Fi911® Director of Relationship Management Craig McClure is one of the world’s foremost experts and payments and chargeback procedures. In a new post for the MAC News heading of the Merchant Acquirer’s Committee, Craig offers up key insights and advice for managing friendly fraud in 2021 and beyond.
MAC is an association of payments professionals and organizations dedicated to protecting the integrity of the payment ecosystem. They accomplish this through ongoing education, communication, and collaboration among its members. As a group, they represent approximately 400 organizations and more than 1,400 high-level professionals.
As cited in the recent 2021 Chargeback Field Report, Covid-19 has had a significant impact on the market. The result has been a surge in both criminal fraud and friendly fraud activity.
“94% of respondents reported that friendly fraud was a concern for their business,” Craig said. “This is especially true in the US, where merchants were almost twice as likely to identify friendly fraud as the source of their chargebacks as compared to European merchants.”
The silver lining lies in the representment process, which is a very underutilized opportunity to recover revenue. While merchants submitted a response to 43% of chargeback cases, the average net win rate, or representment success rate as a portion of overall chargebacks, sat at just 12%. “If merchants and financial institutions can find a way to optimize this process, they may stand to recover billions of dollars currently lost to friendly fraud,” Craig explains.
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