As digital transactions surge, so too has a deceptive and costly form of financial dispute known as “friendly” fraud—where a legitimate purchase is later contested by the cardholder, either by mistake or with intent to deceive.
To tackle this growing issue, Mastercard is scaling its First-Party Trust program beyond the United States, extending it to markets across Canada, Latin America, the Caribbean, and the Asia-Pacific region.
Friendly fraud—technically classified as first-party fraud—occurs when a consumer disputes a legitimate charge, often claiming they did not authorize the transaction. This can stem from forgetfulness, miscommunication within households, or deliberate misuse of the chargeback system to gain a refund while keeping the product or service.
Financial impact
The financial toll is significant. Mastercard’s 2025 State of Chargebacks report estimates that global chargeback costs to merchants could reach $42 billion by 2028, with almost half categorized as fraudulent.
For small businesses in particular, chargebacks can be resource-draining and deeply disruptive.
To address this, Mastercard’s First-Party Trust program uses data-sharing technology to help merchants and financial institutions quickly differentiate between genuine fraud and contested but valid transactions.
It provides card issuers with enhanced insights—such as transaction history, delivery data, device identification, and geolocation—either at the point of sale or when a dispute arises.
“Businesses are increasingly able to create new consumer experiences, which underscores the need for a clear framework to manage complex disputes,” said Johan Gerber, Mastercard’s executive vice president and global head of Security Solutions.
First-Party Trust program
“The First-Party Trust program supports businesses and banks by facilitating the exchange of evidence, streamlining the dispute resolution process and making it more time and cost-efficient.”
The program outlines new protocols to define what constitutes “compelling evidence” for resolving chargebacks.
Merchants that comply with the program’s data-sharing standards may also benefit from additional chargeback protection, helping shield them from costly and preventable disputes.
The initiative is part of Mastercard’s broader campaign against first-party fraud. In addition to enhancing transaction transparency, the company launched a new industry working group earlier this year aimed at curbing other abuse tactics like fraudulent returns and refund scams.
“Mastercard’s First-Party Trust program demonstrates the power of industry collaboration in action,” said John Drechny, CEO of the Merchant Advisory Group. “Developed in close partnership with our members, this initiative reflects our shared commitment to reducing fraud and improving the transaction experience for merchants and consumers alike.”
As global commerce grows ever more digital, Mastercard’s expansion of the First-Party Trust program signals a strong step toward restoring trust between merchants, banks, and their customers—ensuring that the convenience of online shopping doesn’t come at the cost of fairness.
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