators need to bear the significant expense for maintenance of infrastructure and manpower for card issuance, Top up, card replacement and refunds.
Negotiating Power As open loop acceptance devices are based on open interoperable standards, there are multiple vendors available for payment acceptance devices, which provide an opportunity for cost and service negotiation. Closed loop cards may be of proprietary standards, leading to vendor lock in for subsequent purchase and renewals of acceptance devices.
No vendor lock in Open standards-based payment acceptance devices provide the freedom for subsequent purchase and renewals of devices. Proprietary standards may lead to vendor lock in for subsequent purchase and renewals of acceptance devices.
Ease of Implementation Well standardized payment acceptance devices and availability of multiple vendors provides ease of implementation. Payments related scope of work to be taken care by partner bank and hence PTOs may focus on their key activities. PTOs need to evaluate multiple proprietary specifications leading to difficulty in implementation.
Fast Deployment Due to similar implementation process, best practices and reference implementation guidelines, there will be standardized procurement practices, and RFPs. This considerably expedites the deployment of digital payments in Public Transport Operators. Each deployment will have specific requirements and considerable expertise is required by each Public Transport Operators for selection of appropriate solution.
Retail acceptance NCMC open loop card offers acceptance at all the existing retail POS devices. Closed loop cards can only be accepted within their operating environments.

Now let us see what are the Pros and Cons:


  • No need to keep multiple types of cards in wallet (Like debit, prepaid, transit etc.). As one card supports maximum services.
  • Supports online as well as offline payment modes with minutest risk of fraud.
  • Motivates customers for cashless payments and provides a mechanism of including Low Value Payments (LVPs) into cashless. Result of which, customers end to end everyday needs would shift from cash to cashless transactions.
  • Supports EMV based contact and contactless payment transactions with standard guidelines.
  • Supports both Account based and Card based payment models.
  • Supports cashless and contactless ticketing across various transit operators.
  • Reserved space on card for acquirer or operator specific program implementation. Supports Closed, Open and Semi-closed loop environment.
  • Multi-level wallets: qSPARC specifications supports creation of wallets in card at two different levels – Global and Local.
  • Other benefits:
    • Open Standards
    • High Security
    • Vendor Agnostic
    • Data storage
    • Inter-operability
    • Scalability
    • Stored Value


  • Presently the number of merchants who are supporting qSPARC cards is very less.
  • Certification will be applicable for Acquirer, Issuer and Terminal vendor. Which involves both the factors ‘time and money’.
  • Cost is involved to replace already issued RuPay cards with new qSPARC cards. Hence either issuer Bank or customer has to bear the cost.
  • People are not yet very much aware about this card and its features. A strong product marketing will be needed to promote this card.

Future of NCMC:

  • Understanding perspective: Looking at the pace of digitalization towards cashless transactions in the era of Digital India, we know very well that how people have managed to utilized services made available so far. NCM card and its features not being exception, people should not find it difficult to understand.
  • Card issuance view point:Issuer would prefer to re-issue an expired card with new NCMC. Techno-savvy’s and exited ones would not think of bearing cost to go for this new card. Reaching up to large number of card base would take some time.
  • About transaction volume:
    Projects like smart cities would accelerate the future of NCMC. Apart from this, many other types of acquirers are supporting NCMC card.Looking at overall market available, if the supported platforms are made available in decent numbers then, it will be a definite addition to the list of NPCI’s successful products.

The QR Code Evolution/Revolution!!

QR Code: A QR code, also known as a Quick Response Code is a 2-D (two dimensional) barcode. A QR code usually contains information pre-programmed by the originator. It could be a URL, text, image or general information. To reveal the information, the user will require a mobile phone software with the ability to scan and understand the code using the mobile phone’s camera.

A QR Code is an ISO 18004-compliant encoding and visualization of data.

QR Code Based Payments: The Visa QR Payments Code is a form of barcode that has the merchant’s information (merchant name & account details) required for bill settlement. To make payments, all that is required is for the customer to scan the merchant’s QR code by selecting Visa QR on his/her mobile banking app.

The new world of commerce with the QR code can be conducted anywhere there is an outlet — you can stand on the surface of the planet and get a cell phone signal. It is quite likely, in many of these markets, that plastic and legacy POS will leapfrog almost entirely. The standard must also be capable of enabling a secure payment via a static QR code on a merchant placard.

