6 How to Reduce the Risks of Chargebacks

Chargebacks are incredibly common. Each year, approximately half of consumers (globally) will initiate a chargeback through their issuing bank.

For more information, see: https://www.chargebackgurus.com/blog/merchant-chargebacks-101-what-they-are-why-they-matter

Chargebacks are expensive and time-consuming to handle, and are a concern for both card issuers, Program Managers and merchants. To help you reduce the incidents of chargebacks, Thredd provides a number of options:

  • Merchant Category Code (MCC) Blacklists — you can add any merchants with high levels of chargebacks or fraudulent transactions to this list, which will prevent your cards being used by these merchants.

  • Card velocity limits and usage limit groups — you can define limits to the amount, time of day or frequency at which a card is used, as a means to reduce the risks of fraud and chargebacks.

  • Fraud Transaction Monitoring — Thredd's Fraud Transaction Monitoring is a best-in-class, flexible card fraud solution that minimises online and offline card risk and offers real-time detection of card fraud.

  • 3D Secure — Three Domain Secure (3D Secure) is a card scheme initiative, supported by both Mastercard and Visa, that provides an additional layer of cardholder protection. During an online purchase transaction, the cardholder needs to authenticate by entering their 3DS credentials (such as a Knowledge-Based Authentication, or OTPSMS). This not only reduces the risks of fraud, but in most instances transfers liability for the transaction to the cardholder. You can use the Thredd API (SOAP web services or REST-based Cards API) to implement 3D Secure.

3D secure checks are only applied to transactions where both the merchant and cardholder are enrolled in this scheme.

  • Out of Band (OOB) authentication — Thredd supports OOB authentication types in 3DS V2 (known as Biometrics)

  • Enhanced card security —Thredd enables you to implement two factor authentication and other means to ensure only the legitimate cardholder can use your card.

6.1 More Information

For further details about chargebacks, contact your Account Manager.