Chargeback disputes: the latest attempt by fraudsters to beat the system – and how to make sure they don’t!

We think of chargebacks as being a modern inconvenience and a feature of commercial dealings. Yet, documents dating as far back as 1800 BCE show that the concept was already in existence in ancient times. To avoid being accused of theft – an offence punishable by death back then – sellers and buyers demanded and carefully preserved receipts and title deeds. If it was proven that the goods (even those purchased in a legitimate sale) were stolen, the buyer had an obligation to return them to the original owner, but also had a right to charge back the seller.

What is evident from this ancient code of law is that fraud has been an occupational hazard of doing business, from the times of early barter transactions. Since there will always be fraudsters trying to earn a dishonest buck, payment system architects must make fraud prevention one of their key priorities when designing future solutions.

Although chargeback rights are intended to protect buyers from being the unwitting victims of an illegal transaction, they have in fact themselves become a tool for perpetuating fraud. Consumer protection laws, card scheme rules and business practices of banks in some of the largest markets make it almost too easy for a buyer to initiate a transaction dispute; and when they do, existing and upcoming privacy laws make it even more difficult to counteract false disputes.

It seems that, regardless of the obstacles put in place to stop fraudsters in their tracks, they keep on pushing forward, seeking out new avenues in which to thrive. In Europe, the transition to EMV technology and Strong Consumer Authentication (achieved by card schemes through the 3D Secure 2.0 mandate) acts as a frontline defense against online and in-store card payment fraud. But analysts predict that chargeback fraud will become the next scam-of-choice for professional con artists.

Can anything be done about it? Fighting first-time fraudsters will certainly cause extensive collateral damage, harming the legitimate chargeback rights of consumers with a genuine claim, and undermining the online commerce industry as a whole. But, for serial or systemic offenders, the answer may lie in a system of cross-industry, cross-border cooperation, facilitated by the latest distributed ledger solutions, without breaching existing or planned privacy legislation.

We explore this topic further in our new White Paper, “Fighting Fraud with Distributed Ledger Technology”. To read more, you can download it from PaymentEye here.

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Kiwi.com Soars with Agile BI and Reporting

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7 tips for how to prevent chargebacks

“Chargeback management”– a term merchants around the world dread. But, chargebacks are a fact of life and can arise for many reasons, many of which are out of the merchant’s control.  Examples of chargeback triggers include: Fraud Customer disputes Processing errors (e.g. duplicate transactions) Authorization issues (e.g. debiting cardholder)

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Meet our Superwomen, France Blanchard and Lital Bar Noy, nominees for the European Women in Payments Awards 2018!

We are so proud that not one, but two of Credorax’s super women have been shortlisted for the European Women in Payments (EWPN) Awards. France Blanchard, Senior Vice President Business Operations, is up for ‘The Payments Woman of the Year‘ award. While our Vice President Product,  Lital Bar Noy, is nominated for EWPN’s ‘The Young […]

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5 Risks in Implementing a Payment Solution

On a macro-level, glorious predictions are constantly made about the future of the global e-commerce industry. Take, for example, a Statista report, which reveals that e-commerce was responsible for around $2.3 trillion in sales in 2017 and is expected to hit $4.5 trillion in 2021.  With such promising revenue expectations, it is no wonder e-commerce […]

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Expanding globally? Add local currencies like Kiwi.com

All Business is Local & Sometimes Exotic We have found that when a merchant accepts local currencies, their approval rates usually increase. This might seem like common sense and easy to achieve – but it’s not. E.g. some regions can present greater challenges. Latin America countries are very local and want to keep it that way. […]

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Avoid Getting Ripped off During Your August Holiday

August is here and that means many of you are traveling around the globe. Visiting exotic destinations is obviously thrilling and isn’t it always even more pleasant when you can save a bit on travel expenses here and there.  As a global Acquirer in the travel space, we are lucky to have first-hand knowledge on […]

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Is Banking Headed for a “Dumb Pipe”, Telco-like Future?

Ilya Dubinsky, head of Credorax’s CTO office, recently attended Money2020 Europe.  He took part in a panel on the Future of Banking that was streamed live, with over 500 people attending globally. Check out the webinar here. We caught up with Ilya afterwards, to find out more about his insights on the trends transforming banking […]

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Money20/20 Europe: Take Five!

The Credorax team had a fantastic time at Money20/20 Europe, one of the largest European FinTech events, in Amsterdam last week.  We had over 60 scheduled meetings, and many stopped by our booth.  We enjoyed seeing our partners and meeting prospects and industry experts. There were many great sessions and informative panels. Here are the […]

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