What is Verifi RDR (Rapid Dispute Resolution) and Why Should Merchants Care?
Chargebacks cost you time and money. Verifi Rapid Dispute Resolution is an automated system that stops disputes before they turn into chargebacks. It’s built on Visa’s network and lets you set rules to handle disputes automatically.
Instead of dealing with long dispute processes, fees, and chargeback penalties, RDR refunds certain disputes before they escalate. That means fewer chargebacks, lower costs, and better dispute ratios.
If chargebacks are cutting into your revenue, RDR is worth knowing about. Here’s how it works and why it might be a smart move for your business.
Chargebacks are Costly and Slow
Chargebacks are more than just a refund. They come with fees, lost revenue, and a dispute process that can take months. Every chargeback means you lose the sale, pay a non-refundable chargeback fee (typically $20 to $100 per case), and risk higher processing costs if your dispute ratio gets too high.
On top of that, friendly fraud is on the rise. Around 45% of chargebacks come from customers who did authorise the transaction but still dispute it. Some forget about a purchase, others regret it, and some just take advantage of the system. Fighting these disputes takes time, and merchants win only 18-30% of chargeback cases they contest.
The traditional chargeback process isn’t built for merchants. It’s slow, expensive, and puts the burden on you to prove the transaction was legitimate. That’s why Visa introduced RDR—to stop disputes before they turn into chargebacks.
What is Verifi Rapid Dispute Resolution?
Verifi Rapid Dispute Resolution (RDR) is an automated, Visa-backed system that resolves disputes before they turn into chargebacks. It was launched in 2020 as a collaboration between Visa and Verifi to help merchants handle disputes at the pre-chargeback stage, eliminating the need for time-consuming chargeback fights.
Since then, Visa has integrated RDR into its standard dispute resolution framework worldwide, covering transactions in the United States, Canada, Europe, the Middle East, Africa, and Asia-Pacific. Today, 97% of U.S. Visa issuers and 83% of global issuers support RDR, meaning the system can automatically resolve disputes for the vast majority of Visa transactions.
For merchants, this means:
- Fewer chargebacks, since resolved disputes don’t count toward Visa’s dispute ratio.
- Lower fees, because avoided chargebacks mean fewer penalties and admin costs.
- Less time wasted, since disputes are resolved instantly instead of dragging on for weeks or months.
It’s About Prevention, Not Fighting Chargebacks
Traditional chargeback management is reactive—you receive a dispute, gather evidence, and fight to recover the funds. RDR shifts this approach by making dispute resolution proactive. Instead of responding to disputes, merchants prevent chargebacks from occurring by automatically resolving disputes that meet their criteria.
For example, a merchant might set rules to:
- Automatically refund disputes under $50 to avoid unnecessary fees.
- Resolve disputes with certain reason codes (e.g., “product not received”) to keep dispute ratios low.
- Exclude high-value transactions from automatic refunds to preserve revenue on major sales.
By filtering out disputes that aren’t worth fighting, merchants can reduce chargebacks without wasting time on unwinnable cases.
How Does Verifi RDR Work?
Since Verifi RDR is designed to stop chargebacks before they happen, it mostly works behind the scenes by using pre-set rules chosen by the merchant to decide which disputes should be automatically resolved. The goal is to prevent unnecessary chargebacks and save merchants from fees, penalties, and the time-consuming process of fighting disputes.
Here’s how the process works:
1. A Customer Opens a Dispute
A cardholder contacts their bank and disputes a charge. This could be for reasons like fraud, item not received, or dissatisfaction with a product or service.
2. The Bank Logs the Dispute with Visa
Instead of immediately pushing the dispute through the chargeback process, the issuing bank submits it to Visa Resolve Online (VROL)—Visa’s dispute management platform.
3. RDR Evaluates the Dispute
If the merchant is enrolled in RDR, Visa checks whether the dispute matches any of the merchant’s pre-set resolution rules. These rules might include:
- Automatically refunding disputes under a certain amount.
- Resolving disputes with certain reason codes, such as “duplicate charge”.
- Allowing refunds for specific transaction types, such as digital goods or subscriptions.
4. Instant Resolution (or Chargeback)
If the dispute matches the merchant’s rules, an automatic refund is processed immediately, resolving the dispute before it becomes a chargeback. If, however, the dispute doesn’t match the rules, it follows the traditional chargeback process, where the merchant can either challenge the claim or accept the chargeback.
Benefits of Verifi RDR for Merchants
Verifi RDR helps merchants reduce chargebacks, save money, and simplify dispute management. Instead of handling every dispute manually, merchants can set up automated rules that resolve issues before they escalate. This means fewer fees, less time spent on disputes, and better customer relationships.
Avoid Chargeback Fees and Penalties
Every chargeback comes with a non-refundable fee, typically between $20 and $100 per dispute. If your chargeback ratio gets too high, Visa or Mastercard may place your business in a monitoring program, leading to higher processing costs, fines, or even account termination.
