Monica Eaton-Cardone examines the new PayPal partnerships announced by MasterCard and Visa, including their potential impact on chargebacks

Merchants should approach new opportunities with an element of caution, writes our co-founder in PaymentsSource this week.

In this article, Monica highlights the positives of boosting conversion, but warns that higher transactions volumes are also likely to lead to higher levels of chargeback fraud.

“The rise in chargebacks – 7% transaction growth vs. 20% increase in chargebacks, according to JPMorgan Chase – suggests that despite efforts to promote ACH linked accounts, the addition of Visa and Mastercard to wallet solutions like PayPal, may actually result in an increase in card-generated transactions, under the protection veil of “PayPal,” thus increasing friendly fraud.”

Monica goes on to highlight that the risks for merchants can be minimized with steps as simple as maintaining detailed records of all transactions, so unjustified disputes can be effectively challenged.

“As conversion rises though, it can be difficult to keep track: technology can help scale chargeback risk management, as can better availability of customer service operatives to assist customers before refund claims escalate to chargebacks.”

Read the full article here.