Mastercard and Worldpay are enhancing the transaction experience by helping merchants to resolve transaction disputes faster and with fewer chargebacks.
Chargebacks – a request for a refund triggered when a consumer disputes a transaction on their account – are a growing issue: industry-wide chargeback volumes are expected to reach 337 million by 2026, a 42% increase from 2023 levels.
Through the partnership, Worldpay, a global payment technology and solutions company, will offer Mastercard’s Ethoca Alerts to its 1 million merchants worldwide. The service provides an early warning system that helps prevent a dispute from becoming a chargeback and reduces potential financial losses due to fraud.
Ethoca Alerts, by Mastercard, works across all payment brands. It delivers insights that merchants can use to stop the fulfilment of goods and services. Merchants do not need to change their existing infrastructure or processes to take advantage of Ethoca Alerts. The collaboration will also help improve authorisation rates for merchants. It enables more of the $2.3tn total transactions Worldpay processes to be completed successfully thanks to fewer erroneously declined transactions.
Making transactions safe and seamless
Johan Gerber, Executive Vice President, Cyber and Intelligence at Mastercard said: “eCommerce is thriving. We are working to make transactions as safe and as seamless as possible for all parties. This partnership with Worldpay extends our powerful technology to even more merchants around the world, reducing fraud. By working together, we will advance our shared goal of building trust and powering the global digital economy.”
Gabriel de Montessus, Executive Vice President, Global Enterprise at Worldpay said “We’re pleased to bring this solution to the market in partnership with Mastercard to deliver more value and innovation to our clients. Creating more accessible, more flexible and more seamless ways to reduce fraud, while accelerating commerce and protect consumers and merchants is what drives us at Worldpay.”
Between 2022-23 Ethoca Alerts enabled the prevention of $1.6bn in fraud due to chargebacks, helping to protect retailers from fraudulent claims.
Chargebacks911 study
In January 2024, Chargebacks911 released the findings of its 2024 Cardholder Dispute Index (Subscription Required). The study compiles insights from more than 4,000 consumers engaged in chargeback processes with issuing banks in the past year. The Index looked into the primary reasons behind cardholder disputes.
Factors such as transaction recognition difficulties and convoluted return processes emerge as the top reasons compelling consumers to initiate chargebacks. The report also offered invaluable insights for merchants seeking to mitigate disputes.
Enterprise Times: What this means for businesses.
Chargebacks remain a major challenge to businesses, particularly since they can impact a brand’s reputation. Despite the welcome partnership between Mastercard and Worldpay, brands and retailers must take action.
Enterprises have to incorporate an application that helps identify this issue so that they can take the appropriate action. Many brands are already taking additional security measures, such as two-factor authentication, which has become more widespread. As a result, merchants must be careful when implementing these changes.
The Chargeback911 study suggests that online merchants must play a more educational role for their users. Education is a key aspect of fighting global fraud. Mastercard and WorldPay are likely to take this educational role to support enterprises. This will include embracing cybersecurity best practices, better understanding common fraud methods, and changing the checkout process to improve fraud mitigation.
Brands and retailers must always minimise friction in the checkout experience. Otherwise, merchants will face increased cart abandonment rates. Worldpay is likely to work with Mastercard to build security measures into shopping apps. This should ensure a low-friction user journey while encompassing increased authentication requirements.
Ecommerce fraud is fast becoming a crisis for merchants across the globe
https://www.mastercard.com/news/press/2024/march/mastercard-and-worldpay-join-forces-to-fight-payment-fraud-globally/
