MRC Vegas, one of the world’s largest events for fraud and payments professionals, took place at the Aria Resort last week, attracting over 1500 attendees, from 450 companies and 30 countries, all keen to hear about the latest risk trends in mobile, retail, data and technology.
Hosted by the Merchant Risk Council, the event aims to bring greater security to ecommerce merchants with global ambitions. This year’s agenda boasted impressive speakers from within the payments industry including Kevin Dallas of WorldPay and Michael Marx of Visa.
Chargebacks911, part of Global Risk Technologies™, was in attendance, attracting some of the world’s largest retailer businesses, keen to hear more about how to mitigate modern payment risks and resolve their chargeback issues.
So many organisations are unaware of the extent to which the chargeback problem is plaguing the industry, so let’s take a look.
Between 2009 and 2014, friendly fraud, one of the biggest causes of chargebacks, increased by 150%. Overall, chargebacks grew 55% in the same period. Compare this to identity theft, often the most high-profile security risk in the media, which actually decreased by 25% in this timeframe.
Chargebacks are the invisible problem of today’s technology-driven payment ecosystem and worryingly, it is transforming consumer behaviour as it becomes seen less as a method of recovering the unauthorised transaction of funds, and more as another refund mechanism. The digital boom means banks are coming under increasing pressure to resolve disputes faster, which in turn is causing an imbalance in an industry that is almost always favourable to the consumer.
The worry is that half of all cardholders who file a dispute will do it again within 90 days. Analysing this trend, it’s not hard to see why companies are struggling with rising chargeback rates. Essentially, issuers and cardholders are being rewarded for initiating illegitimate chargebacks, with processors ultimately penalised along with their merchants.
Talking with merchants in Las Vegas, our team helped them understand how they can increase their revenue by reducing chargebacks, while being able to successfully disputing those that do hit. Chargebacks should not be accepted as a cost of doing business.
