Life Without Chargebacks? Yes, Please!
Chargebacks are a big, nasty problem for merchants. A significant increase in the number of card-not-present (CNP) transactions since the onset of the COVID-19 pandemic has led to an explosion in the incidence of cardholder disputes and chargebacks, especially chargebacks due to fraud. According the December 2021 Nilson Report, losses due to fraud in the U.S. alone totaled $10.24 billion in 2020, up from $9.62 billion in losses during 2019. The report calculates that by the year 2030, credit card fraud will cost the global payments industry up to $408.50 billion in losses!
Here are some more not-so-fun facts about the negative impact of chargebacks.
- The typical fee for resolving a single chargeback dispute can cost a merchant up to $100
- Merchants that exceed chargeback limits set by card associations like Visa and Mastercard may be subjected to increased monitoring or denied the ability to process payments
- The Nilson Report notes that in 2020, CNP fraud accounted for 68% of losses experienced by merchants and acquirers in 2020
- “Friendly” or “first-party fraud” is becoming such a big concern for issuers that the credit card industry is considering making it an official fraud category
- For every dollar lost due to fraud, merchants typically lose up to $34 in sales due to false declines
The time and effort spent resolving genuine fraud and non-fraud cardholder disputes is costly. You may think that having to process chargebacks is just a cost of doing business, but partnering with a merchant services provider that offers a full range of ecommerce fraud prevention and automated chargeback mitigation systems can make the dream of life without chargebacks become a reality.
Stop the Clock on Chargebacks
Verifi by Visa and Ethoca Alerts by Mastercard are two sophisticated chargeback mitigation tools integrated with the Cartis Payments anti-fraud solution. These powerful tools are designed to prevent chargebacks by resolving cardholder disputes early, which helps merchants save time and money. Here’s how they work.
The Verifi dispute management system includes tools that enable merchants to resolve genuine fraud and non-fraud disputes at the pre-dispute stage when a cardholder challenges a transaction. The system uses enhanced transaction information that enables pre-disputes to be resolved in real time, allowing the merchant to issue a cardholder credit. Stopping chargebacks from occurring in the first place helps merchants avoid impacts to their dispute ratios, or being subject to increased Issuer scrutiny.
The Mastercard Ethoca Alerts solution uses cardholder dispute information and confirmed fraud data gathered from a substantial network of Issuers, enabling Issuers and merchants to access and exchange data in real time. Because the system sends millions of chargeback alerts to merchants every year, it allows them to issue refunds to their cardholders without having to go through a complicated and time-consuming claims process. This also saves the merchant time and money because the Acquiring bank is not notified.
One Payment Processor, Multiple Chargeback Solutions
Cartis Payments provides both Verifi and Ethoca Alerts as part of our suite of fraud prevention services to help you avoid costly chargebacks. Partnering with us as your merchant services provider enables you to accept all transactions with confidence without having to purchase multiple fraud detection and dispute resolution tools.
You have better things to do than process chargebacks, so call today to learn how we can help you make life without chargebacks a dream come true!