Mastercard Expands First-Party Trust Across Europe to Tackle Rising Friendly Fraud

October 23, 2026 • FinTech News

Mastercard is expanding its First-Party Trust program to address a growing challenge in digital payments: cardholders disputing purchases that they or someone authorized by them may have made legitimately. The initiative aims to help merchants and card issuers distinguish genuine unauthorized transactions from first-party misuse, often called “friendly fraud.”

The stakes are rising. Global chargeback volume is forecast to reach 324 million transactions by 2028, up from a forecast of 261 million for 2025, according to figures cited by Mastercard from the Merchant Risk Council. That increase would put more pressure on merchants, payment providers, and banks to resolve disputes accurately and efficiently.

Announced on October 22, 2026, the expansion will give European issuers access to risk insights and merchant-provided evidence that can support decisions about disputed purchases. Mastercard says the program can help reduce unnecessary chargebacks and the costs associated with them.

However, the initiative is not a guarantee against fraud or disputes. Its value will depend on the quality of transaction evidence, how issuers assess that evidence, and how effectively merchants integrate the process into their payment operations.

Why friendly fraud is becoming a payments problem

A chargeback occurs when a cardholder challenges a card transaction through their issuer. The process gives consumers a way to contest unauthorized payments and other eligible transactions. It is an important protection in digital commerce.

However, not every disputed transaction involves stolen card details or an external attacker.

First-party misuse occurs when a cardholder disputes a purchase they made or authorized. Sometimes the customer deliberately seeks a refund through the dispute process. In other cases, the customer may not recognize the merchant’s billing descriptor, forget a subscription renewal, or misunderstand a purchase.

That distinction matters. A genuine fraud case requires a different response from a dispute involving a recognized purchase, a delivery disagreement, or an unclear billing description.

Merchants can face investigation costs, lost revenue, administrative work, and chargeback-related fees when a transaction is disputed. Meanwhile, issuers must assess the claim, investigate the available evidence, and reach a decision.

As online shopping and digital payments grow, the volume of transactions that may need review can also increase. Businesses must therefore balance fraud prevention with a smooth customer experience.

A system that treats every dispute as fraud risks misclassifying legitimate activity. A system that overlooks genuine unauthorized payments can leave consumers exposed. Payment providers need reliable information to make that distinction.

Mastercard’s First-Party Trust program aims to improve the information available at two important points: when a transaction is authorized and when a cardholder later disputes it.

What Mastercard First-Party Trust does

The program creates additional channels for merchants to share transaction-related insights with card issuers. Mastercard says these insights can help issuers assess whether a disputed purchase appears legitimate or is more consistent with third-party fraud.

The program offers two main routes for sharing information.

First, merchants can provide relevant insights as part of the transaction itself. Second, they can submit supporting information during the dispute process. These routes address different stages of a payment’s lifecycle.

1. Risk insights during authorization

During authorization, Mastercard’s fraud models can provide risk signals to help issuers evaluate transactions. The objective is to distinguish activity that may involve third-party fraud from purchases that show stronger signs of legitimacy.

Third-party fraud generally involves someone using payment details without the cardholder’s permission. First-party misuse, by contrast, involves a cardholder disputing a transaction they made or authorized.

The distinction is not always straightforward. A transaction can appear legitimate but still involve fraud, while a genuine purchase can trigger an unusual risk signal.

Mastercard’s approach aims to give issuers more context when making authorization decisions. Better information may help them assess risk more accurately instead of relying on limited transaction details alone.

Still, risk signals are not conclusive proof. Issuers must interpret them alongside their own controls, policies, and other available information.

2. Merchant evidence during disputes

When a cardholder challenges a purchase, merchants may be able to submit supporting information about the transaction.

Depending on the purchase and the information available, this evidence may include details about the order, delivery, and authentication. Such records can help an issuer understand what happened and evaluate the merchant’s account of the transaction.

For example, a merchant might provide relevant order information, proof of delivery, or records showing how a purchase was authenticated. These details may help clarify whether a transaction was authorized or whether the dispute requires further investigation.

The evidence available will vary by business and transaction type. A digital subscription, a physical delivery, and an in-person purchase may each produce different records.

This is why evidence quality matters. Information must be relevant to the specific dispute, sufficiently reliable, and handled in line with applicable privacy and data-protection requirements.

For smaller merchants, a structured way to share evidence could also reduce the burden of assembling information manually. Mastercard says the program is intended to make these capabilities available to small businesses as well as larger merchants.

3. Evidence standards and chargeback protection

Mastercard also says the program introduces rules defining what can qualify as compelling evidence when issuers review disputed purchases.

These rules are intended to help issuers assess cases more consistently. The announcement also refers to merchant chargeback protection for disputes that meet the program’s First-Party Trust evidence-sharing requirements.

That protection is an important part of the announcement, but merchants should not interpret it as blanket immunity from chargebacks. Eligibility depends on meeting the relevant requirements. The announcement does not establish that every merchant, transaction, or dispute will qualify.

Businesses considering the program will need to understand the applicable rules, the evidence they must provide, and the conditions attached to any protection.

A forecast of 324 million chargebacks raises the stakes.

The projected rise in chargebacks gives the announcement its wider significance.

