Fraugster strengthens chargeback protection for travel merchants post-pandemic

Sub: Chargeback Protection Solution manages/addresses new types of ticketing 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 operators to confidently weather the storm of the pandemic of Covid-19 thanks to 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 traders to get started without historical data by leveraging a new deep learning model.

With the Covid-19 outbreak, global travel has been wiped out. This caused mass cancellations and a rush for refunds, but also created new opportunities for fraudsters to hit over-stretched travel operators (hotels, airlines and OTAs) and take advantage of weak points in the system. Additionally, there has been an increase in so-called “angry chargebacks” where customers claim they did not authorize a transaction, usually in response to frustration over a cancellation or rebooking. Fraud patterns related to Covid-19 and consumer payment behavior were very different from before the pandemic. Similarly, data inconsistencies have limited the ability to identify and prevent certain types of fraudulent attacks such as last-minute cancellations on short-term reservations. Chargeback rates have risen to over 3% from a baseline of less than 0.5% under normal circumstances.

“Iberostar has 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 design a new AI model specifically for us. Within months, we have reduced the chargeback rate from 2.76% to 0.07%, which was a fantastic achievement,” said Ferran LlompartCorporate Treasury Manager, Iberostar

Additional factors make chargeback protection more relevant than ever. The first is that the total cost of handling chargebacks has increased to almost 3 times the value of the original transaction, according to an analysis by Fraugster. For vertical markets like travel, where average order values ​​exceed $750this implies a total cost greater than $2000 by fraudulent transaction.

Secondly, 80% of online merchants report an increase in first-party fraud (also called “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 businesses margin, with limited recourse to recovering chargeback losses.

Together, these trends increase merchants’ exposure to chargeback liability and drive up total chargeback costs. With Fraugster’s Chargeback Protection solution, merchants are able to significantly reduce costs attributable to chargeback management, as well as chargeback losses and fees, with little or no integration effort.

“Fraugster’s approach to dealing with chargebacks is to use a combination of machine learning and behavioral science to create a more accurate picture of the transaction in question. This means merchants can provide a more seamless shopping experience. to legitimate customers while preventing fraudulent transactions from going through – this includes transactions that may turn into chargeback fraud later,” said Christian Mangold, CEO of Fraugster. “We are delighted that global brands have increased revenue by 5-16% since adopting Fraugster’s Chargeback Protection solution and report more stable and predictable financial coverage for chargebacks and bottom line impacts. .”

About Fraugster

Fraugster is a Berlin based payment intelligence company. Fraugster enables leading global merchants and global payment 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 enhancement platforms on 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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SOURCE Fraugster

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