After a successful launch in the U.S., Mastercard is expanding its data-driven First-Party Trust program to counter the rise of first-party or “friendly” fraud, where genuine transactions are mistakenly or intentionally challenged by cardholders.
E-commerce has revolutionized the transaction experience while also increasing the need for transparency of payments for merchants, small business owners and entrepreneurs. It is now easier than ever for a customer to dispute a debit or credit card transaction they don’t recognize. The card issuer must then determine whether to provide that cardholder with a refund for the transaction amount— this is known as a chargeback.
The global cost of chargebacks to merchants is forecasted to rise to $42 billion by 2028, with nearly half being reported as fraudulent, according to Mastercard’s 2025 State of Chargebacks report.
To help combat this issue, Mastercard is expanding its First-Party Trust program to Canada, Latin America, the Caribbean and across the Asia Pacific region.
The program assists businesses both big and small with burdensome time and resource-intensive issues, such as researching and addressing claims. It provides enhanced data-sharing, either at the time of transaction or at the time a dispute is raised. Issuers can better identify third-party fraud, where someone's details are used without consent, from first-party fraud and gain reliable information to resolve cardholder disputes.
“As e-commerce continues to evolve, businesses are increasingly able to create new consumer experiences, which underscores the need for a clear framework to manage complex disputes,” said Johan Gerber, executive vice president, global head of Security Solutions at Mastercard. “The First Party Trust program supports businesses and banks by facilitating the exchange of evidence, thereby streamlining the dispute resolution process and making it more time and cost-efficient.”
The program offers two methods for sharing these enhanced insights between merchants and card issuers. Merchants may include enhanced data during authorization or submit it post-transaction during the disputes process. The program aims to improve dispute resolution using:
Enhanced signals for issuers that offer greater insight into the cardholder’s purchase history, device details, delivery information, identity elements and geographic location
New rules defining compelling evidence to identify genuine purchases and prevent unnecessary flawed disputes, including merchant chargeback protection for disputes adhering to First-Party Trust data sharing requirements
Beyond this initiative, Mastercard continues to collaborate with partners across the payments ecosystem to combat other forms of first-party fraud, such as refund and return abuse. As part of these efforts, Mastercard introduced a new industry working group earlier this year to address this growing challenge head-on.
“Mastercard’s First-Party Trust program demonstrates the power of industry collaboration in action,” said Merchant Advisory Group CEO John Drechny. “Developed in close partnership with Merchant Advisory Group members, this initiative reflects our shared commitment to reducing fraud. This improves the transaction experience for merchants and consumers alike. We’re proud that many of our members continue to contribute through Mastercard’s working group, helping shape solutions that drive trust and transparency across the ecosystem.”