A QR code is a pointer to an underlying credential to initiate and receive a payment. The pointer now is a QR code — I don’t know if it will always be. But, in these markets, QR is about getting credentials in everyone’s hands and getting the usage understood. From there, is it is an easier evolution to provide other use cases to people based on something beyond QR.”

Visa QR is an innovative way to make payments with your mobile phone. There is no need to carry cash everywhere you go. Just select Visa QR on your mobile banking app and scan the merchant’s QR code to make payments.

How Do QR Code Payments Work?

Customers simply need to scan the QR code and enter the transaction amount. The amount gets transferred directly from the bank account without the need of a swiping machine. It eliminates the need of entering the merchant’s ID or phone number to make payments.

For those using mobile banking apps for scan and pay, the app acts like a virtual debit card that can be used online or offline.

1.Buyer-to-Large Merchant Transactions – Buyer Scans

This system of QR Code payment applies to large retailers such as supermarkets. Let’s assume they have barcode scanners at every POS.

This is how it works:

  • Let’s say customer picks up items worth INR 500 at Merchant shop and goes to the cashier for checkout
  • The cashier scans each item and generates a bill of INR 500. He generates a unique QR Code on a screen near the POS
  • Customer opens the payments app on her smartphone, scans the QR Code, and authorizes the payment
  • The cashier gets a notification that customer has made the payment and prints the sale receipt.

2. Buyer-to-Large Merchant Transactions – Merchant Scans

There is another variant to this QR Code payment method:

  • Instead of scanning a QR Code generated on the cashier’s screen, customer generates a QR Code on her app or Customer owns a card with a QR Code
  • The cashier then uses his barcode scanner to scan this QR Code and complete the payment.

3. Buyer-to-Small Business Transactions

This mode of QR Code payments applies to small businesses and retail outlets. Let’s assume they do not have barcode scanners at POS.

This is how the process works:

  • Customer picks up items worth INR 100 at a small store
  • The cashier requests her to make a payment and points at a printed QR Code near the POS
  • Customer opens the payments app, scans the QR Code, enters the amount, and authorizes the payment
  • The cashier gets confirmation via SMS

Note that in this case, the buyer enters the amount and the merchant has a permanent QR Code. This QR Code helps the buyer app to identify the merchant account.

4. Peer-to-Peer Transactions

This mode of QR Code payment applies when an individual needs to pay another. For example, friends, family members, or self-employed professionals.

What is Scan and Pay?

It is a mobile-based payment facility that enables fund transfer by scanning a quick response (QR) code using an app which supports this feature. It can be used for making payments at merchant outlets, e-commerce websites and grocery stores, among others.

How did it evolve?

Visa introduced mVisa, a QR code-based payment facility for Visa cardholders only.

In November 2016, MasterCard launched an interoperable Masterpass QR which could be used with other networks.

In India, E-wallets companies like Paytm, Mobikwik and FreeCharge also enable transactions through QR code, but both the receiver and the sender of money needs to have these mobile wallet apps.

However, QR code-based acceptance systems in the India country were largely closed until the launch of Bharat QR, a common QR code jointly developed by four major card payment companies—National Payments Corp. of India (NPCI) that runs RuPay cards, MasterCard, Visa and American Express—under instructions from the Reserve Bank of India (RBI) on 20 February.

It was a revolutionary step because of interoperability. The merchants could be identified by one QR code whether the payment is through MasterCard, Visa or RuPay. Bharat QR payments can also be made through account number with IFSC code, UPI (Unified Payments Interface) payment address or Aadhaar number.

Digital Lending – A Growing Technology!!

Lending is simply the act of giving money on credit to another person called the borrower. The borrower repays the money to the lender with interest over a defined time-period. Lending is a widely understood concept. However, the traditional approach to avail loans is fairly long and complex. Therefore, Banks and financial institutes as part of their Digital strategy trying to digitalize the lending process as well

However, today’s challenge is not digital technology; it is the enterprises’ ability to re-imagine how businesses run by harnessing digital’s power to adapt and compete.

Digital lending can start as basic as an online loan application offered by a bank or credit union on its website. It can also be as comprehensive as an entirely automated platform that includes a full suite of software, such as an online loan application, document capture, electronic signatures, credit analysis, loan pricing, loan decisioning and loan administration.

