Visa Compelling Evidence 3.0: What Merchants Need to Know

In an effort to keep up with the changing landscape of payments and fraud, credit card networks make frequent changes to the rules and policies governing the chargeback process. Most of these changes are relatively minor, but every once in a while they roll out a major update. One major update Visa has implemented is Visa Compelling Evidence 3.0.

CE3.0 creates a way for merchants to handle fraud-related disputes that can be valuable for those that can meet its requirements. Let's take a closer look at this update and discuss what it means for merchants.

Table of Contents

1. What Is Visa Compelling Evidence 3.0?
2. How Merchants Can Use Visa CE3.0
3. How Well Does Visa CE3.0 Work in Practice?

What Is Visa Compelling Evidence 3.0?

Visa Compelling Evidence 3.0 is a way for merchants to fight illegitimate chargebacks by providing records of previous transactions to counter false claims of fraud.

Effective April 15, 2023, CE3.0 established a specific standard of evidence that, if met, can reverse or even prevent a chargeback under reason code 10.4: Fraud—Card-Absent Environment. The purpose of CE3.0 is to establish a clear and direct relationship between the merchant and the cardholder, proving beyond a reasonable doubt that the disputed transaction was made by the cardholder and not an unauthorized third party.

Under Visa’s previous chargeback rules, merchants could contest a reason code 10.4 chargeback by showing at least one transaction from any time period in which the IP address, email address, physical address, and telephone number match the details of the disputed transaction. For digital goods, two or more of the IP address, device ID, or email address would have to match. Visa intended for this to be sufficient evidence for the issuer to reverse the chargeback, but that was not always the case.

If they saw a valid reason for doing so, the issuer could reject the representment and the acquirer—and by extension, the merchant—would remain liable for the chargeback.

Visa consulted with merchants and issuers to come up with the criteria for contesting reason code 10.4 and proving that the cardholder participated in the transaction. CE3.0 requires merchants to provide records of two previous undisputed transactions using the same payment credentials that meet the following criteria:

• 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.
• Either the IP address or the device ID/fingerprint must match across all three transactions.
• One additional element from the following list must also match across all three transactions: IP address, device ID/fingerprint, user ID, or shipping address.

If the merchant can submit transaction data that meets all of the above criteria, the liability shifts to the issuer.

For recurring billing transactions, data elements captured during the initial customer-initiated transaction or subscription setup can be used for subsequent merchant-initiated transactions. This makes CE3.0 particularly effective for merchants who offer monthly subscriptions.

If CE3.0 is being used after a chargeback has occurred rather than through Order Insight, merchants also need to provide evidence that the goods or services were delivered to the customer.

How Merchants Can Use Visa CE3.0

Merchants can submit compelling evidence against fraud claims in the pre-dispute phase, when inquiries come in via Verifi’s Order Insight, or after a dispute has been filed and the chargeback can be looked up in Visa Resolve Online (VROL).

When a pre-dispute comes up in Order Insight, Visa pre-selects up to five transactions that are more than 120 days old and were never disputed or reported as fraud.

If the merchant can provide the required matching data elements for two of those transactions, Verifi will review the data and stop the dispute from going forward and becoming a chargeback. The issuer will be responsible for resolving the cardholder’s dispute, and the merchant’s VAMP ratio won’t be affected.

However, this data must be provided through the Order Insight system within two seconds of the request. This means merchants must be able to automate these responses, and manual review is not an option.

If the dispute has already become a chargeback and the merchant wants to fight it through the representment process, they need to identify the qualified transactions with the matching data elements, complete the necessary forms, and submit the data to VROL. A chargeback management provider can also complete this process on the merchant’s behalf. If the information submitted meets the requirements, the chargeback should be reversed.

How Well Does Visa CE3.0 Work in Practice?

Now that CE3.0 has been in effect for more than two years, the picture is encouraging but uneven. Merchant survey data suggests that the merchants who are using the program generally see value.

In a Q4 2024 Datos Insights survey of 840 global merchants, 20% said they were already using CE3.0 and another 31% planned to use it. Among the 165 merchants using CE3.0, 93% rated it effective or very effective at avoiding chargeback liability.

Adoption is highest among subscription merchants, who are more likely to have the previous undisputed transactions required. In the Datos Insights survey, 96% of subscription merchants said they were either currently using or planned to use CE3.0.

The main obstacle for merchants is data quality. CE3.0 depends on historical transaction records with matching elements such as IP address, device fingerprint, user ID, or shipping address. Many merchants don’t reliably capture this information, and even those that do may not make it readily available to internal chargeback teams or third-party chargeback management providers.

For merchants, the lesson is clear: CE3.0 is not a silver bullet, but it is a powerful tool for those prepared to use it. Merchants that want to benefit from the rule need to think beyond the dispute response itself and focus on the data collection, retention, and retrieval processes that make a successful response possible.

That means capturing the right customer identifiers, preserving transaction history, and ensuring that chargeback teams can access the evidence quickly when a dispute arrives. For merchants with recurring customers, subscriptions, or frequent repeat purchases, CE3.0 can meaningfully reduce liability from first-party misuse—but only if the groundwork has already been laid.