Banks suffering financial losses from writing off transaction disputes may lessen that blow with new ACI Worldwide Inc. software designed to automate what has been a time-consuming and costly process.

The Automated Dispute Manager enables issuers, acquirers, processors and payment networks to streamline the dispute-management process through workflow-based software components, the Naples, Fla.-based payment gateway provider announced Nov. 12.

“This [transaction disputes] is an area where banks lose a lot of ground,” says ACI spokesperson Rick Sheehy. “Dispute management is a function that, from an execution standpoint, has remain unchanged for years.”

Banks dealing with payment card transaction disputes between consumers and merchants often deal with paper statements, faxes and phone calls in what amounts to a lengthy and costly process, Sheehy says.

Essentially, the new dispute manager software allows banks to keep track of the process in one place at which employees in accounts payable or dispute management departments can access records with “one click of a button,” Sheehy adds.

ACI views the new software as a tool that will greatly reduce the number of disputes that financial institutions write off as losses while improving customer satisfaction by resolving disputes faster, Sheehy says.

“A perfect storm has been bubbling up with this because low-value payments with credit cards are increasing, and banks were writing off disputed charges because they were not worth pursuing if they were, say, less than 20 dollars,” Sheehy says.

ACI is addressing what has become a complex issue because of an increase in card-not-present and international transactions, says Dennis Moroney, research director and analyst with Needham, Mass.-based CEB TowerGroup.

As such, managing transaction disputes has long been a process in need of a technology boost, Moroney adds.

“The world has changed, and anything you can do to streamline a process that protects the consumer is really helpful,” Moroney says. “ACI has put a lot of time into this product and they have a good track record in payments, so I think this is a win-win.”

The Automated Dispute Manager also provides easier communication between the issuing and acquiring banks during a dispute, Moroney says. “The communication between the banks has always been a (time-consuming) problem.”

Eventually, the banks using the new software will compile some analytics and important data about the transactions, he adds.

“It will probably include some red flags to more easily pinpoint fraud as well,” Moroney says.

Toronto-based Lean Industries developed the Automated Dispute Manager, designing it to integrate with ACI’s current retail payment software.

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