A few drivers for Digital lending adoption:

  1. Loan Origination Costs: Application for a new loan comes with a high loan origination cost. These costs are incurred due to handling the physical records, paperwork and background checks involved in approving the loan. Most of the time these costs are passed on to customers in form of processing fees
  2. Turnaround Time: The paperwork is not known for its speed and things move at their comfortable speed. Most of the cases loan disbursal using conventional lending method takes around two to three weeks, sometimes might have wait even longer
  3. Manpower Requirement: Document collection, Data entry into system, data storage / archival and retrieving documents require a lot of man power
  4. Location Constraints: Lender needs to be present at the same location to process any conventional loans, which can be a needless restriction

Therefore, most of the Banks and financial institutions have undertaken digital lending initiative in one form or other.

As mobile technology penetrates every aspect of the customer’s daily lives, banks and finance institutes are now focusing their strategy on creating mobile applications to acquire new and serve existing customers.

In these cases, the entire loan processing lifecycle (from the application boarding, supporting documents submission, real time data verification, eligibility calculation using scoring model, loan disbursement, loan repayment till loan closure) is managed through Customer Mobile application.

A few Benefits for Digital Lending:

  1. Minimal operational Requirement: Digital lending transforms the traditional process as there is minimal paperwork involved also distribution cost of physical channel gets reduced.
  2. Self- Serving channel: Bank can reach to higher number of potential customers thus increasing addressable market
  3. Quick Disbursal: The loan disbursal process has been upgraded with digital tools, As soon as the application processing is complete, the loan amount is transferred to the applicants bank account
  4. Alternative Credit Models: A lack of historic credit data makes lenders skeptical, in Digital Lending; however, your digital life is your history. Social networking profiles like Facebook, LinkedIn, and other channels may serve as surrogates for credit history.

Although Mobile app lending is a fast-growing platform, there are a few risks involved in adopting such technology. For example: Since it is a fully automated process there are possibilities of fraud injection in the process by exploiting the vulnerabilities of the application. There are also possibilities of providing fraudulent documents as verification process for documents doesn’t always involve authentication against a central database. Moreover, banks have to make a lot of changes to their existing policy and processes to implement digital lending. These challenges are delaying adoption and progress to complete digitalization.

Mobile lending application are helping banks, financial institutes and consumers equally. These applications are effective as it saves time, cut short many processes, includes features like list of other products of banks which might interest customers. Therefore, digitalization is the future for lending. The technology industry should enable quick adoption of digital lending by all Banks and Financial institution by addressing the challenges of implementation time, fraud risks and process changes through building secure applications which are highly customizable and easy to implement and at the same time highly secured with streamlined processes and improved document verification methods.

Reconciliation is the biggest challenge for Migration Projects!!

Evolving technology and a highly competitive market are pushing organizations to embrace advanced software systems to run their business and stay relevant against their competitors. Banks and financial institutes are no different to this phenomenon. The existing software & systems used for processing various business functions poses certain limitations as the business requirements evolve over time. For some software products they may be able to quickly upgrade to handle the changing requirements or need to be gradually being phased out in order to make way for a better system. Core systems are relatively difficult to replace compared to satellite systems mainly because of the involvement of huge volume of data.  The core systems are already highly customized as per the business needs and also due to multiple interfaces with other systems. This system design and architecture become extremely humongous to manage which is a necessity to fulfill day-to-day business requirements. So, Migration projects becomes a critically important project by Banks and financial institutions,

While undertaking such a core migration project, business has to perform a lot of tasks. Some of these tasks are listed below:

  • Identifying existing core functionalities
  • New functionalities requirements
  • Interface requirements
  • Environment setup
  • User Acceptance Testing
  • Reconciliation

While performing these tasks, invariably, Reconciliation activities gets lesser importance but which is one of the most critical tasks to ensure success for the project. It has been observed that in almost 90% of migration projects, planning is not done for reconciliation activity in advance.

The lower priority for this critical task causes stress in the system during the final stages of the project. The go/no-go decision for a migration project is also dependent on successful reconciliation which adds to the stress and leads to failure in most cases.

Reconciliation comes out as the biggest challenge in a migration project mainly because of the following reasons:

  • Volume of data to be reconciled

During a core migration project, the reconciliation needs to be performed between the source & destination data. That is double the volume of data that the core system handles. In the first stage, reconciliation is performed based on the reports generated from the source and destination system. A match in this stage is taken as a successful indication for the migration. But in 99% of the cases the first stage fails. In the second stage the data from source and destination are compared to find out the exact issues causing the mismatch. This is a tedious activity considering the volume of data from the two systems. Finally, the identified issues are resolved & reports are re-generated which is used for signing off the project.

