Insights on a better chargeback dispute resolution process
Credit card fraud is a massive problem in the UK––costing £618m in 2016, an increase of 9% from 2015, according to Final Fraud Action. This cost is set to increase as card spending continues to grow, due to factors such as online shopping and contactless. There are currently 65 million cards in circulation in the UK, up more than 2% on the year before, with online retail sales increasing by 11.5% year-on-year (source: UK Cards Association and Centre for Retail Research).
The problem for merchants is that cardholders who are the victims of fraud will nearly always call their bank to query a dodgy transaction.
But the bank is in the dark: it doesn’t have the information to hand to confirm whether the transaction is legitimate or, indeed, fraud. With little or no information, card issuers have no choice but to resolve the dispute with a chargeback. In other words, they refund the transaction back to the customer.
That’s good news for the cardholder. Most of us have experienced that feeling of relief when an incorrect transaction is returned to our bank account, but it’s a big hit to merchants, who not only lose the sale but also must contend with chargeback fees.
Unfortunately, it doesn’t stop there. The upshot of these costs is that merchants increase prices, so as consumers we end up paying after all.
Plus, there’s the wider impact. With challenges such as Brexit on the horizon, the UK economy needs to be top shape, not weighed down by the increasing cost of card fraud.
Luckily, there’s light at the end of the tunnel. Launched in the UK in April 2017, Order Insight™ solves the problem created by the gap in information between cardholders, merchants, and banks, reducing costly disputes and chargebacks.
Here’s how it works:
Preventing Credit Card Fraud
For Customers and Merchants
One of the biggest reasons merchants experience chargebacks is because their customers simply don’t recognise the charge. When a customer doesn’t recognise a charge on their debit or credit card statement, or suspects it might be fraudulent, Order Insight provides key information about the customer’s order from the merchant’s system about the charge, either directly to their mobile or online banking application. Purchase details such as product description, size, colour, quantity, and the device used to make the purchase, along with the merchant’s address, website and logo, are sent straight to the customer in near real-time.
This insightful information produces multiple benefits: it helps confirm the purchase, reduces unnecessary dispute queries and initiations with banks, gives the customer peace of mind, results in fewer lost sales, and reduces expensive chargebacks. This self-service feature provides customers instant access to their order information, but more importantly it allows customers and merchants to directly resolve disputes.
Up to 86% of the time, a cardholder will call their bank instead of the merchant of sale to dispute an unrecognised charge. With Order Insight, when a customer calls their bank, the issuer’s call centre staff is equipped with on-demand information to resolve billing confusion and create a better customer experience. This helps to support the merchant’s sale and avoid time wasted in filing a chargeback and dealing with a flood of disputes and queries. Order Insight allows dispute resolution at the customer level and reduces the need for customers to contact the issuer’s call centre, saving them unnecessary operational costs.
With this end-to-end service, all parties are connected for mutual benefit. Merchants keep their hard-earned sales and avoid lost profits to chargebacks and operational costs. Issuers provide a better experience for their cardholders and help reduce fraud risks. Cardholders get better information and a clearer picture of their purchases, and avoid the frustration of going back and forth to find out if an unrecognised charge on their credit card is legitimate.
That means an end to being in the dark, says Matthew Katz, CEO of Verifi:
“There’s no question card fraud is a massive and increasing problem here in the UK, but our UK customers are already seeing excellent results, retaining over 25% of at-risks sales up front.” (See our product launch release)
Interested in finding out more?