Dual Strategies for Chargeback and Payment Fraud Prevention

Chargeback and payment fraud are among the most common issues e-commerce sellers encounter. Both are equally frustrating and very damaging to the company’s well-being. Fortunately, there are ways to minimize such illegitimate transactions. In this article, we explain how chargeback and payment fraud work, tell you more about their dangers, and recommend simultaneously chargeback fraud prevention and payment fraud protection tools so you can strengthen your defense efficiently.

Chargeback Fraud and Payment Fraud: How Do They Work

Chargebacks are reversed transactional operations performed by the bank, which are requested by cardholders. Such operations are performed without notifying the merchant. While there are many legitimate refund requests, there are also an astonishing number of fraudulent ones. In the most common cases, chargeback fraudsters receive goods and services and file chargeback requests to use these goods or services for free. There are also cases of “friendly” fraud. For instance, upon receiving the package, the customer changed their mind about the purchase. Although such refund requests are genuine, they usually go against the merchant’s policies and still take a toll on the company’s budget.

Payment fraud is a type of illegitimate transaction that involves stolen card information. Fraudsters can obtain bank account details offline (by snatching the information from physical cards) and online (by hacking one’s digital account). There are plenty of inexperienced fraudsters who get identified quickly; However, there are also networks of individuals who have been performing illegitimate transactions for years and who are more challenging to detect.

The Dangers of Chargeback and Payment Fraud

Fraudulent activity is one of the most unpleasant issues merchants have to face daily. Not only is it tedious to deal with, but it also causes several issues that restrict the company’s growth. The list of the problems includes:

• Financial losses. Once the bank approves a fraudulent chargeback request, money is transferred from the merchant’s bank account. Furthermore, the seller is charged the operation fee and can face increased costs for all transactions from the payment processor.
• Damaged reputation. If the merchant was unsuccessful in overcoming fraudulent activity, it might mean his unreliability as an e-commerce seller. A damaged reputation can restrict client flow and limit strategic partnership opportunities, slowing the business’s growth.
• Legal issues. If the seller doesn’t find an efficient solution for the payment fraud issue, there is a high chance the merchant will start canceling all suspicious transactions, including legitimate ones. Such action can seriously damage client-company relations, resulting in legal prosecutions that will damage the business’s reputation and budget even further.

Such issues can result in the most severe consequences, including bankruptcy. Therefore, it is essential to apply advanced tactics to eliminate the possibility of fraudulent operations.

Solutions for Fraudulent Transactions

Chargeback and payment frauds are profound issues that require complex measures. For a merchant, it is essential to approach both of these problems simultaneously. Implementing fraud-preventing tactics will not only secure the revenue but also stimulate the stable development of your business. Fortunately, Germius CRM can offer fast solutions that proved their efficiency over time for both of these issues.

• Chargeback prevention tools. Germius integrated Verifi and Ethoca solutions to successfully identify and block suspicious chargeback requests before they can affect your company’s well-being.
• Suspicious card detection system. Germius’ system operates in real-time, instantly blocking suspicious cards and users and protecting your business from various threats.
• Payment analysis and data verification. Germius CRM algorithms analyze payment data to detect suspicious transactions based on IP addresses, location, and user behavior patterns, effectively preventing fraudulent operations.
• Germius system allows you to create custom blacklists to exclude users and cards noticed in fraudulent activity, preventing the recurrence of illegitimate transactions.
• AI system. Germius’ system uses a vast database of potentially fraudulent users and cards, which helps merchants efficiently prevent many fraudulent financial operations.

Germius offers an advanced protection system that helps merchants minimize the risk of fraudulent transactions. By accessing Germius CRM, you invest in your business’s financial safety and stable development.

Final Thoughts

Even though fraudulent activity can seriously affect your business’s prosperity, there are quick and efficient solutions to this problem. By investing in chargeback and payment fraud-prevention services, you safeguard your merchant’s reputation and minimize the company’s expenses, stimulating your business’s growth. Do not hesitate to access fraud-protection applications today to ensure your business’s stable development.