  • Multiple input formats

The data from source and destination are provided as inputs in different formats – fixed length files, delimited files, database, reports etc. The data needs to be converted to a format that can be processed easily. The conversion jobs are created to handle such data. It also requires pre-validation on the data to ensure correct data is used for comparison.

  • Dependence on spreadsheets to perform reconciliation

Most business teams are dependent on spreadsheets to perform reconciliation. However, spreadsheet is a slow and non-reliable method of performing reconciliation. When the volume of data is huge, spreadsheets fail to process them and leads to lot of errors. Some organizations use database to handle the huge volume of data. But this involves creating queries which are technical and introduces dependence on IT teams.

  • Time critical

Last but not the least, reconciliations in migration projects are time critical. The entire go/no-go decision is dependent on the outcome of this activity. Any error in this process leads to additional downtime and loss of business. Most migration projects have to roll back to older systems when the reconciliation fails. Hence the success of this process is most critical and should receive its due importance.

As per Gartner 83% of migration projects fail to achieve their target. This can be reduced to a great extent if banks plan their migration reconciliation in advance and identify the points of failure well before the actual migration. The reconciliation activity is a specialized task which requires a great understanding of the data and hence business plays the most critical role in this activity. But without the use of technology it becomes the most difficult task for any business to complete this activity with an acceptable outcome.

Having executed significant number of data migration projects in the past, Verinite understands the challenges involved in the reconciliation process and is in a better position to assist banks to fulfill this task as per their expectation. Please get in touch with us at [email protected] if you want to know more about our capabilities in this

Agile Methodology – Using Agile to Build the Bank of the Future!!!

What is Agile?

Agile means the ability to move quickly and easily. In 2001, 17 software developers met to discuss some alternate lightweight development methods which will be able to adapt quickly to the changing requirements of a project. They published a Manifesto (known as Agile Manifesto), which covered how they found “better ways of developing software by doing it and helping others do it.” Any process that aligns with the concepts of this manifesto is called an Agile process.

How is it different from Waterfall?

Any agile process is based on an incremental, iterative approach. Instead of in-depth planning at the beginning of the project, Agile processes are open to changing requirements over time and encourages constant feedback from the end users. The goal of each iteration is to produce a working product.

In traditional Software development methodology like waterfall, it builds in Phase. This type of product development delivers everything at a single Phase. This approach is highly risky, costlier and generally less efficient than more Agile approaches. Any issue found in Product design and code it blocks until issue is resolved.

On other hand, Agile methodology uses short development cycles called “sprints” to focus on continuous improvement in the development of a product or service. This approach carries far less risk than Waterfall approaches and focus on delivering fully-tested, independent, valuable, small features.  As such, this diversifies the risk – if one feature goes wrong, it should not impact another feature. The work is planned in iterations and at the end of each iteration a working model is released for user review and feedback.

Over a period of time multiple methodologies were derived using Agile philosophy, characteristics and practices. But from an implementation standpoint, each has its own processes, terminology, and strategies.

A few popular Agile Software Development Methodologies are: Agile SCRUM, Kanban Software Development, Extreme Programming, Feature Dirven Development

In this blog we’ll focus only on Agile SCRUM methodology.

