CE3.0 for Subscriptions

In the world of chargebacks, false claims of fraud are a frustratingly common problem for merchants. Although these illegitimate chargebacks can be fought and reversed with the right evidence, doing so requires time and effort.

In addition, issuers often have different standards and tendencies when it comes to evaluating payment disputes. The same evidence that might convince one issuer to reverse a chargeback might not work when presented to another. To combat this, Visa created Compelling Evidence 3.0. 

What is Visa CE3.0? 

Going into effect April 15, 2023, Visa CE3.0 creates a new standard of evidence for claims of fraud that will guarantee the liability will shift to the issuer. In addition, this evidence can be used in combination with Order Insight to prevent a chargeback from occurring.  

What Evidence is Required for Visa CE3.0? 

In order to guarantee the prevention or reversal of a chargeback through CE3.0, merchants need to present two previous transactions using the same payment credentials that meet the following requirements: 

  1. The transactions must be between 120 days and 365 days old as of the dispute date. Original credit transactions may be less than 120 days old. 
  2. Either the IP address or the device ID/fingerprint must match across all three transactions. 
  3. One additional element from the following list must also match across all three transactions: IP address, device ID/Fingerprint, user ID, or shipping address.

For a complete breakdown of the requirements and how the process will work, check out our previous article on Visa CE3.0. 

How Does Visa CE3.0 Work for Subscriptions? 

When Visa provided these initial details on CE3.0, one of the major unanswered questions was how subscription merchants would be able to meet the data requirements. Given that every transaction after the first would be merchant initiated, they wouldn’t have the required data elements to match. 

While initially it appeared that subscription merchants might not benefit at all from CE3.0, later clarification by Visa has made it clear that these merchants will likely be the primary beneficiaries of the new system. 

For recurring billing transactions, merchants can submit the data elements from the initial customer-initiated transaction for all three transactions.

This means that as long as the merchant recorded the required data from the initial transaction and as long as there are two undisputed transactions between 120 and 365 days old, the chargeback will be prevented or reversed. 

One catch is that CE3.0 only applies to reason code 10.4: Fraud—Card-Absent Environment. Many subscription payment disputes are made under code 13.2: Canceled Recurring Transaction, and those disputes would still go through the normal chargeback process.  

Another downside is that chargebacks on annual subscriptions can’t be overturned through CE3.0 because the merchant won’t have two previous transactions within the required time frame. As annual subscriptions have become increasingly common, merchants will need to evaluate the benefits of an annual model versus the risk of being unable to prevent and reverse chargebacks through CE3.0. 


Overall, CE3.0 should prove to be a significant benefit to merchants who use a monthly subscription model. Unfortunately, it’s very far from addressing all illegitimate chargebacks, and merchants will still need to have a comprehensive and data-driven chargeback management strategy in order to minimize their fraud losses. 

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