Payments Blog

A Merchant's Perspective: The Chargeback Problem

There’s never a dull moment in the digital commerce world and, on top of that, this is one of the most exciting times to be a player in this space. Throughout the last several years, both online merchants and banks have shown a consistent commitment to innovation in the name of providing a better experience for the consumer.

A consumer’s priorities are rarely stagnant, however, which means players in this industry will have to constantly bring new ideas to the table that will invigorate their consumers. If this seems like a lot of work, that’s because it is. While this is one of the most exciting times to exist in the digital commerce space, it can be one of the most exhausting since things can change in an instant.

There’s so much happening in this space that there’s not much time to worry about things that could halt this forward progress, like fraud, false declines or chargebacks.

Hacker programing in technology environment with cyber icons and symbolsFraudulent chargebacks (those that are initiated because of a fraudulent act) can cause significant damage. If fraudsters obtain valuable consumer information and use it to purchase numerous items on a merchant’s website, the consumer will certainly file a chargeback against that merchant with their issuing bank.

When it comes to fraudulent chargebacks, issuers typically rule in favor of the consumer and immediately return the lost funds to their account, which means, by the end of the process, the merchant will have lost the product in question, the profit on the lost item and any chargeback fees associated with the dispute.

These ensuing problems have necessitated the need for a viable solution to stop fraudsters before they can infiltrate an online database and secure consumer information.

Cardinal Consumer Authentication (CCA) is an authentication solution that allows merchants to interface and share data with issuers, so that the issuer can make a more informed, intelligent authentication decision. This solution will give merchants the opportunity to re-focus some of their efforts, away from manual review and towards other critical business functions. Contact Cardinal today to learn more about CCA!

Posted by CardinalCommerce

Welcome to the CardinalCommerce blog. Cardinal is a global leader in authenticating digital transactions, with One Connection to drive digital commerce. Our goal for this blog is to provide a platform that will inform and educate our Customers and partners on consumer authentication, payments, mobile commerce, solution design and big data.

Topics: chargebacks, Digital Commerce

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