A few terms from Agile SCRUM lexicon

  • Product Owner – The Scrum Product Owner has the vision of what to build and conveys that to the team. He or she focuses on business and market requirements, prioritizing the work that needs to be done, managing the backlog, providing guidance on which features to ship next, and interacting with the team and other stakeholders to make sure everyone understands the items on the product backlog.
  • Scrum Master – Often considered the coach for the team, the Scrum Master helps the team do their best possible work. This means organizing meetings, dealing with roadblocks and challenges, and working with the Product Owner to ensure the product backlog is ready for the next sprint.
  • Scrum Team – The Scrum Team is comprised of five to seven members. Unlike traditional development teams, there are not distinct roles like programmer, designer, or tester. Everyone on the project completes the set of work together.
  • Sprint – A sprint is a time boxed period (typically between one and four weeks) repetition of a continuous development cycle. Within a Sprint, planned amount of work has to be completed by the team and made ready for review, where a team commits to completing a set of defined User Stories. A project is comprised of multiple sprints.
  • Sprint Planning – Before a sprint begins, it’s important that the team is all aligned, and that we have up-to-date story points for the features. The role of the Sprint Planning session is to go through the highest priority items in the Product Backlog and agree which User Stories will be included within the next Sprint.
  • Sprint Backlog – A Sprint Backlog is a list of User Stories that the team will aim to complete during a sprint. All of the User Stories will have Story Point estimates alongside them, and this total should align with velocity achieved in the previous sprints.
  • Daily Scrum meetings – The Daily Scrum is a 15-minute stand-up meeting that happens at the same time and place every day during the sprint. During the meeting each team member talks about what they worked on the day before, what they’ll work on today, and any roadblocks.
  • Sprint review meeting – At the end of each sprint, the team presents the work they have completed as a live demo rather than a presentation. Sprint retrospective meeting: Also, at the end of each sprint, the team reflects on how well Scrum is working for them and talks about any changes that need to be made in the next sprint.
  • Product backlog – The product backlog is not a list of things to be completed, but rather it is a list of all the desired features for the product. Sprint planning: Before each sprint, the Product Owner presents the top items on the backlog in a sprint planning meeting. The team determines the work they can complete during the sprint and moves the work from the product backlog to the sprint backlog.
  • Backlog refinement/grooming – At the end of each sprint, the team and Product Owner meet to make sure the backlog is ready for the next sprint. The team may remove user stories that aren’t relevant, create new user stories, reassess the priority of stories, or split user stories into smaller tasks.


In the next blog we’ll discuss more about the role of Tester in the Agile environment and what are typical challenges a Tester faces in an environment where change in requirement is always welcomed

Visa Claims Resolution (VCR) Part-II!!

In the last weeks article, we have shared the overview of Visa Claims Resolution process. The way terminology has changed and resulting in lesser number of groupings. We also coved the flow of chargebacks, how it works. In this article we are going to cover about the Allocation and Collaboration workflows, about the impact of reduced timelines, some benefits and concern

So, lets continue with the workflows:

Allocation: Fraud and authorization disputes will be processed via the allocation workflow. Automated
checks on Visa’s side will ensure the rejection of invalid disputes. Invalid disputes
could be disputes on transactions that have already been refunded or transactions with
expired timeframes that are automatically invalid. Visa will block these disputes from
becoming a chargeback. On the other hand, all disputes which are accepted by VCR will be the merchant’s liability. In that scenario, pre-arbitration is the only possibility for the merchant to object the chargeback.

Collaboration: Processing errors and consumer disputes will be processed via the collaboration workflow.
Both processing errors and the consumer disputes categories imply collaboration
and interaction between all involved parties and there is no change from the current
handling of such issues.

 Reducing Timelines: The dispute resolution timeline will be significantly reduced from earlier existing process. The process currently takes an average of 46-105 days, depending on the complexity of the case.

With VCR, industry members can expect:

  • 31-70 days for fraud and authorisation chargebacks
  • 31-100 days for customer disputes and processing error chargebacks

How Will Visa Claims Resolution Change the Dispute Process?

Visa will consolidate 22 chargeback reason codes into 4 dispute groups. Following table illustrates how the new groupings will be done as opposed to existing ones.

Fraud Authorisation Processing Errors Consumer Disputes
62 – Counterfeit Transactions 70 – Card Recovery Bulletin or Exception File 74 – Late Presentment 41 – Cancelled Recurring Transactions
57 – Fraudulent Multiple Transactions 71 – Declined Authorisation 76 – Incorrect Currency or Transaction Code or Domestic Transaction Processing Violation 53 – Not as Described or Defective Merchandise
81 – Fraud – Card-Present Environment 72 – No Authorisation 77 – Non-Matching Account Number 85 – Credit Not Processed
83 – Fraud – Card-Absent Environment 73 – Expired Card 80 – Incorrect Transaction Amount or Account Number 30 – Services Not Provided or Merchandise Not Received
93 – Merchant Fraud Performance Programme 78 – Service Code Violation 82 – Duplicate Processing 90 – Non-Receipt of Cash or Load Transaction Value at ATM
86 – Paid by other Means


This will certainly increasing the dependence on VROL. VROL will play an increasingly important role with VCR.