The Merchant Risk Council figures cited by Mastercard put global chargeback volume at a forecast 261 million transactions in 2025 and 324 million in 2028. That represents an increase of approximately 24% between the two forecast figures.

These are projections, not confirmed totals for future years. Nevertheless, they indicate the scale of the operational challenge facing the payments industry.

More disputes can mean more work for merchant support teams, fraud analysts, payment operations, and issuer dispute departments. Businesses may need to gather more records, respond within required timeframes, and manage the financial effects of contested transactions.

For merchants operating at scale, even small improvements in dispute handling could be valuable. For smaller businesses, avoiding unnecessary chargebacks may help protect cash flow and reduce time spent on administrative work.

However, the impact will depend on actual adoption and results. Mastercard has not provided a quantified estimate in the announcement of how much the European expansion will reduce chargebacks, lower costs, or improve dispute win rates.

Those measurements will be important for evaluating the program’s effectiveness after launch.

What the expansion means for European merchants

For European merchants, the program’s main potential benefit is better access to information that can support dispute reviews.

Businesses already collect transaction data through checkout systems, order management platforms, delivery services, and authentication tools. The challenge is making relevant records available in a form that issuers can use during a dispute.

First-party trust could encourage merchants to improve how they capture, organize, and share that information. It may also give merchants another way to challenge disputes they believe involve legitimate purchases.

This could be especially relevant for digital commerce, where the customer and merchant may never interact in person. Online transactions can involve recurring subscriptions, digital goods, remote delivery, and payment descriptors that customers do not immediately recognize.

For example, a customer may see an unfamiliar name on a card statement and dispute the payment. Relevant merchant information could help the issuer investigate whether the transaction relates to a genuine purchase. The same process must still protect customers who report actual unauthorized activity.

The program therefore addresses a practical problem: issuers often need more context than a transaction record alone can provide.

Implications for small businesses

Smaller merchants may have fewer staff dedicated to fraud management and dispute resolution. Preparing evidence for each case can take time away from customer service and core business operations.

A structured evidence-sharing process could make dispute management easier, provided that merchants can access it through their existing payment providers or operational systems.

However, the announcement does not specify the onboarding process, integration costs, or exact requirements for every category of merchant. Those details will matter when businesses assess whether participation is practical.

Merchants should also continue maintaining accurate order records, clear billing descriptors, reliable delivery information and appropriate customer authentication. A new dispute programme cannot replace sound payment operations.

What issuers and the wider payments industry should watch

Issuers face a difficult task when reviewing disputed card payments. They must protect cardholders from genuine fraud while avoiding unnecessary reversals of legitimate transactions.

Additional transaction insights could help them make more informed decisions. Yet the quality of the outcome will depend on how the information is presented, the reliability of the underlying records and how the issuer weighs different signals.

There are also broader questions about consistency. Merchants operate across different sectors, use different payment systems and collect different types of evidence. Issuers need a workable way to assess that information without assuming that every merchant record is complete or correct.

The programme’s evidence rules may help establish a clearer framework. Its effectiveness will still need to be assessed in practice.

The wider industry should watch several measures after rollout: changes in chargeback volumes, dispute-resolution times, the proportion of cases supported by usable evidence, merchant participation and the rate of incorrect decisions. These would help determine whether improved information translates into better outcomes for both consumers and businesses.

When will Mastercard First-Party Trust be available in Europe?

Mastercard has announced a phased regional expansion rather than a single global launch date.

According to the October 22 announcement, First-Party Trust is scheduled to become available across Europe in July 2027. Mastercard also says availability across Eastern Europe, the Middle East and Africa is planned for October 2026.

The programme had previously launched in the United States, Canada, Latin America, the Caribbean and Asia Pacific in 2024.

The announcement does not provide a detailed European country-by-country rollout schedule or full technical onboarding instructions. Merchants and issuers should therefore confirm availability, eligibility and implementation requirements with their Mastercard contacts or payment partners.

The bigger picture: better evidence, not a shortcut to eliminating fraud

Mastercard’s expansion reflects a broader shift in payment security. Fraud prevention increasingly requires more than identifying suspicious payment credentials. It also requires reliable information about the transaction, the customer’s interaction and what happened after a purchase.

First-party misuse complicates this work because the cardholder may be involved in the original transaction. At the same time, an unfamiliar statement entry or a genuine service problem can lead a customer to raise a legitimate dispute. Payment systems must account for both possibilities.

Mastercard is positioning First-Party Trust as a way to improve the information shared between merchants and issuers. The programme combines risk insights at authorisation with evidence during disputes and rules for assessing that evidence.

Its success will depend on execution. Merchants need practical ways to provide reliable records, while issuers need to interpret those records fairly and consistently. Consumers must also retain appropriate protection when a transaction is genuinely unauthorised.

If the European rollout delivers on its objectives, it could help reduce avoidable chargebacks and make dispute resolution more evidence-led. For now, the expansion is a notable development in the ongoing effort to balance merchant protection, issuer decision-making and consumer trust in digital payments.

TheFinRate takeaway: With global chargebacks forecast to reach 324 million transactions by 2028, Mastercard is betting that better evidence-sharing can help the payments industry distinguish genuine fraud from disputed legitimate purchases. The key test will be whether the programme improves real-world outcomes without weakening cardholder protection.