Mitigate chargeback and fraud risk with the correct data and insights
Zero chargebacks for three consecutive months; that’s an impressive feat when the global chargeback volume is estimated to reach 615 million transactions this year. PRISM+, a consumer electronics company, achieved just that and more with the help of Checkout.com.
A chargeback is a consumer protection tool that can come at a high cost to businesses — Mastercard estimates every dispute to cost between $15 and $70. Whether the chargebacks are fraudulent or being used as a last resort by disgruntled customers, merchants need to remain vigilant.
When there are too many chargebacks, the business could lose card acceptance, further complicate customer payments, and reduce sales. For example, a 10% chargeback reversal rate in the travel industry could be a fatal blow to a travel merchant’s chances of survival in the post-covid era.
Chargebacks and disputed transactions are always a business risk, so merchants must have a strategy to mitigate as much as possible. Ninety-seven percent of e-commerce CEOs believe the industry needs to innovate its business models to stay relevant, profitable, and resilient in the next 18 months, owing to shifts in online retail. Being proactive and installing prevention measures are some of the best ways to do it.
PRISM+ recognised that it needed more transparency of its data and optimised its transactional process for better customer experience and fraud prevention. It switched to Checkout.com as its payment service provider (PSP) to provide end-to-end data giving complete visibility on its money flow and instant insights on what was going on throughout the customer journey so any issues could be detected and resolved as appropriate.
“Checkout.com provided the expertise for us to improve acceptance rates, cater to chargebacks, optimise our risk settings, improve fraud detection, and understand the different challenges and opportunities for each geography,” said Jonathan Tan, co-founder of PRISM+, which sells high-value and high-performance gaming monitors and smart TVs online in Singapore, Malaysia and, more recently, Australia. The onboarding process was so easy; it went live in just two days.
“Besides seamless, improved payment services, we were also assigned a dedicated Customer Success Manager (CSM) for round-the-clock support,” Tan said. “And when we were hit with fraudulent transactions, the Checkout.com team ran us through the best course of action. They tweaked our risk settings to better adapt to purchase patterns and advised how we can optimise our operations. This guidance was invaluable to us.”
The result? PRISM+ boosted its acceptance rate to over 90% and saw zero chargeback incidents for three months consecutively at the beginning of this year alone.
“Checkout.com gained our confidence as a reliable partner with great expertise, making them the obvious choice when we decided to launch our Australian entity.” It proved to be the right call. There were several fraudulent chargebacks at the start of its expansion which the Checkout.com team proactively identified, and provided advice and solutions to resolve the concerns.
The correct data and insight are crucial to pinpointing the root causes of chargebacks – which are often symptoms of something wrong somewhere in the process. There may be patterns in the transaction stages that might have gone previously unnoticed. For example, suppose an item keeps initiating chargebacks from customers. In that case, the data could flag that the item description lacks specifics and clarity, or a simple return option is overlooked.
Checkout.com is one of the most valuable privately-held fintech decacorns in the world with a market valuation of $15 billion. It has over 19 international offices and processes payments in more than 150 currencies across five continents. Its clients include Grab, Wise (formally TransferWise), SHEIN, Binance, and Jeans West.
Checkout.com provides its customers with the tools for electronic payments, analytics and fraud monitoring together in one platform. Users create custom risk strategies and scale according to need using the range of technology—from simple rules to machine learning models—available on the platform. This also means they can adapt as fraud continues mutating and future-proof their risk-management strategy for defence.
“With our technology, deep payments expertise, and specialist teams with local knowledge in your markets, we help you capitalise on your data. This allows for smarter decision making to meet customer expectations, cut fraud and capture revenue.”
Click here to download the Forrester fraud report and learn how to balance risk in an ever-changing retail landscape.