In the constantly shifting landscape of risk management and payment fraud, TC40 cases or reports are essential but frequently misunderstood. When a cardholder flags a transaction as fraudulent, issuing banks send Visa these reports, which act as a fraud signalling mechanism instead of a direct chargeback action. Despite this, a lot of merchants miss important chances to improve their fraud deflection strategies because they wrongly believe that TC40s and chargebacks are equivalent.
This difference is now more important than ever. TC40 cases now have more weight due to an update to Visa’s Acquirer Monitoring Program (VAMP). Visa is now considering more than just chargebacks under the new framework. Even if they never lead to a chargeback, fraud reports like TC40s now affect a merchant’s dispute ratio. Low-value fraud allegations can now drive merchants closer to intervention criteria, this change has raised concerns across the ecommerce industry.
It is now essential for Payment Service Providers (PSPs), Payment Facilitators (PayFacs) and international merchants to understand how TC40 data impacts acquirer relationships and fraud scores. TC40 cases have become an essential component of modern chargeback prevention and payment security strategies.
What Are TC40 Cases (and How Are They Used)?
When a cardholder claims a transaction was not authorised, the issuing banks send Visa TC40 cases, which are fraud data files. Internal fraud tracking across banks, card networks and acquirers is the main purpose of TC40s, which are a key component of Visa’s Risk Identification Service. Mastercard uses an equivalent system called System to Avoid Fraud Effectively (SAFE).
Key information such as the merchant’s name, address, merchant category code (MCC), bank information that was issued and obtained, transaction data (amount, date and time), partial cardholder information and whether or not the transaction was card-present are all included in each TC40. Crucially, not all TC40s result in a chargeback and this report is not one.
TC40 data is primarily used to track fraud exposure, not to make the chargeback process easier. This distinction is crucial for merchants since TC40s can alert card networks and acquiring banks to fraud even if they never show up in chargeback data. Additionally, Visa analyses new fraud trends using this data to improve network-wide protection tactics.
The Difference Between TC40s and Chargebacks
Chargebacks and TC40 cases can both originate from suspected fraud, but they have different functions and go through different procedures. Any merchant handling risk and disputes must be aware of these differences.
When a cardholder identifies a transaction as unauthorised, Visa’s fraud monitoring system generates a TC40 cases. Regardless of whether the transaction leads to a chargeback, this information is forwarded to Visa and the acquiring bank as a fraud record. Its goal is to educate risk rating and network-wide fraud prevention, not to resolve issues.
In contrast, a chargeback is a formal dispute procedure in which the cardholder is requesting a nullification of the original charge. Chargebacks are reported to merchants, who have the option to reply or dispute them. TC40s, however, are not automatically shared with merchants, which makes them harder to track or act on. That said, Visa does offer access through its INFORM program, which PayShield can help facilitate access to. While INFORM is a paid service, it enables merchants to access TC40 data proactively and monitor fraud cases. This visibility is especially important under VAMP, where both fraud claims and chargebacks count toward a merchant’s risk ratio. Without access to INFORM, merchants may unknowingly accumulate fraud exposure, only to discover the issue once they’re flagged as high-risk.
Why TC40 Data Matters – Risk Monitoring & Compliance
In addition to providing background data, TC40 cases are essential to the way card networks, acquirers and PSPs assess fraud risk throughout the payments ecosystem. Chargebacks provide verified financial disputes, but TC40s give a more broader picture of how frequently a merchant’s transactions are reported as suspicious.
TC40 data is specifically used by Visa as part of VAMP. Chargebacks and fraud claims, whether or not they lead to a chargeback, are included in a merchant’s ratio under the revised system. This implies that a merchant’s reputation may suffer even from refunded or fraudulent transactions that never result in official disputes.
A merchant may be subject to heightened scrutiny, harm to their reputation and penalties including higher processing costs, withheld cash, or even the termination of their merchant IDs (MIDs) if their dispute ratios exceed permitted limits. Especially if they don’t actively seek or monitor TC40 cases, merchants often do not realise they’re accruing risk until they’re already being reviewed.
