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Sub: Chargeback Protection Solution handles/fights new types of ticketing and travel fraud
BERLIN, August 2, 2022 /PRNewswire/ — wife, an AI payment intelligence company, has teamed up with Worldline, a global leader in secure payments and trusted transactions, to confidently enable travel merchants to weather the storm of the Covid-19 pandemic with its chargeback protection solution. The solution eliminates chargeback losses for merchants by taking full liability for fraudulent transactions. At the same time, advanced AI trained on global payment data makes more accurate decisions to increase approval rates. Innovations in machine learning and artificial intelligence (AI) enable traders to go live without historical data by leveraging a new deep learning model.
With the outbreak of Covid-19, worldwide travel was halted. This led to mass cancellations and scrambles for refunds, but also created new opportunities for scammers to target overburdened tour operators (hotels, airlines, and OTAs) and exploit vulnerabilities in the system. Additionally, there has been a rise in so-called “annoying chargebacks,” where customers claim they didn’t authorize a transaction, usually in response to frustration at a cancellation or booking change. Covid-19 fraud patterns and consumer payment behavior differed significantly from those before the pandemic. Similarly, data inconsistencies limited the ability to detect and prevent certain types of fraud attacks, such as last-minute cancellations on last-minute bookings. Chargeback rates increased to over 3% from a baseline of under 0.5% under normal circumstances.
“Iberostar saw a massive increase in fraud pressures during the pandemic. We were delighted that partners Fraugster and Worldline were able to act so quickly to develop a new AI model specifically for us. In just a few months, we lowered the chargeback rate from 2.76%. to 0.07%, which was a fantastic achievement,” he said Ferran LlompartCorporate Finance Director, Iberostar
Additional factors make chargeback protection more relevant than ever. First, the total cost of managing chargebacks has increased to nearly triple the original transaction value, according to Fraugster analysis. For industries like travel where average order values are over $750this means total costs of over $2000 per fraudulent transaction.
Secondly, 80% of online retailers report an increase in first-party fraud (also known as “friendly fraud”), where credit card details are misused, intentionally or mistakenly. This trend is particularly acute in online gaming environments. These chargebacks are very difficult to prevent or mitigate and cost companies margin due to limited recourse to chargeback losses.
Together, these trends are increasing merchant liability for chargebacks and driving up the overall cost associated with chargebacks. With Fraugster’s Chargeback Protection solution, merchants can significantly reduce the cost of managing chargebacks as well as chargeback losses and fees with little to no integration effort.
“Fraugster’s approach to handling chargebacks is to use a combination of machine learning and behavioral science to create a more accurate picture of the transaction in question. This means merchants can provide legitimate customers with a more seamless shopping experience while preventing fraudulent ones from being processed Transactions getting through – this includes transactions that can later turn into chargeback scams,” explained Christian Mangold, CEO of Fraugster. “We are pleased that global brands have increased sales by 5-16% since adopting Fraugster’s Chargeback Protection solution product and report more stable and predictable financial coverage for chargebacks and bottom line impact.”
About Frauster
Mrs. is a Berlin based payment intelligence company. Fraugster enables the world’s leading merchants, global payment companies like Worldline and Ratepay to intelligently manage the impact of fraud to minimize fraud costs, maximize revenue and improve customer experience. Fraugster has built one of the most accurate AI compliance, risk and fraud management and revenue growth platforms on the market and is backed by leading deeptech investors such as Earlybird, Speedinvest and CommerzVentures. For more information, see https://www.fraugster.com/
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Caroline Delvenne
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SOURCE Frauggster
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