Cardholders could face higher scrutiny worldwide as First-Party Trust program goes global.
Mastercard is rolling out its First-Party Trust initiative across global markets in an aggressive step to curb first-party fraud, also known as friendly fraud. The program, which launched as a pilot in the U.S., Canada, and Brazil in 2023, uses data-sharing tools and behavioral analysis to hold cardholders more accountable when they falsely dispute valid transactions.
According to Mastercard, over 75% of all fraud claims in some markets are now suspected to be first-party misuse. These are cases where cardholders knowingly or negligently dispute charges they made themselves, often claiming they didn’t authorize the purchase or never received the item. The First-Party Trust framework aims to reduce these false claims by flagging repeat offenders and improving the flow of transactional data between banks and merchants.
The global launch will allow merchants, issuers, and acquirers to participate in a shared network that identifies patterns of abusive behavior. If a cardholder consistently files invalid disputes, that history can now follow them across issuers and borders.
“This is about driving accountability for all players in the ecosystem,” said Chris Reid, EVP of Identity Solutions at Mastercard. “We’ve historically leaned on merchants to prove innocence. Now, we’re starting to ask more from cardholders, too.”
What the Global Expansion Means for Merchants
Merchants are often left absorbing chargeback losses even when they have fulfilled the order as promised. The new initiative gives them access to better tools to flag potentially abusive disputes before they turn into formal chargebacks.
Mastercard will not only give dispute data more visibility but will also rely on artificial intelligence to detect patterns of misuse. According to Mastercard’s announcement, participating merchants and issuers will be able to use these insights to “preemptively resolve” disputes that show signs of abuse, ideally keeping them out of the chargeback system entirely.
This is particularly significant in high-risk sectors like digital goods, gaming, travel, and subscription services, where friendly fraud has surged in recent years. A 2024 report from Ethoca, a Mastercard company, found that friendly fraud rates in subscription models have grown over 36% year over year, largely due to trial abuse and consumer denial of services received.
Cardholders Will Now Carry a Reputation
One of the key shifts in this initiative is the idea of a persistent fraud risk score tied to individual cardholders. Mastercard has not shared exact scoring formulas, but participating banks and merchants can use this risk data to guide how disputes are handled. In some cases, repeat offenders could face denied claims before they even pass through the traditional chargeback process.
Cardholders may not be aware that “just clicking dispute” on a banking app creates a permanent digital trail. Mastercard’s model is designed to track that trail and use it as a trust signal or a warning flag.
It’s a reversal of the previous model, where banks often approved cardholder claims without verifying whether the merchant had met their obligations. Now, cardholders will need to demonstrate more transparency, especially if they’ve disputed the same merchant more than once.
Experts Expect Pressure to Rise on Issuers
Issuers, who often approve disputes to protect customer satisfaction, may feel more pressure to align with the new standards. According to Javelin Strategy & Research, financial institutions reported $3.1 billion in losses from first-party misuse in 2022 alone. The lack of consequences for false claims has contributed to that number rising year over year.
With First-Party Trust, Mastercard is essentially shifting some of the fraud liability toward cardholders and banks. This could influence how banks evaluate claims internally, especially if reputational risk is attached.
Why This Could Be a Turning Point for Dispute Abuse
This move comes at a time when regulators and networks are reevaluating how fraud is classified. False claims have blurred the line between criminal fraud and consumer abuse. Mastercard’s framework attempts to address that by creating consistent signals that separate legitimate victims from dishonest users.
If widely adopted, First-Party Trust could reduce false chargebacks and lower dispute ratios for honest merchants. But the effectiveness of this system will depend on global cooperation. If even a few large banks or acquirers choose not to participate, fraudsters may still find gaps to exploit.
Be Prepared for First-Party Trust Scrutiny with Chargeblast
With Mastercard’s new rules raising the bar on dispute resolution, it’s more important than ever to have a system that flags risky transactions before they become chargebacks. Chargeblast helps merchants track fraud patterns, automate evidence collection, and fight friendly fraud effectively, so you're not left holding the bag when the rules change.
