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Live Webinar on Feb 28: Authorized Push Payments (APP) Fraud: Trends, Risks, and Your Defense Playbook

February 2, 2022 - Claire Zhou

How to Stop Chargeback Fraud with AI-Powered Detection

Chargeback fraud is a serious threat to merchants, especially as the practice of online shopping and card-not-present transactions continue to climb. In fact, it’s estimated that card fraud losses will reach $12.5 billion by 2025. Many consumers won’t be held liable if their card numbers become compromised, so merchants stand to bear the greatest cost of payment fraud. 

 However, advantages in AI are helping to ensure that such astronomical losses become things of the past. Here’s how AI-powered fraud detection is helping merchants reduce chargeback fraud with confidence.

How AI Works in Chargeback Fraud Detection

Artificial intelligence supports fraud detection and prevention by using data to “learn” more about customers and their actions beyond one transaction. Instead of looking at the surface of a transaction, such as making sure a credit card number is valid, AI can review multiple real-time data points to determine whether a transaction is legitimate. 

For example, let’s say a customer places an order, but their device IP doesn’t match the IP of devices they’ve used in the past. In this case, the merchant might be prompted to collect additional information from the customer, such as sending an SMS text to the user to verify they’re the one making the purchase.

AI stops multiple types of payment fraud in real time, allowing merchants to reduce their risk of chargeback fraud. This also allows good transactions to be processed without friction and reduces pressure on internal operations to manually stop fraud.

Plus, the value of AI only grows the more it’s used. As it collects more data and learns more about your customers and how fraud occurs in your business, it becomes better at detecting it.

Protecting the Entire Customer Lifecycle

AI in payment fraud detection protects your business and its customers throughout the entire customer journey. Fraudsters can exploit every touchpoint, from signing up for promotional emails to making purchases to requesting refunds. Conducting a one-time risk assessment isn’t enough, as many fraudsters don’t launch attacks immediately. 

This is why AI is so valuable to stopping chargeback fraud. It continually works across all channels, accounts, and customers to analyze behaviors. From comparing device information to reviewing hidden links between entities, AI understands your customers and their motivations faster, more accurately, and more efficiently than a human risk assessment team.

How Datavisor Stops Payment Fraud at the Gate

Datavisor, the most comprehensive AI-powered fraud and risk management platform, has developed solutions to help merchants reduce chargeback fraud with confidence, offering an average of 20% detection uplift, 94% detection accuracy, and $15 million in annual savings. With an open platform that consolidates and enriches any data, our platform scales infinitely to provide you with 360-degree coverage and enables you to take action in real time.

To learn more about how you can protect your e-commerce business from payment fraud.

Payment Fraud with DataVisor

about Claire Zhou
Claire is a Senior Product Marketing Manager at DataVisor with over 5 years of marketing experience in security and fin-tech. She is passionate about empowering enterprise customers with AI-based solutions. Her expertise spans data analytics, cybersecurity, and fraud prevention. Claire has an MBA from UCLA.
about Claire Zhou
Claire is a Senior Product Marketing Manager at DataVisor with over 5 years of marketing experience in security and fin-tech. She is passionate about empowering enterprise customers with AI-based solutions. Her expertise spans data analytics, cybersecurity, and fraud prevention. Claire has an MBA from UCLA.