Merchants in the US are more and more often targeted by fraudsters. In September 2014, the US experienced 52% of total attack volume. The United Kingdom, China, and the Netherlands experienced 9%, 8%, and 6% of attack volume, respectively.
Both card-present (CP) and card not present (CNP) merchants are affected by payment fraud. However, it’s much more prevalent in CNP transactions. Revenue lost as the result of disputes for card-present merchants is 3 bps, while card not present merchants’ losses exceed 38 bps.
The Rise of Chargeback Fraud
The rise of chargeback fraud and friendly fraud is associated with a number of factors such as the increased ease with which cardholders can dispute purchases, consumer fear of being victimized by fraud, a higher level of consumer awareness of their chargeback rights, and the astounding increase in difficulty for merchants to identify, aggregate, and submit compelling chargeback responses.
When it comes to fraudsters, they’re getting smarter and more advanced. They take advantage of credit card breaches, as well as dark-web/black-market locations to obtain tools and stolen identity or card data. On the other hand, banks are making it easier for clients to chargeback transactions, and side with cardholders over merchants. In the wake of this, an ever-growing need for anti-fraud strategies and tools is being created. Thus, it has become critical for online card-not-present retailers to take measures to protect their businesses.
To decrease chargeback rates, first of all, it’s important to identify the problem and determine the pain points of your business. For this, you can assess the chargeback reason codes you are receiving and categorize them into fraud, friendly fraud, or merchant error.
How to Fight Chargebacks
Chargebacks don’t always mean the same thing. That’s why you should know what to focus on while applying your strategies so to protect your bottom line.
You can come across many tools and services available in the market for fraud prevention. Each of them offers specific strategies for intervention, like rule based approach with machine learning, artificial intelligence, chargeback guarantees, frictionless 3D Verification, alerts, manual reviews, as well as services to help fight chargebacks after they happen.
Turning to a reputable payment processor and business loan provider like eMerchantBroker can be the best solution to your problem associated with chargebacks. EMB is voted the nation’s #1 high risk processor and boasts an A+ rating with the BBB. Moreover, eMerchantBroker is rated A by Card Payment Options and is named one of Inc. 500’s Fastest Growing Companies of 2016.
eMerchnatBroker has partnered with Verifi and their Cardholder Dispute Resolution Network (CDRN), as well as Ethoca’s alert system. The CDRN networks with both banks and card issuers and gives merchants direct control over resolving credit transaction disputes. EMB offers its merchants both chargeback resolution networks, thanks to which merchants can achieve the highest rate of chargeback resolution.
