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Essential Aspects of Payment Processor Can Help Avoid Chargebacks


Your payment processor can help avoid chargebacks using tools such as verified by Visa, CVV, and AVS for preventing frauds. In addition to these, there are measures they consider to reduce the number of chargebacks. Here is list of things that you can expect:
  • There are many players in the overall process, the card brand, card owner, payment brand, processors, and the merchant. If a customer has a reasonable claim then card brand will send a temporary credit to the card owner and the process of chargeback starts. The funds are debited from merchant’s account during the process.
  • There will be a notification via mail, fax, or online management system about the chargeback. If you submit documentation on time and challenge the chargeback successfully in time assigned to you, then funds will be returned. But if documentations are not submitted, then you won’t get funds.

These were things that you can expect from banks that will handle your case, here is how your processor can handle your case and ensure to prevent chargebacks.

Processors helping business to Avoid chargebacks
  • Blacklist: A list can help business owners to identify frauds, regardless of the type of fraud committed. Merchants can enlist those who have caused trouble once. Merchants also have the option to block cards that have been involved in some sort of fraud. Individual IP addresses, emails, or entire country can be banned. There aren’t many processors offering these facilities so merchants should check whether they have it.
  • Whitelists: Just like a blacklist, there is a whitelist that helps manage demographic of customers. A blacklist bans few individuals, but a whitelist bans entire population, allowing only a few using a protective barrier. For example, a merchant may want to block all the countries except USA, UK, and Australia. Black and white lists help reduce risk and prevent transactions that merchant thinks will result in chargebacks. Consulting with the processor will help manage both white and black lists.
  • Limits: If a criminal tries to run a card, it may go for many other purchases as well before detection. If there is one successful fraud attempt, then criminal will for sure want to try the same or different card. Having limits is essential because of its helps merchants monitor transaction frequency.For example, an IP address could be limited or prohibited from attempting to purchase for a short time. Velocity limits are type of tool usually provided by the processor to control a number of transactions.

Security Codes: Security codes can help validate card not present transactions and it will also ensure that the actual person is participating in the purchase. If a customer can provide security code on the card, then this tool will verify whether the person placing the order has a card in hand or not. It can limit criminals who just have gained access to information, but not security code. This feature is provided by the processor as a plugin to prevent unauthorized transactions.
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