Mastercard broadens its tech efforts to address "friendly" fraud across new markets.

Mastercard broadens its tech efforts to address “friendly” fraud across new markets.

2025-07-03

Mastercard has announced plans to expand its First-Party Trust program into the Asia Pacific region as a response to an increase in “friendly” fraud incidents.

Understanding Friendly Fraud

“Friendly” fraud refers to situations where legitimate transactions are erroneously or intentionally disputed by cardholders. The rise of e-commerce has transformed the transaction landscape, enhancing the need for payment transparency for both merchants and small businesses. Cardholders can dispute unrecognized debit or credit card transactions, which could lead to chargebacks, where card issuers decide on refunds.

The global cost of chargebacks is projected to reach USD 42 billion by 2028, with nearly half of these being fraudulent disputes, according to Mastercard’s 2025 State of Chargebacks report. The Asia Pacific region anticipates a significant 35% increase in chargeback volumes by 2028, amounting to costs of USD 6 billion. Targeted solutions are thus essential.

Enhancing Dispute Resolution

To address these challenges, Mastercard is expanding its First-Party Trust program into the Asia Pacific region and other areas. This initiative aims to support businesses by assisting with resource-intensive issues like claims research. By sharing data during transactions or disputes, the program enables issuers to distinguish between first-party and third-party fraud, thereby improving the resolution of cardholder disputes.

Implementing Insights for Dispute Resolution

The program offers two ways for merchants to share updated insights with card issuers. Merchants can either include this data during the authorization process or submit it later during disputes. This initiative seeks to optimize dispute resolution through:

Enhanced signals for issuers that provide deeper insights into the cardholder’s purchase history, device details, delivery information, identity elements, and geographical location.
New rules defining compelling evidence to distinguish genuine purchases from fraudulent ones, helping to prevent unnecessary disputes. This includes merchant chargeback protection for disputes that comply with First-Party Trust data sharing standards.

Mastercard is also partnering with stakeholders throughout the payments ecosystem to address other forms of first-party fraud such as refund and return abuse. An industry working group dedicated to tackling this challenge was launched earlier in 2025.