E-Commerce sales are booming in the present times. The rise of e-businesses is associated with the rapid growth of urbanization. According to which one works, the change in lifestyle trends, socializes, shops, and uses technology has significantly boosted the e-Commerce sector.
However, as more people are becoming dependent on online purchases of goods and services, it has sharply increased the risk of online fraud. Cyber exploits are becoming more sophisticated, and the debilitating fraud attempts are draining the revenue of organizations. The fraudsters use intelligent tools to defraud businesses. There are different types of eCommerce frauds like identity theft, chargeback fraud, clean fraud, phishing, and triangulation fraud.
Chargeback fraud, also known as friendly fraud, is a common fraud type. It takes place when consumers make an online shopping purchase using their card and place a request for a chargeback from their issuing bank after they receive the purchased goods or services. Cardholders file false chargebacks using excuses that tend to sound legitimate. Hence, the consumers try to keep the item or service and request a payment processor’s chargeback based on false claims. The credit card company will have to issue a chargeback, and the retailer, in turn, will have to pay the price of the item or service. To combat this fraud type, e-Commerce platforms can integrate Chargeback Management Software.
Chargeback Management Software helps enterprises to confront fraudulent chargebacks. It provides a combination of expertise, strategy, and tools for effectively managing revenue loss and bringing down the chargeback rate. Merchants are increasingly facing the problem of false disputes or chargebacks. Consumers deliberately raise fraudulent requests for a return or refund in the form of a chargeback.
Research reveals that 86% of all chargebacks are probable cases of friendly fraud, and because of this, the merchant loses $2.40 for every dollar of chargeback fraud. A chargeback fraud can cost an average merchant 1.47% of their total revenue. A chargeback fraud management software helps companies to recover the revenue lost to chargebacks. The software analyzes chargeback data to prevent the chargebacks from occurring in the future. Here are five things you need to know about the chargeback management software.
Do You Need Chargeback Management Software?
How do you deal with the large document sets related to technical, complex industry regulations? Does your company have the potential to incorporate an internal system for a systematic analysis of compliant disputes? What practical strategies do you already have in your workspace to detect the potential cases of friendly fraud? While choosing a chargeback management software, you need to examine how your software will integrate with the existing infrastructure, hardware, software, and other networks. You need to assess your enterprise’s capacity to handle diverse and dynamic chargebacks and incorporate a solution that can suit your business needs. Chargeback management software uses automation and business intelligence tools to manage incoming chargebacks. It can provide operational improvements to reduce potential chargebacks in the future.
Three Types Of Chargeback Software
There are essentially three types of software that can address chargeback cases. It includes stopping actual fraud disputes, stopping chargeback fraud disputes, and responding to disputes. The three types of software take care of different areas, including stopping fraud, preventing chargebacks, and recovering transactions from chargebacks. The software can come in three basic approaches: SaaS platforms licensed by merchants for self-management, managed software outsourced to third-party chargeback managers, and hybrid SaaS for flexibility.
Is Chargeback Management Software Effective?
Integration of Chargeback Management Software provides enterprises with a solution to effectively handle chargeback issues by prevention and active representment. Chargeback representment happens when the merchant disagrees with the cardholder’s claims and does not accept the customers’ payment dispute. However, technologies have their limitations and are effective only to a certain extent.
Protection Of Data
Chargeback Management Software should be compliant with the data security standards. Ask your vendor to produce documents that guarantee that the software will not access the details about your leads or extract your customers’ sensitive data. The software should integrate seamlessly and communicate effectively with the processor or gateway.
In-House or Outsource?
Assess your business’s capacity and decide accordingly if you want to handle chargeback disputes in-house or outsource chargeback management services for better expertise and strategy. You should analyze both the option’s pros and cons and implement the solution that fits your business rightly.
To Conclude:
Chargeback Management Software includes tools to field chargeback alerts, manage predictive analytics and costs associated with chargeback fraud. Enterprise can incorporate chargeback Management software to manage and prevent chargebacks in real-time.
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