Mastercard has announced plans to extend its First-Party Trust programme across the Asia Pacific region in light of a rise in “friendly” fraud cases.

Understanding “Friendly” Fraud

“Friendly” fraud refers to situations where legitimate transactions are mistakenly or intentionally contested by cardholders. E-commerce has transformed the nature of transactions, increasing the demand for transparency in payment processes for merchants and small businesses. Consumers can dispute unrecognized debit or credit card transactions, which may result in chargebacks, wherein card issuers decide on refunds.

According to Mastercard’s 2025 State of Chargebacks report, the global cost of chargebacks is projected to reach USD 42 billion by 2028, with nearly half reported as fraudulent. In the Asia Pacific region, the volume of chargebacks is anticipated to increase by 35%, which could translate into a financial burden of USD 6 billion by 2028.

Addressing Chargeback Challenges

To address these challenges, Mastercard is expanding its First-Party Trust programme to the Asia Pacific region and other areas. The initiative aims to assist businesses in managing resource-intensive issues like claims research. By enhancing data-sharing during transactions or disputes, the programme helps issuers distinguish between first-party and third-party fraud, thus improving resolution of cardholder disputes.

Enhancing Dispute Resolution

The First-Party Trust programme offers two methods for sharing updated insights: merchants can include data during the authorisation process or submit it after a transaction during disputes. This initiative aims to optimise dispute resolution through:

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

Mastercard is also collaborating with various stakeholders within the payments ecosystem to combat other forms of first-party fraud, such as refund and return abuse. In early 2025, Mastercard established a new industry working group focused on addressing these growing challenges directly.