Sub: Chargeback Protection solution addresses/addresses new types of ticket and travel fraud
BERLIN, August 2, 2022 /PRNewswire/ — Fraugster, an AI-powered payment intelligence company, together with Worldline, a global leader in secure payments and trusted transactions, has enabled 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 responsibility 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) allow marketers to live without historical data using a new deep learning model.
With the outbreak of Covid-19, global travel came to a halt. This caused massive cancellations and a scramble for refunds, but also created new opportunities for fraudsters to hit overburdened travel operators (hotels, airlines and OTAs) and take advantage of system weaknesses. In addition, there was an increase in so-called “charged anger returns” where customers claim they did not authorize a transaction, usually in response to being frustrated by a booking cancellation or change. Covid-19 fraud patterns and consumer payment behavior were markedly different than before the pandemic. Similarly, data inconsistencies limited the ability to identify and prevent certain types of fraud attacks such as last-minute cancellations on short-term bookings. Chargeback rates jumped to over 3%, against a baseline of under 0.5% under normal circumstances.
“Iberostar experienced a massive increase in fraud pressure during the pandemic. We were delighted that partners Fraugster and Worldline were able to act so quickly to create a new AI model specifically for us. In a few short months we reduced the scale of returning fees from 2.76% to 0.07%, which was a fantastic achievement”, he said Ferran LlompartDirector of Corporate Treasury, Iberostar
Additional factors make chargeback protection more important than ever. The first is that the total cost of handling chargebacks has risen to nearly 3 times the original transaction value, according to a Fraugster analysis. For verticals like travel, where average order values are greater than 750 dollarsthis means a total cost over 2000 dollars for fraudulent transaction.
Secondly, 80% of online marketers are reporting an increase in first-party fraud (also referred to as “friendly fraud”) where credit card credentials are intentionally or mistakenly misused. This trend is particularly acute in online gaming environments. These chargebacks are very difficult to prevent or mitigate and cost companies margin, with limited opportunities to recover chargeback losses.
Together, these trends are increasing merchants’ exposure to chargeback liability and increasing the total costs associated with chargebacks. With Fraugster’s Chargeback Protection solution, merchants are able to significantly reduce costs attributable to managing chargebacks, plus losses and chargeback fees, with little or no integration effort.
“Fraugster’s approach to addressing chargebacks is to use a combination of machine learning and behavioral science to create a clearer picture of the transaction in question. This means merchants can provide a smoother experience purchases for legitimate customers, while also preventing fraudulent transactions from taking place – this includes transactions that could turn into refund fraud later on,” it said. Christian Mangold, CEO of Fraugster. “We are pleased that global brands have increased their revenue between 5-16% since adopting Fraugster’s chargeback protection solution product and report more stable and predictable financial coverage for chargebacks and impacts final.”
Fraugster is one berlin company based on payment intelligence. Fraugster enables the world’s leading merchants, global payments companies such as Worldline and Ratepay to intelligently manage the impact of fraud to minimize fraud costs, maximize revenue and improve customer experience. Fraugster has developed one of the most accurate AI compliance, risk and fraud management and revenue growth platforms in the market and is backed by leading deep tech investors including Earlybird, Speedinvest and CommerzVentures. Further information can be found at https://www.fraugster.com/
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