Despite the increasing popularity of protective software today, Visa's (V.US) number of credit card disputes continues to rise post-pandemic as fraud grows alongside e-commerce and inflation. Data provided by the payments company shows that disputes on the Visa network increased to more than 90 million in 2022. In comparison, more than 70 million dispute cases were filed in 2019, a 24% increase during the 2020 epidemic, and an increase of approximately 2% each year in 2021 and 2022.

Although consumers often file such lawsuits, making them one of the most common cases of credit card fraud, such disputes remain an opaque segment of the payments industry. Mastercard (MA) and American Express (AXP) both declined to provide dispute data. Visa and Mastercard both acquired dispute prevention companies Verifi Inc. and Ethoca Ltd., respectively, in 2019 and regularly promote their products at conferences.


Dealing with disputes can be costly and cumbersome for credit card companies and merchants, and when disputes result in chargebacks, chargebacks can cost merchants dearly—it costs merchants about $2.40 per dollar involved in a dispute, according to Visa's Verifi, and as much as $3.36 per dollar involved in a dispute, according to Mastercard's Ethoca.

A survey by dispute automation startup Just Ltd found that more than three-quarters of consumers in the UK and US had filed a dispute in the past year, but there was no clear consensus on who would foot the bill.

The rise in disputes has been widely attributed to the ongoing shift to online shopping since the start of the coronavirus pandemic and, to a lesser extent, rising inflation. Some retailers, including giants such as Walmart (WMT), even recommend that customers use credit card dispute systems to resolve chargeback disputes instead of handling them in-house. The number of Google searches for “credit card disputes” has also increased since 2019.


However, on the other hand, this will benefit public companies such as Riskified Ltd. (RSKD) that are trying to eliminate credit card fraud. The Tel Aviv-based company, which has partnered with brands including Prada (01913), GoPro Inc. (GPRO.US) and Peloton (PTON.US), expects revenue to grow about 15% this year. Venture capital is taking notice, too—Justt raised $70 million in funding rounds in 2021.

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