New Guest Feature for The Paypers From Craig McClure of Chargebacks911®
Craig McClure, Director of Relationship Management at Chargebacks911, explored what financial institutions can do to connect with merchants in a new feature for The Paypers. Specifically, how FIs can help them fight back against fraudulent chargebacks.
The Paypers is the Netherlands-based leading independent source of news and intelligence for professionals in the global payment community. The outlet provides a wide range of news and analysis products aimed at keeping the e-commerce, fintech, and payment professionals informed about the latest developments in the industry.
Chargeback abuse—commonly known as friendly fraud—is a matter that costs merchants billions of dollars each year. They’re not the only ones who end up paying the cost for this abuse, though.
“Even though merchants bear most of the costs of chargebacks, financial institutions (FIs) are also losing billions of dollars in processing costs, payment scheme fees, and other associated financial hits, which can all add up to a damaging blow to an FI’s profitability,” Craig explains. He notes that acquirers often get hit with chargeback costs that exceed merchants’ reserves, which can be a massive cost especially in times of crisis. “FIs being forced to tighten their belts is bad news for everyone in the industry, from payment schemes to merchants – less money for innovation means fewer resources to tackle emerging fraud threats in the future.”
Data is going to be the key to aligning the interests of merchants and financial institutions. With better data sharing and more effective use of AI, both parties may be able to benefit.