Chargeback Protection

20%

the annual rate at which overall chargebacks are rising, more than 4x the rate consumer spending

43%

growth in friendly fraud over the past 2 years.

$3.48

is lost per dollar of fraud for digital merchants and financial services companies

Performance

And the Merchant Takes the Loss

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Chargebacks are the symptom of an anti-fraud program that can be improved. While some chargebacks are submitted with legitimate transaction problems with supply or delivery, most estimates put some form of fraud as the primary driver of 80% of all chargebacks.

Reduce your chargeback rates leveraging our cross-industry dataset of a billion transactions, advanced analytics, and AI and deep learning enhancements.

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Gradually, then Suddenly

As illustrated to the right, chargebacks occur when a cardholder disputes a charge to his or her account, and experts estimate that as much as 80% of chargebacks involve fraud. The chargeback process is as follows:

  1. cardholder disputes transaction and contacts credit card issuing bank,
  2. issuing bank returns transaction to the acquiring bank through the credit card network,
  3. credit card network forwards the chargeback to the acquiring bank,
  4. acquiring bank receives chargeback and resolves the dispute or forwards it to the merchant,
  5. merchant receives the chargeback and either accepts it or submits documentation to the acquiring bank in its defense,
  6. acquiring bank forwards the defense to the credit card network,
  7. credit card network receives the documents and forwards to the issuing bank,
  8. issuing bank receives documentation and releases funds to the cardholder’s account,
  9. cardholder receives funds and/or information resolving the disputed transaction.

With only 14% of cardholders contacting the digital merchant before filing a chargeback, and with payment processors and card networks having an increasingly low tolerance for chargebacks before imposing fines and holding back reserves, allowing chargebacks to grow represents one of the few existential threats for a digital merchant.

With Fraud.net’s enterprise platform, you will be able to monitor all of the points during a customer and transaction lifecycle that, left unmanaged, cause potential for chargebacks.  Machine learning and anomaly detection will help extend good controls, continuous monitoring, and advanced analytics.

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The Network Effect

Broad-based attacks, schemes and strategies can be most effectively countered with a unified, technology-based defense adopted by all the potential targets – a massive cross-industry, cross-border collaboration at a scale that businesses (and fraudsters) have not yet experienced.

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