Mastercard is rolling out its First-Party Trust program in Asia Pacific as chargebacks tied to friendly fraud continue to grow. The move comes after the program’s launch in the US and will also cover Canada, Latin America, and the Caribbean.

Friendly fraud—also called first-party fraud—happens when a cardholder disputes a real transaction. Some customers do it by mistake, others do it intentionally. In both cases, the card issuer has to investigate and decide whether the money should be refunded. That process is called a chargeback.

Chargebacks are becoming more common in digital payments, especially as online shopping becomes the norm. While convenient for consumers, these disputes can be time-consuming and costly for businesses. Mastercard’s latest figures suggest that merchants could lose as much as $42 billion globally by 2028 due to chargebacks. Nearly half of that is linked to transactions flagged as fraudulent. In Asia Pacific alone, chargebacks are expected to rise 35%, with associated costs reaching $6 billion over the same period.

The First-Party Trust program is meant to help businesses deal with this problem by improving how data is shared between merchants and banks. It gives issuers more details during a transaction or at the time of a dispute, which can help them figure out whether a chargeback is justified and whether the issue involves real fraud or a dispute from the cardholder.

Businesses often struggle to resolve these cases. They have to gather transaction records, delivery confirmations, and other proof to contest the claims. Mastercard says the program can reduce the time and cost of that work, giving banks and merchants better tools to handle disputes.

Johan Gerber, Mastercard’s executive vice president for Security Solutions, said the growing complexity of digital payments makes it important to have clearer rules around dispute handling. He said the program supports both merchants and banks by improving the way evidence is exchanged during the chargeback process.

In Asia Pacific, the rollout is especially aimed at helping small businesses that may not have the staff or systems to deal with ongoing fraud claims. Matthew Driver, executive vice president for Services in the region, said more digital payments also mean a stronger need for trust. He said giving merchants access to better tools and clearer data helps them resolve problems faster and stay in good standing with customers.

Merchants in the program can choose to share data in two ways: they can add it during the purchase when the card is authorised, or send it later during the dispute process. The goal is to improve how banks assess a claim using:

• Signals tied to the customer’s previous purchases, delivery details, device use, and location.
• New rules that spell out what counts as strong evidence, giving merchants some protection if they meet the program’s data-sharing standards.

The program also addresses other types of first-party fraud. Mastercard has been working with partners to tackle growing issues like refund abuse and fake return claims. Earlier this year, the company formed an industry group focused on these challenges.

John Drechny, CEO of the Merchant Advisory Group, said the program reflects efforts between Mastercard and its partners to reduce fraud and improve how merchants and consumers handle payments. He said several members of the group have helped shape the First-Party Trust program and continue to provide input through Mastercard’s working group.

The program’s expansion comes as more companies look for ways to reduce dispute costs and protect against false claims. With chargebacks continuing to climb in many parts of the world, especially in regions with growing e-commerce markets, tools that make the process more efficient are likely to see stronger demand.

(Image by Kris)

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