With RDR, disputes are resolved before they turn into chargebacks, meaning:
- No chargeback fees for disputes handled through RDR.
- No impact on your Visa dispute ratio—keeping it low and avoiding penalties.
- No risk of being flagged as high-risk due to excessive chargebacks.
Faster Resolutions = Happier Customers
When customers dispute a charge, they often expect a quick solution. Traditional chargebacks can take months to resolve, leading to frustration and negative reviews.
With RDR, disputes are resolved instantly or within 24 to 48 hours. There are no long waits or delays. Customers receive quick refunds, which can improve their experience. Ultimately, a smoother resolution process increases the chance of retaining customers instead of losing them.
Save Time and Resources
Fighting chargebacks is a major time sink. A single dispute can take weeks to resolve, and merchants typically spend 2 to 5 hours gathering documents, responding to banks, and tracking disputes.
RDR automates dispute resolution based on pre-set rules, meaning:
- No need to manually review and respond to every dispute.
- No additional staffing or admin work to track chargebacks.
- Fewer customer service hours spent handling complaints about disputes.
Global Coverage
RDR is designed to handle both fraud and non-fraud disputes, giving merchants broad coverage across different types of transaction issues. Whether a customer claims fraud, a product was not received, or a service was unsatisfactory, RDR can resolve the dispute automatically if it matches the merchant’s preset rules.
RDR is also available worldwide, covering Visa transactions in North America, Europe, Asia-Pacific, the Middle East, and Africa. For merchants with international customers, this means they can apply one unified dispute resolution strategy across multiple regions. Instead of managing different policies for different markets, merchants can rely on RDR to handle disputes consistently across all Visa transactions,
Lower Dispute Ratios
Your dispute-to-transaction ratio is a key factor in maintaining good standing with Visa and Mastercard. If too many of your transactions result in chargebacks, you risk higher processing fees, placement in a chargeback monitoring program, or even losing the ability to accept card payments. These penalties can quickly add up, making chargeback prevention a priority for any merchant.
RDR helps keep your dispute ratio low by resolving disputes before they become chargebacks. Because RDR-resolved disputes don’t count against your chargeback ratio, your overall risk remains lower. You also have control over which disputes are refunded automatically, allowing you to strategically prevent disputes that could push your chargeback rate too high. By reducing chargebacks at the source, RDR protects your business from unnecessary fees and compliance issues.
Verifi RDR In Action
On average, Visa reports a 34% drop in chargebacks for businesses using RDR. Some merchants see even greater results—JustAnswer, an online expert Q&A service, cut its disputes by over 50% after implementing RDR, keeping its chargeback-to-sales ratio below 0.9%. By preventing chargebacks before they happen, RDR helps merchants stay below Visa and Mastercard’s chargeback thresholds, reducing the risk of fines or restrictions.
Verifi RDR vs. CDRN: What’s the Difference?
Before Visa introduced RDR, the Cardholder Dispute Resolution Network (CDRN) was one of the main tools merchants used to intercept disputes before they became chargebacks. CDRN was created by Verifi before its acquisition by Visa and allowed merchants to receive alerts when a dispute was initiated, giving them up to 72 hours to manually resolve it before a chargeback was issued. While effective, CDRN required merchants to actively monitor and respond to disputes in a short timeframe.
RDR was introduced as a faster, automated alternative. Instead of requiring merchants to handle disputes manually, RDR applies preset rules and resolves disputes instantly. It is now Visa’s preferred system for pre-chargeback resolution and offers broader coverage, lower costs, and less administrative work for merchants.
Key Differences Between RDR and CDRN
CDRN was useful when merchants needed a manual review process, but RDR provides greater efficiency and broader coverage. It’s cheaper per dispute, faster to resolve issues, and eliminates the need for merchants to constantly check alerts and respond within a deadline.
Mastercard offers Ethoca alerts, which function similarly to CDRN by notifying merchants of disputes and allowing manual resolution. However, RDR represents the next generation of dispute prevention, using automation to resolve disputes with less effort, lower costs, and faster results.
In short, RDR does everything CDRN did—just faster, cheaper, and with far less work. That’s why Visa has positioned RDR as the go-to system for dispute resolution, and why merchants who previously used CDRN should transition to RDR to reduce chargebacks with less
Get Started with ChargebackStop
Reducing chargebacks and automating dispute resolution is simple with ChargebackStop. We can help you determine the best rules for your business, whether that’s blank refund coverage or a more customised approach based on value, reason code, or transaction type.
- Same-day setup: Get started instantly with automatic volume pricing.
- All-in-one platform: Manage Visa RDR and Mastercard Ethoca alerts in a single streamlined dashboard.
- Hands-free automation: No need for manual monitoring or adjustments. Our system applies the best industry practices for chargeback prevention.
Get started today with ChargebackStop and put chargeback prevention on autopilot. Learn more here or contact us for a demonstration.
