The payments industry has been combatting fraud for many years. But according to Chargebacks911, a global firm focused on dispute resolution and chargeback prevention, data reveals that merchants are losing more money and goodwill to false declines than to fraudulent activities. This appears to be part of a growing set of problems resulting from increased levels of automation.
By automating platforms with AI and other automation tools, many platforms are experiencing a wide range of serious problems. For instance, some legit users can even be blocked from accessing certain services because AI algorithms mistakenly take them for being bots or malicious. Similarly, legit customers who can drive revenue growth are being turned down due to false declines, a pressing issue considering it has already been a very challenging environment for business owners.
The findings, drawn from the firm’s Cardholder Dispute Index and Chargeback Stats, indicate how “blunt” fraud filters are gradually eroding revenue, trust, and loyalty at an alarming rate.
Fraud filters are support to protect legit businesses, however, they now seem to be blocking good customers at checkout time.
Chargebacks911’s analysis shows that these systems can “mistakenly block 75 times more legitimate revenue than the fraud they stop.”
And when a clients gets turned away, it is not just a missed sale opportunity.
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