Verifi (owned by Visa) and Ethoca (owned by Mastercard) are two leading chargeback prevention and dispute resolution services. They help merchants avoid chargebacks by providing real-time alerts when a cardholder disputes a transaction with their bank.

 1. Cardholder Initiates a Dispute

 • A customer contacts their bank (issuer) to dispute a charge, often due to fraud concerns, dissatisfaction, or misunderstanding.

 2. Real-Time Alert Sent to the Merchant

 • Instead of processing an immediate chargeback, the bank (via Verifi or Ethoca) sends a dispute alert to the merchant.

 3. Merchant Takes Action

 • Upon receiving the alert, the merchant can refund the transaction proactively or contact the customer to resolve the dispute.

 • If a refund is issued promptly, the chargeback is prevented, avoiding fees, penalties, and damage to the merchant’s chargeback ratio.

 4. Case is Closed

 • If the refund is processed in time, the bank cancels the chargeback, and the merchant avoids additional costs.