The Green Sheet Online Edition
May 12, 2008 • Issue 08:05:01
Optimize revenue, minimize fraud
Billing customers online is an ongoing challenge, and chargebacks attributed to fraud are an ever present concern for merchants. Fraud management, therefore, is critical in striking that delicate balance between sorting out the legitimate transactions from the fraudulent ones.
With Vindicia ChargeGuard - a new module that can be employed as a stand alone solution or part of Vindicia Inc.'s CashBox on-demand bill pay management software - that balance is struck by focusing on both sides of the online transaction equation. Pretransaction, the software screens out false positives (valid transactions wrongly categorized as false ones) and flags the actual suspect transactions.
Post-transaction, ChargeGuard automatically manages all chargeback attempts, posting a win rate of 65 to 85 percent of disputed transactions, said Vindicia.
ChargeGuard screens potential chargeback attempts against Vindicia's database of chargebacks - a vast library of transactions processed across Vindicia's merchant network. Retailers are not given a chargeback estimation, but a more accurate probability based on ChargeGuard's calculations.
Based on that knowledge, merchants can fine-tune their customer acquisition strategies while still maintaining effective fraud control levels.
The pre- and post-transaction features of ChargeGuard were developed as a direct result of customer feedback requesting such a two-pronged approach to fraud management.
With ChargeGuard, Vindicia provides merchants with detailed chargeback reports categorized by type, affiliate payment type and bank identification number. With this information, merchants can better understand what changes are needed to their business systems in order to reduce the impact of chargebacks.
Vindicia collates all chargeback data from the card brands so merchants can identify trends across different payment cards and processors.
ChargeGuard has other benefits, too. The module allows businesses to process more orders with fewer staff in less time. Furthermore, by successfully filtering out fraudulent orders, merchants can save on gateway and payment processing fees. The tool is also effective in the online, global marketplace where conventional card authorization tools and procedures may not be in place.
Pricing for ChargeGuard, as well as the just released CashBox, is based on the amount of transactions processed and merchants' online revenue.
The San Mateo, Calif.-based company is certified by the Payment Card Industry Security Standards Council as a service provider for level 1 merchants - defined by the card brands as retailers who process over 6 million transactions per year. Vindicia said it has handled over 41 million transactions since the beginning of 2007. Since its 2003 inception, Vindicia has handled over 20 million accounts.
It has payment processing partnerships with Merchant e-Solutions, Chase Paymentech LLC, First Data Corp., TSYS Acquiring Solutions, as well as a technology partnership with Raleigh, N.C.-based online software maker rPath.
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