Before a dispute can be initiated, a Transaction Inquiry must be requested on VROL. Issuers and acquirers will no longer be required to initiate financial messages through an existing provider, as this can now be processed through VROL. There is an option for issuers and acquirers to use the existing systems and connections to submit fraud report via VROL

Positive impact to merchants after VCR:

  • Reduced reason codes
  • Reduced Representmentdecision time frame
  • Reduced dispute acceptance from customer
  • Chargeback rights removed for CVV mismatch transactions
  • Reduced chargeback dispute for cardholder

Negative Impact to Merchants after VCR:

  • Chargeback acknowledgment
  • Compelling Evidence regulated
  • Questionnaire form to file disputes
  • Chargeback Representmentfor AVS/CVV Match transaction only


The Visa Claims Resolution (VCR) by Visa has been welcoming to merchants, especially those online only merchants who are accepting Card-not-Present (CNP) transactions.

Most of the changes implemented by Visa are geared towards simplifying the dispute process and helping merchants prevent revenue loss.

However, Visa has to balance the needle and ensure it is fair for both the consumer as well as the merchant.  VCR also has some regulations for merchants, and it can affect merchants who are not used to processing chargebacks in the past.

Visa Claims Resolution (VCR) Part-I !!

Visa announced the Visa Claims Resolution (VCR) initiative to improve the dispute process.

VCR is Visa’s new system to help reduce timelines and simplify dispute resolution for issuers and acquirers. This is a mandatory change for all issuers and acquirers.

On April 15, 2018, Visa’s new rules on chargebacks, called Visa Claims Resolution or VCR came into effect. This new program has already gone live in Hong Kong and New Zealand in October 2017. Now these new rules will be migrated to all the remaining countries.

The main reason for Visa to change the existing chargeback rules was to simplify the dispute process whilst reducing not only the overall number of chargebacks but also the time to resolve these chargebacks.


VCR will have the following impact on the dispute process:

  • Simplify the dispute process by collapsing 22 chargeback reason codes to only 4 dispute groups
  • Streamline existing workflows by reducing the number of chargeback reason codes from 22 to 4:
    • Fraud
    • Authorization
    • Processing Errors
    • Consumer Disputes
  • The dispute timeframes will be reduced to provide a quicker resolution, meaning resources will be in limbo for a shorter period of time
  • The Merchant Process Inquiry will be beneficial, as the cardholder will receive details of the transaction at the first point of contact. This will reduce the number of first-cycle chargebacks submitted and representments received
  • Financial institutions will be able to eliminate invalid disputes using existing data and applying automatic, real-time liability assignment
  • There will be less chances of error through prepopulated transaction data, increasing the ‘right first time’ ratios
  • Help reduce abusive and “frivolous” usage of chargeback/claims system, lowering dispute volumes
  • Simplify the definition of specific documents and evidence required to support claims
  • Provide a better customer experience with shortened timelines for the dispute resolution.

 Does Any Terminology Change?

Yes; the basic vocabulary associated with the dispute process will change under VCR:

Current Defined Term  New Defined Term
Chargeback Dispute
Representment Dispute Response/Pre-Arbitration
Chargeback Reversal Dispute Reversal
Representment Rev/Adjustment Dispute Response Reversal

How it works:

Visa Claims Resolution was designed to change the process from a litigation-based model to a liability-assessment model:


  • Visa consolidated the existing 22 chargeback reason codes into four new groups,
    It turns out that one of the most used chargeback
    reason codes, ‘RC 75 – Transaction not recognized’, will be discontinued. Visa now requires the issuers to use the existing data in the Visa portal to assist the cardholder to recognize the transaction instead of disputing the transaction immediately. This represents a clear advantage for the merchant but could probably lead to increased chargebacks in the new fraud group. One key message for merchants to avoid disputes would be to communicate with the end-customers before issues arise.
  • Visa will be stricter on chargebacks from the same credit card. For Card-Not-Present transactions, Visa will now only allow 35 fraud chargebacks from the same credit
    card within 120 days.
  • A big change for merchants is the reduced timeframe for their response to disputes. Instead of the current response time limit of 45 days, Visa cuts this dispute-window by one-third to only 30 days and in 2019 Visa plans to reduce the 30-day window to 20 days. Merchants should be aware that the response time limit includes the reaction time of both the acquirer and the merchant, this could result in the merchant having a limited timeframe to response appropriately to the chargeback
  • Two new workflows were created to process disputes which shortened the communication between end-customers, issuers, acquirers and merchants. These two are Allocation workflow and Collaboration workflow.


