Fraud vs Increased Friction: American Express Chargebacks

Fraud is a growing problem for online retailers all over the world. Merchants are looking for ways to better protect their business from fraud. If you’ reinterested in payment processing fraud, as well as chargebacks, such as American Express chargebacks, just go on reading this post.

Payment Processing Fraud

Merchant losses are between $2.48 and $2.82 for every $1 of direct fraud, as financial technology company FIS reports. There’s a rise in omnichannel fraud, in which fraudsters purchase an item over the Internet and then get it in a physical store. Payment processing fraud has its effect both on card-present (CP) and card-not-present (CNP) merchants, but it’s more prevalent among CNP transactions.

The problem of fraud is growing as criminals are increasingly becoming more and more sophisticated. Criminals are quickly adapting and changing their schemes to exploit new or emerging weaknesses in the sector.

On the other hand, online shoppers demand the highest level of security and, meanwhile, don’t tolerate inconvenience in payment processing. This makes the situation rather challenging for merchants and financial institutions. So, it becomes difficult for them to increase security while reducing the amount of friction that customers experience during online shopping, internet banking, or another digital session.

Now, when the 2018 holiday shopping season is already knocking our doors, people and organizations should be aware that fraud will probably bring more account takeovers this year as than in 2018. This is what experts anticipate. The theft of gift cards, loyalty points, and other consumer data ID are also included in this list.

Merchant Fighting Fraud and American Express Chargebacks

Nowadays, merchants are focused on fighting the increased level of fraud more than ever. In fact, merchants are spending nearly 3{cc14ccfafd257ee11d1d29aa8d2242333db7b5ed915d6c9334ae2d2c3e17fcd0} to 5{cc14ccfafd257ee11d1d29aa8d2242333db7b5ed915d6c9334ae2d2c3e17fcd0} of their revenue, as a recent BigCommerce report shows. To successfully combat fraud, merchants should understand and manage their fraud risks wisely.

What is more, merchants should update their fraud strategies to make sure their processes are agile and capable of adapting the changing fraud patterns, which are further going to evolve. There exist some strategies that retailers can use to more effectively fight fraud. E.g., retailers can build profiles of repeat buyers so that subsequent transactions from known repeat clients can pass quickly through the transaction process.

Working with a secure and experienced payment processor is another highly important factor to never ignore. Merchants should turn to only a reputable merchant services provider that can provide them with the latest fraud prevention tools and reliable services to reduce American Express chargebacks and not only. With a true professional in the field, you can enjoy chargeback protection tools, PCI-compliant payment gateways, and fraud filters.

Work with a credit card processing company that, e.g., partners with Verifi’s Cardholder Dispute Resolution Network and Ethoca’s alert system, to offer a chargeback prevention tool that’ll allow you to resolve credit card transaction disputes directly.

As Robert McKay, vice president and general manager, risk solutions at American technology company Neustar, Inc., notes, preventing fraud shouldn’t mean increasing friction for legitimate consumers.

Author Bio: Electronic payments expert Blair Thomas is the co-founder of high risk payment processing company eMerchantBroker that can help you with American Express chargebacks and not only. He’s just as passionate about his business as he is with traveling and spending time with his dog Cooper.