Why Manual Dispute Handling no Longer Works in 2025
Chargeback volumes are increasing in every major market, and with customers filing disputes at an unprecedented rate, manual workflows can no longer keep up. In 2025, issuers are attempting to reduce response windows and younger digital-native buyers anticipate rapid replies. For PSPs, PayFacs, and high-volume merchants, this widens the gap between dispute start and timely response.
Traditional systems like as support tickets, refund queues, back-and-forth email threads, and case-by-case reconciliation were never intended to manage thousands of Chargeback Alerts or chargebacks arriving in real time. By the time a staffer evaluates an issue, it is frequently too late. The chargeback has already been lodged, the chargeback/dispute ratio has increased, and operational costs continue to rise.
This is why chargeback prevention and dispute resolution automation have become critical. For businesses processing at scale, decreasing high-volume chargebacks isn’t about working more. It’s about having the systems and solutions setup to respond automatically, before disputes turn into chargebacks.
What “Automated Dispute Resolution” Actually Means
Most merchants believe that “automation” just implies giving refunds faster. However, actual automated dispute resolution is significantly more sophisticated. In 2025, automation is characterized by three fundamental pillars that enable PSPs, PayFacs, and high-volume merchants to avoid disputes before they become chargebacks.
1. Real-time signals
Disputes now start at the issuer level, frequently before a chargeback is officially recorded. Automated technologies deliver fast Alerts from networks such as Verifi (Visa) and Ethoca (Mastercard), providing retailers a critical pre-chargeback window to act. These signals enable merchants to respond in seconds, not hours or days.
2. Rules-based decisions
Automation is based on established logic, including refund rules, product-level thresholds, dispute categories, BIN-specific processing, subscription logic and more. These rules specify how the system should respond when an Alert arrives. There is no human triage. There are no manual queues. There is just immediate action that is consistent with merchant’s policies and needs.
3. Instant issuer communication
The entire value of pre-dispute automation is based on sending a resolution to the issuer immediately. Whether it’s a refund, cancellation, or dispute deflection, automated workflows ensure that the issuer ends the situation before it becomes a chargeback. This occurs automatically using the tools we will cover shortly.
This is the core of current automated chargeback procedures and real-time dispute resolution, which is why pre-dispute technologies have become critical infrastructure in today’s payment ecosystem.
The Two Most Critical Automation Tools in 2025
As dispute volumes increase and issuer windows decrease, two automation technologies have become essential for PSPs, PayFacs, and high-volume merchants in the United States, Europe, and Asia Pacific. Each addresses a distinct aspect of the pre-dispute landscape, and together they form a coherent, completely automated resolution flow.
Verifi Rapid Dispute Resolution (RDR)
RDR operates upstream, at the issuer level. When a qualifying dispute category is triggered, such as product not received, subscription confusion, or cancellation-related issues, the issuer initiates a real-time RDR request. Instead of proceeding with a chargeback, the transaction can be returned immediately depending on merchant-defined restrictions.
This stops the dispute from ever entering the chargeback lifecycle, safeguards dispute ratios, reduces extra operation costs and eliminates unnecessary representation fees. For high-risk or subscription-heavy merchants, RDR removes a significant amount of predictable, low-value disputes that would otherwise eat into margins.
PayShield’s Dispute Intelligence
While RDR covers a subset of networks, many disputes can still enter the ecosystem via Ethoca and Verifi CDRN Alerts, as a result of them covering the majority of networks PayShield’s Dispute Intelligence is especially useful in this situation.
Dispute Intelligence automates processes that formerly needed full operational teams… this includes automating refund decisions, Alert processing, merchant routing, reason-code mapping and policy enforcement. It applies rules-based logic to each incoming Alert, determining whether to refund, escalate, warn merchants, or suppress duplicates, all without administrative intervention.
How They Work Together
- RDR intercepts eligible disputes before the issuer files anything.
- Dispute Intelligence handles all other pre-dispute Alerts with automated workflows.
The end result is a unified automation layer that addresses all aspects of high-risk merchant chargebacks, enabling predictable, scalable dispute resolution across worldwide marketplaces.
How RDR Works: Instant Prevention at the Issuer Level
Visa’s Rapid Dispute Resolution (RDR) is one of the most effective pre-dispute tools and Chargeback Alerts available in 2025, intercepting and stopping disputes before they enter the chargeback system automatically. Instead of allowing a dispute to evolve into a TC40 or TC15 filing, the issuer sends the matter to the RDR network the moment the cardholder seeks to file a complaint.
Here’s what happens behind the scenes:
When a customer files a dispute, the issuing bank determines if the merchant participates in RDR. If they do, the issuer determines if the dispute comes under an acceptable category, such as merchandise not received, subscription cancellation issues, duplicate billing, or common service dissatisfaction claims. For these categories, the transaction is routed through the RDR procedure rather than proceeding to a formal chargeback.
The decision is determined promptly by the merchant’s specified RDR requirements, which normally result in a quick refund. Because the issuer never files a TC40 or TC15, and no chargeback is issued, the merchant is completely immune to ratio damage. The reimbursement is processed using the RDR framework, protecting the merchant’s dispute ratio without the need for representation.