We will continue on these two workflows and some more details in our next article, stay tuned!

7 Characteristics of RPA Tool!!!

Since the beginning of this decade there have been some speculations as to whether the robotic automation workforce will take over the manual tasks? Will it result in unemployment? Or does it mean making good use of robotic automation tools to benefit us all.

Various attempts are being made & we clearly see a trend where the robotic automation workforce is going to be of prime importance in banking and financial industry which is our focus area.
Many a times the primary process candidates for using robotic automation are the repetitive, manual, resource consuming processes that are routinely executed but in due course builds up process errors and manual errors. Robotic process automation can help streamline this area by way of implementing this digital workforce to our advantage.

Let’s take a look at the characteristics we should be focusing on while choosing a RPA tool.

1. Minimum Coding or Technical knowledge: When a non-technical person can use and create automation script with minimum guidance, it becomes the best solution to implement and use. The tool should offer flexibility that any user can automate the scripts. Ability to maintain and create new scripts. The tool that allows ability to create and maintain existing automation scripts is definitely a plus point. RPA solution that is designed to be as user-friendly will be the winner. Robotic process automation is aimed at bringing an intuitive interface that can easily be learned by any person.

2. Platform Independent: A tool that can run on a given operating system OS, which may be used by the bank or their employees is what is the best solution for them. RPA solution that can run on Windows OS, Linux or other standard operating system is an essential characteristic. Also, it should have ability to work across multiple browsers, namely – Internet Explorer, Chrome, Firefox, Opera, Safari, etc. This becomes highly resourceful while executing tests across various platform browsers simultaneously. Repeating tests manually is a time consuming and a costly process. Automated tests can be run repetitively at no additional costs. So, it should be a highly portable tool that runs on multiple platforms as well as browsers

3. Robust Architecture: RPA solution that follows MVC i.e. Model – View – Controller is considered as robust to support multiple features. It is a software architectural pattern for implementing user interfaces on computers. It divides a given software application into three interconnected parts. So to separate internal representations of information from the ways that information is presented to or accepted from the user. MVC offers support for rapid and parallel development. So, developing web applications using the MVC model it is possible that one developer work on the view while the another can work on the controller.

4. Performance Efficiency: RPA tool which takes less time to create and run scripts will effectively yield better performance over a period of time. Once automated, the test library execution is faster and runs in an automated state than manual execution mode. Automated testing comes as a relief for validation during various phases of a software project lifecycle. This improves communication among Developers, Designers, Product Owners, and allows potential glitches to be immediately rectified.

5. Cost Efficient: One of the essential factors for choosing RPA tool is cost, it must justify the purpose it is deployed for. Sometimes cost is sacrificed for achieving efficiency or vice-versa. A tool that manages the perfect balance is what industry gladly accepts. Also point to consider is the implementation and maintenance cost. On one hand tool implementation saves time and cost but it should not result in addition of another person or a team to maintain the well being of the tool.

6. Automation Coverage: Through the implementation of automated tests, more number of tests can be executed pertaining to an application. This leads to a higher coverage that in a manual testing approach. An increased test coverage leads to testing more features in less time and a higher quality of the SW application. An RPA tool that can schedule and run lengthy tests automatically without unattended or consuming large amount of human resources is a better candidate for selection. Automated tests can save you a lot of money! They can detect bugs before they are deployed to the production system which can prevent big damage. They can also help you to design your code in a way that makes it easy to maintain and make it scalable for the future.

7. Re-usability: Any RPA tool that is a for a single use is a disaster. The RPA tool must showcase the ability for multi-use and with relatively easy configuration changes. With some SW knowledge and technical support, it must become reusable to the extent required. Also, the ability to produce, store or integrate with other subsystems is a necessary factor in choosing RPA tool.

Some other aspects include fast, reliable, keyword driven, database supported, remote execution, scheduling features etc. to be characteristics of the automation tool. With banking industry coming to a point where everything is connected to the online world it becomes a necessity for banks to automate some of its business processes. This gives them ability to take control of the information that they have to be utilized in a better way to their benefit.

Keeping these in mind Verinite has embarked on a journey to create a robotic process automation tool that will serve fit for purpose and quick to deploy. As a bank or financial institute if you are thinking of automating business processes you have come to the right spot! Look no further, choose Veribot our Robotic automation solution that caters to your needs. Here is a link to our product that is offered in this space “”

For inquiring please connect with us, we are always happy to help!