Visa reason code 10.3: what it means and how to respond

What Visa reason code 10.3 means and when it applies

Visa reason code 10.3, “Other Fraud – Card-Present Environment,” is filed when the cardholder denies authorizing or participating in a key-entered transactionAlso called a keyed transaction. It is an in-person sale where the card data is typed into the terminal instead of the magnetic stripe or chip being read. in a card-present environmentA transaction completed with the physical card at the point of sale, including when the card data is keyed into the terminal, as opposed to an online or telephone purchase..

For a transaction to qualify for code 10.3, all of these facts must be present:

1. The cardholder denies the purchase. The cardholder states that they neither authorized nor participated in the transaction.
2. The card data was keyed in. The sale was not recorded as a magnetic-stripe swipe or chip read.
3. The transaction was classified as card-present. If the purchase was completed online, by mail, or by telephone, it took place in a card-absent environment and the applicable code is 10.4.

Source for the requirements: Visa Core Rules §11.7.4.1, Table 11-20 (ID# 0030245).

Even when all three facts are present, code 10.3 is invalid if at least one condition in Table 11-22 applies. The two conditions involving previously reported Fraud Activity are independent: the exception for fraud types C and D or declined transactions limits one ground, but it does not cancel the separate ground that invalidates a credential reported with fraud type 3, C, or D.

The delayed-charge exception applies only when all of these records are present: message reason code 3902 in field 63.3, a Transaction ID in field 125 or 62.2 linking the charge to an earlier stay, trip, or rental, and an Electronic ImprintA record created when the magnetic stripe or chip is read and the card data is captured or imprinted at the point of sale. obtained during the same period. The other independent alternatives appear in this page’s invalidity panel.

Source for the invalidity conditions: Visa Core Rules §11.7.4.3, Table 11-22 (ID# 0030247). Definitions: Visa Core Rules §4.14.4.2 and Glossary, IDs 0024593, 0030053, and 0030586.

In practice, code 10.3 covers in-person fraud recorded as manual key entry. If the magnetic stripe or chip was read, the authorization data can disprove the central fact behind the code. If the case involves the EMV liability shift, see 10.1 for a counterfeit card or 10.2 for a lost, stolen, or not-received card.

Who files the dispute and what happens next

The issuer, the bank that issued the card, files code 10.3 in VROLVisa Resolve Online is Visa’s system where the issuer files the dispute and the acquirer submits the response and case documents.. Before filing, the issuer must have reported the Fraud Activity to Visa. It must also formally certify that the cardholder denies authorizing or participating in the transaction. That certification is stored in the dispute record; it is not a letter from the cardholder.

The issuer has 120 calendar days from the Transaction Processing Date to file the case. These requirements are cumulative: the prior fraud report does not replace the cardholder certification, and neither replaces the deadline.

Source for filing the dispute: Visa Core Rules §11.7.4.2, Table 11-21 (ID# 0030246), §11.7.4.4, Table 11-23 (ID# 0030248), and §11.7.4.5, Table 11-24 (ID# 0030249).

When the issuer files code 10.3, Visa initially assigns financial responsibility to the acquirer, the institution that represents the merchant in the network. The merchant gives its documents to the acquirer, and the acquirer tries to shift that responsibility through a Pre-Arbitration AttemptThe acquirer’s formal request for the issuer to reconsider the dispute before the case proceeds to a Visa decision.. Code 10.3 has no separate representment step.

The acquirer has 30 calendar days from the Dispute Processing Date to submit the attempt. It is not available if the merchant already accepted the case through Rapid Dispute ResolutionVisa’s automated process in which the merchant accepts the dispute before pre-arbitration. After acceptance, this response path is no longer available.. If the issuer declines the Pre-Arbitration Attempt, the acquirer may escalate the case to Visa within 10 calendar days of the response Processing Date.

Source for the process: Visa Dispute Management Guidelines for Visa Merchants, pp. 5–6. Source for the response deadlines: Visa Core Rules §11.2.2, Table 11-1 (ID# 0030212), and §11.7.4.6, Table 11-25 (ID# 0030250).

How to reduce the risk of this reason code

Visa recommends three steps to prevent new 10.3 disputes:

1. Read the card for card-present sales. Use the magnetic stripe or chip as required for the transaction instead of keying in the card data for convenience.
2. If the card cannot be read, take a manual imprintA physical impression of the card’s embossed data made with a manual imprinter. A pencil, pen, or crayon rubbing and a photocopy are not valid.. Obtain it at the point of sale and keep a legible copy. This response does not apply to transactions in the Europe Region.
3. Train staff to handle terminal failures. Staff should follow the acquirer’s procedures for reading or keying the card and retaining the records.

Classify the transaction environment correctly as well. A purchase made online, by telephone, or by mail does not become card-present because its data was later keyed into a terminal. Recording it in the wrong environment may lead the issuer to file the wrong dispute code.

Source for causes and prevention: Visa Dispute Management Guidelines for Visa Merchants, Condition 10.3, p. 22. Source for the imprint definition and validity: Visa Core Rules, Glossary, IDs 0024593, 0024713, and 0024815, and §11.7.4.6, Table 11-25 (ID# 0030250).