Man and women looking through banking statements

How to prevent chargebacks

/in , , , , /by

Knowing what a chargeback is and understanding how it works can be confusing, but it doesn’t have to be. We’re here to break down chargebacks and provide you with solutions to avoid them.

 

What is a chargeback?

A chargeback, or a payment dispute, is a transaction reversal that occurs when a cardholder disputes authorising a payment or deems a transaction fraudulent. An investigation will then be actioned, and if you, as the merchant, cannot prove the cardholder authorised the transaction, the bank will withdraw the funds from your account and deposit them back into the cardholder’s account.

 

What causes a chargeback?

Unfortunately, there can be a variety of reasons that may cause a chargeback. Here are just some of the possible causes for issuing a chargeback:

 

  • No authorisation
  • Duplicate payment
  • Incorrect transaction amount
  • Incorrect currency code
  • Merchant fraud
  • Late presentment
  • Processing or authorisation errors

 

What are the impacts of chargebacks on merchants?

When a chargeback is initiated and the transaction is withdrawn from your account, there can be several impacts on you and your business. These are just some examples: 

 

  • Loss of income, even if you’ve already provided the goods or services
  • You may be liable for chargeback fees, which in some cases can equal up to two and a half times the original transaction amount
  • Chargeback to transaction ratios exceeded, which can result in lengthy mitigation programs
  • In extreme cases, loss of your accounts due to too many chargebacks

 

How can you avoid chargebacks?

To avoid paying excessive fees on top of the loss of the transaction income, you should look for ways to prevent chargebacks in the first place. 

In many cases, the best and easiest way to avoid chargebacks is to ensure that you follow the proper transaction procedures. Latpay provides merchant payment solutions tailored to specific business needs with dedicated ongoing support, chargeback management and analysis, fraud retina and a shared approach to help manage risk.

With industry knowledge and an excellent merchant payment system on your side, you can avoid the issue of chargebacks before they become a problem for your business.

If you’re a merchant looking for a reliable and safe payment system, get in touch today. Our team of experts would love to help you find the best solution for your needs.

Close up of person typing on keyboard

Credit Card Fraud in Australia

/in , , , , /by

As technology continues to improve, fraudsters have become more creative in the way they target individuals and businesses. In 2019, Australians lost over $634 million to scammers (ACCC, 2019). This number is up 30% on 2018 figures.

Rather than the traditional methods of asking someone to provide their sensitive information, fraudsters now have improved technology and carefully curated techniques that help them commit fraud with minimal risk of detection.

 

Fraud Techniques

As we move closer towards a cashless society, credit card fraud is becoming more prevalent and there are a number of methods fraudsters can use to steal another person’s funds.

Fraudsters used advanced techniques and one of the most effective and efficient means of credit card fraud is card testing. Card testing involves physically stealing a number of credit cards, purchasing credit cards from the dark web, randomly generating credit card numbers or using phishing or spyware techniques to obtain a card’s numbers. The core purpose of testing is not the purchase of an item but to verify the card details are valid and if the transaction was approved.

Fraudsters have now also created a means to commit illegal activity on a much greater scale, in the form of botnets. Botnets are a network of internet-connected devices that can validate a huge number of credit cards at an alarming rate. Botnets submit a large number of transactions to test the viability of stolen credit card details. Many popular shopping carts are being targeted by botnet attacks and one of the most effective means of prevention is velocity checking.

When a valid credit card is detected, it is common for fraudsters to use the credit card details to make small purchases on a merchant’s site. If a small purchase is successful, fraudsters can then proceed to make much larger purchases, a series of micro-purchases or sell the valid card on the dark web.

 

Challenges for Merchants

Fraudulent purchases are often made on small to medium businesses that don’t have the technology in place to detect or prevent it. Unfortunately for targeted merchants, this means they will likely suffer some challenges when fraudulent purchases prevail.

Chargebacks occur when the original cardholder has recognised fraudulent activity on their account with an unrecognised transaction made to you as the targeted merchant. When a dispute is made by the original cardholder or their bank, and you do not have proper proof that a legitimate sale was made using a PIN or signature, you may be liable to pay back the accepted funds and lose the value of the sale and incur a chargeback fee.

Each successful transaction, no matter how small, will count against the merchant’s chargeback ratio once it’s disputed – and crossing over the excessive chargeback threshold can be extremely costly for merchants. 

This is particularly important for eCommerce and online services, where a physical card is not present. In fact, ‘Card not present’ fraud represents more than 80% of all fraud on Australian cards. When a dispute arises, it is very difficult for an online merchant to prove a legitimate purchase was made. Therefore, it is critical that online merchants have technology in place to detect and prevent fraudulent transactions.

 

Opportunities for Merchants

To avoid liability for fraudulent transactions, merchants must be vigilant in their online payment processes. Some best practices to implement include Firewalls, CAPTCHA, Time out of user session and data validation of guest checkouts. Additionally, one of the best ways to avoid being out of pocket for fraudulent transactions is to partner with a verified payment processor.

Latpay’s fraud management service assists merchants to prevent chargebacks and stop fraud in its tracks. With advanced technology, Latpay can actively set a threshold for individual merchants to detect when unusual activity occurs on their site.

In applying the velocity and value threshold, Latpay reviews the past performance of the merchant to work out transactional averages. Latpays innovative technology has helped assist merchants who have been the victims of botnet attacks to significantly minimise losses.

