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Functional changes overview

Updated on June 14, 2023

Scheme and regulatory references

  • Application: Pega Smart Dispute for Issuers
  • Schemes Impact: Visa, Mastercard, Maestro
  • Dispute Condition Impact: Fraud and non-fraud

Regulation II (Reg II), also known as Debit Card Interchange Fee and Routing Rules, is a US Federal regulation that establishes guidelines for the processing of debit card transactions and the interchange fees charged by banks to merchants when customers use their debit cards to make purchases. Reg II also requires that issuers of debit cards provide more than one unaffiliated network to the merchant for routing transactions. Pega Smart Dispute for Issuers enables Issuers to implement Reg II functionality for Visa, Master Card, and Maestro cases in the application to comply with regulations during the chargeback process.

Pega Smart Dispute for Issuers addresses the implementation of Reg II through the following:

  • Enable or disable Reg II in the application.
  • Identify Reg II eligible transactions that are subject to dispute resolution by evaluating the network ID through which the transaction is processed as defined in the regulation.
  • Qualify dispute and Qualify fraud claim screen changes to process single transaction and bulk processing for transactions subject to Reg II for both fraud and non-fraud scenarios.
  • Evaluate the transactions subject to Reg II and route corresponding dispute cases to the respective work queues for further processing outside of Pega Smart Dispute. Once the processing is complete, track the resolution in Smart Dispute with an appropriate resolution option for claim processing.
  • Generate a report specifying all the dispute cases those are transactions subjected to Reg II grouped by the new work queues named after the processed networks such as Interlink, Maestro, and General.


Reg II applies to all Issuers that meet the following criteria:

  • Debit card transactions
  • US domestic transactions
  • Card not present transactions
  • Cross network transactions (card processing network and the transaction processing network are different)

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