Fraugster and Worldline increase chargeback protection for travel merchants

Tuesday 2 August 2022 10:23 CET | News

Germany-based fraud prevention company Fraugster has partnered with Worldline to equip merchants with the former’s Chargeback Protection solution.

The solution prevents chargeback losses for merchants by taking full liability for fraudulent transactions. At the same time, artificial intelligence (AI) trained on global payment data makes more accurate decisions to increase approval rates. Innovations in machine learning and AI allow merchants to go-live without historical data by leveraging a new deep learning model.

Germany-based fraud prevention company Fraugster has partnered with Worldline to equip merchants with the former’s Chargeback Protection solution.

Effects of COVID-19 upon chargeback trends

According to the press release, with the outbreak of COVID-19, global travel was grounded. This caused mass cancellations and a scramble for refunds, but also created new opportunities for fraudsters to strike overburdened travel operators (hotels, airlines, and OTAs), and take advantage of weak points in the system. In addition, there was a surge in so-called ‘angry chargebacks’ where customers claim not to have authorised a transaction, usually in response to being frustrated by a cancellation or booking change.

Additional factors make chargeback protection more relevant. The first is that the total cost of managing chargebacks has risen to nearly 3x of the original transaction value, according to a Fraugster analysis. For verticals like travel, where average order values are in excess of USD 750, this implies a total cost of over USD 2000 per fraudulent transaction.

Secondly, 80% of online merchants are reporting an increase in first party fraud (also referred to as ‘friendly fraud’) where credit card credentials are intentionally or mistakenly abused. This trend is particularly acute in online gaming environments. These chargebacks are difficult to prevent or mitigate and are costing companies margin, with limited recourse to recovering chargeback losses, as per the same Fraugster analysis.

Together, these trends are increasing merchants’ exposure to chargeback liability and are driving up the total costs related to chargebacks. With Fraugster’s Chargeback Protection solution merchants are able to reduce the costs attributable to managing chargebacks, plus chargeback losses and fees, with little to no integration effort.

For more information about Worldline and Fraugster, please check out the company profiles in The Paypers Company Database.

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Keywords: Fraugster, chargebacks, COVID-19, fraud prevention, partnership
Categories: Fraud & Financial Crime
Companies: Fraugster, Worldline
Countries: World
This article is part of category

Fraud & Financial Crime




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