Monitoring TC40 data is essential for PSPs, PayFacs and acquirers, in order to preserve network compliance and safeguard their portfolios. It enables them to quickly identify merchants who are at danger and work to enhance fraud mitigation tactics before things get out of hand.
TC40 visibility has become a crucial component of proactive risk management in the current environment, where fraud is becoming more complex and regulatory demands are rising. This is true not only for merchants but also for all parties involved in the payments landscape.
Merchant Challenges – Accessing & Interpreting TC40 Case Data
The majority of merchants have little to no direct access to TC40 cases, unless of course apart of Visa’s INFORM program. This is despite the fact that they are crucial for networks to monitor fraud exposure. TC40 cases are created by issuing banks and forwarded to Visa for internal fraud tracking, in contrast to Chargeback Alerts, which are always shared with merchants and can be addressed. When these cases are made against merchants, they are rarely informed.
The willingness of the acquirer or processor to provide the data is an important factor of access. Some might refuse completely, while others might provide limited or delayed insights, usually on a monthly or quarterly basis. As a result, many merchants are not aware of their fraud risk profile until they are placed under a monitoring programme such as VAMP or identified by an acquirer.
Some merchants use aggregators or third-party suppliers that can directly integrate with acquirers to gather and understand TC40 data in order to close this gap. Even with access, though, it takes a great deal of fraud experience to evaluate the raw data. Typically, TC40 files are large, complex and packed with internal descriptors that are hard to interpret without specialised knowledge.
More importantly, because TC40 data is not provided in real-time, merchants are unable to use it to stop fraud right away or get involved in ongoing disputes. However, despite these difficulties, comprehending and evaluating this data is still essential to spotting fraud trends early on and preventing fines or damage to one’s image.
How PayShield Supports Fraud Deflection & Risk Mitigation
Relying on TC40 data to lower fraud exposure is not a practical approach because the majority of merchants have little to no access to it. Rather, fraud deflection is the best method to reduce TC40 reports and stay under the threshold for programs like Visa’s VAMP. This involves avoiding suspicious transactions before they are executed as opposed to responding after fraud has already taken place.
PayFacs, PSPs and merchants may evaluate the legitimacy of transactions in real time with PayShield’s Transaction Risk API Tool. The API provides a real-time transaction risk score by evaluating device attributes, behavioural signals and identification data. This enables companies to stop problematic payments before they can lead to a fraud allegation.
3D Secure 2.2 (3DS) offers cardholder authentication at checkout as an extra measure of pre-transaction security. This lessens the possibility of unauthorised use by confirming that the consumer is authentic and satisfies compliance standards like Strong Consumer Authentication (SCA).
PayShield’s Chargeback Alerts and Dispute Intelligence capabilities are a last resort in case fraud somehow manages to get through. These solutions assist merchants in reducing the financial effect of chargebacks linked to fraud, automatically addressing fraud-related alerts and responding to disputes more quickly.
When combined, these tools provide companies a forward-thinking and realistic strategy for reducing fraud. This help lower the issues that TC40 cases indicate without requiring TC40 access.
Summary
Although TC40 cases are essential for card networks and acquirers to assess fraud risk, merchants find it extremely challenging to utilise them due to their restricted availability and difficult-to-interpret nature. TC40s are more about exposure than resolution, in contrast to chargebacks. Additionally, even uncontested fraud claims may have an effect on a merchant’s ratios under Visa’s revised VAMP.
Fraud deflection, or preventing fraud before it occurs, is the key to maintaining compliance and safeguarding revenue for PayFacs, PSPs and merchants. Even while TC40 data might stay hidden, there are serious repercussions if it is ignored.
PayShield offers the resources required to reduce chargebacks and fraud exposure, including automated dispute resolution, 3D Secure authentication and real-time transaction risk scoring. Proactive prevention is the best defence in a world where invisible data can impact your future.
Are you prepared to improve your approach to preventing fraud? To lower risk and safeguard your payment operations, get in touch with PayShield today.