If you’re a merchant, whether offline or online, it pays to be protected. Learn more about Latpay’s fraud management and get in touch with our team of experts to find out more.

Donating to OzHarvest this Christmas

Operation: Giving back this Christmas

/in , , /by

‘Tis the season of giving, which is why LatPay is donating a percentage of its profits to OzHarvest – Australia’s leading food rescue organisation. 

Since 2004, OzHarvest has been on a mission to eliminate food hunger and food waste. It collects quality excess food from more than 3,500 commercial outlets and delivers it to over 1,300 charity partners across the country. Education is also a crucial part of its operation, aiming to equip Australians with the information and skills they need to eat healthfully and sustainably on a budget. 

‘Tis the season of giving, but ‘tis often also the season we are most wasteful with our food. Think of all the leftovers from Christmas lunches and parties that end up going old at the back of our fridges. 

Here at LatPay, we are making an effort to be conscious of our food waste, and are thrilled to also be doing our bit to ensure no Aussie goes hungry this Christmas. Join us in OzHarvest’s fight against food waste and hunger by donating food, your time or money here.

NHS staff and volunteers are the true heroes

We’re giving back to NHS staff and volunteers this Christmas

/in , , , /by

We are donating a percentage of our profits to the NHS Charities Together COVID-19 Appeal to say thank you to all NHS staff for their courageous work and contribution during what continues to be a scary and turbulent time in history. 

Launched back in March to support NHS staff, volunteers and patients impacted by COVID-19, the appeal has raised over £140 million so far. 

£30 million was put to work immediately during the peak of the pandemic, providing staff and volunteers with a comfortable space to break and electronic tablets so patients and staff could stay in contact with loved ones. Money also went toward providing bereavement support and counselling for staff to protect their mental health and wellbeing. 

The appeal was created in liaison with NHS England, national bodies, NHS Charities Together members and national giving partners. 

If you’d like to join us in giving back to those who’ve given everything to our communities this year, donate here. 

Streamlining identity verification & payment processing in hospitality 

/in , , , /by

Valid8 provides key add-on services to software vendors in the hospitality and short-term home rental markets, particularly as their customers are moving rapidly towards touchless processes and greater digital interaction.

Valid8’s customers are generally established providers of customer interaction software, particularly associated with the verification of customers, pre-auth and post-stay payments, as well as the issuance of digital or physical keys.

 

The need for a better solution

Customers utilising short-term accommodation were previously required to prove their identity and provide a pre-auth payment which would often be held for days after checkout. This provided a poor customer experience, particularly when customers had travelled a long distance and just wanted to get to their room. 

On the other hand, administration time and costs for facility owners were generally high, particularly in instances where poor security led to a data breach.  

This has been highlighted with major corporations such as Hilton, MGM Resorts & Hyatt collectively losing over 500 million highly sensitive customer records, resulting in actual or potential fines of tens of millions. 

 

Considerations when deciding to use Latpay + Nuggets

The solution had to seamlessly integrate the identity verification process with payments, plus the ability to ensure total data security for guests without a major change in the operations. 

Further to this, these functions needed to be fully integrated into the existing customer interaction software that direct customers provide to venues, enabling touchless key issue, menu ordering, service bookings and payment without the need to download multiple apps. 

 

The Latpay + Nuggets solution

Latpay & Nuggets incorporated into Valid8’s hospitality service, enhancing the underlying software and fully integrating with the venue’s existing platform, ultimately creating a seamless customer experience. The existing tight integration between Latpay and Nuggets was key to this ability.

Features utilised by the client: 

  • Secure Identity Document, personal details and credit/debit card storage with consent-based access
  • Customer ID verification
  • Face recognition
  • Tokenised Credit Card(s) linked to guest account
  • Card Pre-auth
  • Mobile and EFTPOS/MPOS payments (Front Desk/Restaurant/Bar/Poolside etc.)
  • Fast-Checkout payment finalisation from App

 

Major benefits from using Nuggets + Latpay 

  • Reduced staff needed at Front Desk
  • Reduces payment processing costs (particularly for International credit cards)
  • Faster processing of key allocation or enables physical or digital key self-service
  • Remove transfer of documents/cards between parties – no-touch processing
  • Faster and better customer experience where customers want self-service
  • The customer only needs to undertake ID/account setup process once (not every check-in)
  • Easier accommodation of multi-lingual needs for ID, payment and check-in processes.
  • Reduces card and payment fraud risk
  • Removes ID and guest data breach risks
  • Increased comfort and surely for guests on ID and payment theft risks
  • Removes use of insecure/forgettable/cumbersome username/passwords
  • Compliance with General Data Protection Regulation (GDPR), Second Payment Services Directive (PSD2), Federal Trade Commission Act (FTC Act) and California Consumer Privacy Act (CCPA)
  • Simplifies car park entrance access pre-check-in (no need to issue passes)
  • Enables contactless venue/room delivery via third parties
  • Secures bags and vehicles (only verified access to guest assets)
  • Trust-based history enables removal of pre-auth requirements
  • Facilitates increased revenue opportunities by enabling third-party service provider payments with simplified revenue splits

Interested in seeing what Latpay & Nuggets can do for your business? Find out more about our ID and payment platform using biometrics and blockchain technology.