Visa Compelling Evidence 3.0: How to save $10M in revenue in one year 

If you’re in recurring billing, e-commerce, or digital goods, you already know that chargebacks are one of the biggest threats to revenue. Actually, the average chargeback rate for eCommerce transactions where the card isn’t physically present tends to run between 0.6% and 1%—way higher than the 0.5% fraud rate for card-present transactions.

These disputes don’t just affect individual transactions; they can erode your revenue streams and increase the likelihood of ongoing chargebacks. But what if there was a way to protect up to 15% of your revenue from fraud, automatically, and without requiring any manual intervention?

This is where Visa Compelling Evidence 3.0 comes in. It is a proactive solution that prevents fraud chargebacks at the pre-dispute stage, ensuring that legitimate transactions are shielded from disputes before they even begin.

At Solidgate, we’ve integrated Compelling Evidence 3.0 into our orchestration platform, along with AI-powered dispute representment, and seen the results firsthand. In the past year, CE3.0 helped our merchants save $10M in revenue before a single dispute was ever filed.

Let’s dive into how CE3.0 works and why it could be a key part of your strategy to protect your revenue.

What is Visa Compelling Evidence 3.0, and why is it important?

Compelling Evidence 3.0 (CE3.0), introduced by Visa in April 2023, is a new standard for defending against friendly fraud, where legitimate customers falsely claim fraud after receiving goods or services. This type of fraud is difficult to combat because it’s the cardholder who initiates the dispute, not a criminal.

Before CE3.0, merchants had to wait for a dispute to be filed before taking action. This often meant scrambling to provide evidence and hoping for a favorable outcome. 

With CE3.0, the process is reversed: merchants can submit compelling evidence, such as device ID, IP address, and login credentials, of a legitimate transaction before a chargeback is filed, making it much harder for customers to falsely claim fraud.

By leveraging real-time Order Insight (OI) communication, CE3.0 works automatically in the background, providing pre-dispute protection and reducing the risk of chargebacks.

How does Visa Compelling Evidence 3.0 work for merchants? 

CE3.0 fundamentally shifts how merchants handle fraud. Rather than waiting for a chargeback to occur, it actively prevents disputes from being filed in the first place by leveraging data from previous, legitimate transactions. 

Here’s how it works:

• Real-Time data collection: CE3.0 tracks critical data points from past transactions, such as device IDs, IP addresses, and login credentials. If the current transaction shares these same data points with previous ones, CE3.0 can identify it as legitimate before a dispute is initiated.
• Pre-dispute protection: By using these data points, CE3.0 helps prevent fraud from occurring. If the current transaction matches previous legitimate ones, the system automatically submits the compelling evidence to stop the chargeback before it can be filed.
• Automated integration: Once integrated into your system, CE3.0 runs seamlessly in the background. No manual intervention is required, and no additional steps are needed. It’s a set-it-and-forget-it solution that works automatically to protect your revenue.
• Hands-off defense: The system works quietly in the background, freeing up your team to focus on growing the business instead of constantly reacting to chargebacks.

Which disputes qualify for Visa Compelling Evidence 3.0?

CE3.0 is applicable only to disputes filed under Visa reason code 10.4: Other Fraud: Card-Absent Environment. This reason code typically indicates one of two scenarios:

• The cardholder did not authorize or engage in a card-not-present (CNP) transaction.
• A fraudulent CNP transaction was processed using an invalid account number or without the cardholder’s authorization.

Reason code 10.4 is most commonly associated with first-party or friendly fraud cases.

Real-world impact: Protecting $10M in revenue

At Solidgate, we’ve seen firsthand how CE3.0 can deliver significant value to our merchants. Over the past year, CE3.0 has helped save $10M in revenue, all before a single chargeback was ever filed.

For businesses handling high transaction volumes and recurring payments, this is a massive win. Chargebacks can cost your business not just lost revenue but also resources spent managing disputes and recovering from their fallout. With CE3.0, you get automated protection that saves up to 15% of lost revenue, freeing up your team to focus on scaling the business without the constant threat of chargebacks.

This isn’t just a tool for reducing chargeback fees—it’s a way to fundamentally protect your revenue stream and reduce the long-term costs of fraud.

How to make Visa CE3.0 work for you

If you’re already using Solidgate’s orchestration platform, Visa CE3.0 is available and works automatically once activated—no extra steps required.

To fully benefit from CE3.0, your system needs to be set up to collect and store the necessary data points for transactions. Here’s what you’ll need:

• Device data: Your system must be able to track device IDs to identify repeat usage across transactions.
• IP address tracking: You need to log and store IP addresses to confirm that the same customer is making repeat purchases.
• Login credentials: If a user logs in with the same credentials (email or user ID), this data is crucial for identifying potential fraud.
• Comprehensive payment data: Collect device details and IP addresses.
• Consistent billing descriptors: Ensure the first six characters of the billing descriptors match exactly between the submitted transaction and the disputed one.

Once these data points are captured, CE3.0 will automatically compare them to previous, undisputed transactions. If a match is found, it flags the transaction as legitimate and prevents a chargeback.

Key considerations

• Visa-only: CE3.0 applies only to Visa chargebacks. Mastercard equivalent Mastercard First-Party Trust Program is currently in the beta phase.
• Technical requirements: For CE3.0 to work effectively, your system must be capable of tracking and storing the relevant data (device ID, IP address, login credentials). If your platform isn’t set up to collect this information, CE3.0 won’t be applicable.
• Best for subscription-based and digital goods businesses: CE3.0 is most effective for businesses where user behavior is trackable, such as digital goods, subscriptions, SaaS, e-commerce, and other industries with repetitive purchases. If your business doesn’t fall into these categories, the benefits may not be as significant.

Leverage CE3.0 and protect your bottom line

Using CE3.0 in addition to AI-powered dispute representment is a sure way to take control of chargebacks and protect your revenue—especially if you handle high volumes of recurring payments and digital transactions. With Compelling Evidence 3.0, you don’t have to wait for disputes to be filed. You can stop chargebacks before they even happen, protecting your revenue, reducing manual intervention, and automating fraud prevention.

To activate CE3.0, reach out to your account manager or the Solidgate support team.