Slowly but surely, the world is moving towards the ease and convenience of digital payments. In the year 2013 in America alone, digital transaction constituted more than 50% of the bulk of total consumer payments. Statistics show that, during the same year, more than 70% internet users participated in at least one digital transaction. All these signs point to the inevitable catching on of digital payments, and consumers and businesses around the world need to be aware of its characteristics, benefits and risks.
The number of card not present transactions is rapidly increasing, and more and more people prefer to conduct their purchasing from home using the internet. As a part of the massive e-commerce boom, secure payment solutions are making it possible for merchants to collect transaction funds without physically handling the transaction. There is, however, an element of risk in all this. As the number of card not present transactions skyrockets, the number of card not present chargebacks can also keep mounting. This is a lose-lose scenario for merchants, and it is smart to have in place a safe, secured and well thought-out process to prevent such chargebacks.
Card not present chargebacks can be filed for a number of different scenarios. Let us analyze the most common ones and suggest ways to mitigate such circumstances —
- Friendly Fraud – Friendly fraud can occur when consumers choose to exploit loopholes in the chargeback process and try to obtain a refund for a product already received. To prevent these occurrences, you can concentrate on implementing customer-friendly payment, delivery and return policies and improve general customer satisfaction. Using delivery confirmation and adopting better security measures for the sale of digital products are also smart moves.
- Merchant Error – Often, card not present chargebacks are a fallout of merchant errors. Merchants should provide detailed, transparent information about products, policies and terms. A thorough overhaul of processing procedures and the use of dynamic currency conversion can also help.
- Criminal Fraud – Credit card fraud can frequently happen, and every six out of 10 customers actually become worried about card fraud during online transactions. To prevent chargebacks caused by criminal fraud, consider implementing multiple points of consumer validation and making full use of the anti-fraud features of card platforms. Being on the lookout for affiliate fraud and signing up for chargeback alerts can also prove to be extremely helpful.
Over and above all, consider the use of a highly secure payment processing service with built-in measures for chargeback prevention.