RDR is becoming crucial for industries with naturally high dispute rates. Examples include subscriptions, digital goods, nutraceuticals, gaming and recurring billing plans. These sectors generate a high number of predictable, low-friction disputes, which RDR resolves before they become operational or compliance concerns.
For PSPs, PayFacs, and high-volume merchants, RDR is more than simply a convenience; it is a critical preventative tool for portfolio stability at scale.
How Dispute Intelligence Automates Everything RDR Misses
While RDR automatically resolves disputes at the issuer level, it is only applicable to those transactions that are covered by RDR. Everything outside of that scope, particularly disputes that reach Verifi CDRN or Ethoca Alerts, requires prompt attention. PayShield’s Dispute Intelligence is especially useful in this situation.
Dispute Intelligence aims to fully automate the Chargeback Alert ecosystem. When an issuer issues a Verifi CDRN or Ethoca Alert, the merchant (or platform provider) typically has just a short time to reply. If you miss that window, the Alert will become a chargeback. Dispute Intelligence reduces human labor by applying rules-based automation to each Alert received.
The system examines each alert based on merchant-defined logic, order type, product, customer history, refund thresholds, subscription status, and fulfillment data before automatically executing the appropriate reaction. This could include offering an instant refund, sending the case for review, or suppressing fulfillment, or flagging dangerous customers for future transactions.
Because these Alerts are the last line of defence before a formal chargeback, automation ensures consistency, timeliness, and global coverage. If RDR prevents issuer-level escalation, Dispute Intelligence is able to catch the majority.
For high-risk verticals, subscription brands, and any merchant with significant Alert volume, the combination of RDR with Dispute Intelligence delivers a genuine auto-resolution engine, eliminating chargebacks before they reach dispute ratios that would end up affecting your Merchant IDs (MIDs).
What PSPs, PayFacs & Merchant Aggregators Should Automate First
For PSPs, PayFacs, and merchant aggregators with big portfolios, dispute automation does not have to begin everywhere at once. The quickest wins result from focusing on the processes that cause the most operational drag and the chargebacks that are easiest to prevent.
The first stage is to automate low-value, high-frequency disputes using Verifi Rapid Dispute Resolution (RDR). These are instances in which defending the chargeback costs more than the transaction itself. Automating these reimbursements immediately removes them from TC40/TC15 reporting, keeping businesses safely below VAMP ratio thresholds.
Next, automate all incoming Alerts using PayShield’s Dispute Intelligence. Verifi CDRN and Ethoca Alerts operate on short reaction times; missing even one can result in a chargeback. Rules-based automation ensures that every Alert is handled within seconds, regardless of volume or timezone.
Next, outline refund logic for both RDR and Dispute Intelligence, including high-risk product categories, high-dispute areas, and subscription renewals. This avoids unnecessary disputes and prevents avoidable escalation.
Finally, automate escalation channels, assigning complicated or high-value cases to the appropriate internal teams and ensuring that all dispute data feeds back into your overall risk rating structure. This helps to detect recurring offenders and improve fraud controls over time.
The end result is a cleaner portfolio, fewer missed Alert processing deadlines, and a scalable dispute resolution strategy designed for modern transaction volumes.
Why PayShield Is the Automation Layer You Need
PayShield provides the automated infrastructure required by modern payment providers to maintain control over dispute ratios in the United States, European, and Asia Pacific markets. PayShield’s deep integrations into the Verifi and Ethoca networks enable true real-time dispute resolution, allowing merchants and platforms to respond in seconds rather than hours.
At the core of our offering is Dispute Intelligence, PayShield’s automated refund engine designed to process Verifi CDRN and Ethoca Alerts instantly. It uses merchant-defined logic to identify situations, issue refunds, and route exceptions, ensuring that high-volume settings never miss an alert or exceed a response window. This results in a consistent, automated approach that reduces the manual burden while maintaining flat dispute ratios even during seasonal or campaign-driven spikes.
PayShield also provides portfolio-level analytics for PSPs and PayFacs managing big portfolios, allowing them to easily identify high-risk merchants, recurring dispute behaviour, and sectors that require specific automation rules. PayShield serves as a bridge between issuers, networks, and merchant systems, thanks to its global coverage and customizable integration options.
In a world where chargebacks occur quicker than manual teams can respond, PayShield delivers the automation layer that ensures disputes are intercepted, handled, and prevented at scale.
Summary
Chargebacks are not slowing down, instead they are accelerating. Manual workflows are no longer sufficient to protecthigh-volume merchants and payment platforms as issuers move quicker, customers dispute more frequently, and real-time networks become the new standard. Businesses that automate early, such as RDR for low-value disputes, Dispute Intelligence for all other Alerts, and utilise rules-based reasoning, will be the ones that avoid chargebacks before they reach ratios.
If you are a PSP, PayFac, or enterprise merchant operating in the United States, Europe, or Asia Pacific, now is the time to upgrade your dispute automation infrastructure.
Speak with PayShield today to learn how automated RDR processes and Dispute Intelligence can help prevent chargebacks, protect revenue, and future-proof your transaction processing.
