Ethoca Alerts. Pioneering a Better Way to Avoid Chargebacks & Stop Fraud Loss

Transcription

1 Ethoca Alerts Pioneering a Better Way to Avoid Chargebacks & Stop Fraud Loss

2 The Issuer-Online Merchant Divide Before Ethoca, online merchants and card issuers relied on their own fraud detection systems and had no way to benefit from each other s time-sensitive cardholder and fraud intelligence. Before Ethoca, online merchants had no way to take action on card issuers cardholderconfirmed fraud intelligence to stop fraud and prevent chargebacks until it was too late. 2

3 Ethoca Has Bridged the Divide 3

4 Ethoca s Solution & Market Reach Ethoca s secure network enables online merchants to collaborate directly with issuers to stop fraud, recover lost revenues and accept more transactions. $1.8B+ in Fraud Alerts Sent to Merchants 9 of the Top 10 Internet Retailers 3 out of 4 Top Card Issuers MasterCard Commercial Agreement Visa Partnership 4 Some of Our Distribution Partners

5 How is Ethoca Different? Ethoca Difference For the first time, Ethoca has made it a proven reality for issuers and merchants to have a seat at the same table. Why It Matters Two-way Access Mutual benefit from cardholder and fraud insight to accept more transactions and reduce fraud losses. It s all about confirmed not suspected fraud and cardholder intelligence provided by Ethoca s network of issuers. Merchants have the certainty they need to refund transactions before they turn into chargebacks, or stop the fraud entirely. Ethoca s secure network is independent, noncompetitive and available for the entire payment ecosystem. The more merchants and issuers that participate, the greater the financial benefits for all: more stopped fraud, more eliminated chargebacks. 5

6 Merchant Challenges Increasing Fraud Risk Increases chargeback risk and associated costs. Avg. $25 $50/Chargeback. Additional Card Association Fees/Penalties Merchants heavily penalized for exceeding chargeback thresholds. Proactively Refunding Fraudulent Transactions Customers typically call their bank instead of requesting a refund directly from the merchant artificially inflates chargeback volumes. Additional Cost of Merchant Watch Lists Card associations levy potentially catastrophic fines on merchants who continuously surpass chargeback thresholds. Cost of Opening & Maintaining Multiple Merchant Accounts Presents significant financial risks that threaten business viability. 6

7 How Online Merchants Typically Deal with Fraud Without Ethoca A costly, inefficient chargeback management process that prevents merchants from proactively refunding transactions and avoiding chargeback costs, penalties and related risks. NOW 40 MIN 45 MIN 1 HOUR 1 DAY 1 WEEK 5 WEEKS 6 WEEKS Bank flags card Cardholder is contacted, or cardholder calls bank instead of merchant Fraud is confirmed by cardholder Chargeback paperwork begins merchant has no idea of impending chargeback Bank records fraud In meantime, the order has been fulfilled Chargeback process starts Merchant is finally notified the opportunity to issue refund long gone Amount, fees & penalties withdrawn from merchant bank account 7

8 Ethoca Innovation: Ethoca Alerts With Ethoca Merchants take immediate action to refund the transaction and avoid the chargeback. Notification time is reduced from 3-6 weeks to hours or days. NOW 40 MIN 45 MIN 1 HOUR 1 DAY 1 WEEK 5 WEEKS 6 WEEKS Bank flags card Cardholder is contacted, or cardholder calls bank instead of merchant Cardholder confirms fraud Ethoca notifies the merchant so the transaction can be refunded immediately Chargeback costs avoided Merchant stays within acceptable limits, increases processing volume, avoids further penalties and retains merchant account. 8

9 Ethoca Alerts: Merchant Value $$$$$ $$$ ~Approx. $10,000 - $50,000 $$$$$$$ Staying Under Chargeback Thresholds = More Volume Dramatic reduction in chargebacks means increased transaction flow and more revenue. Chargeback Avoidance Savings Average $25 - $50 per chargeback. Using Ethoca Alerts, merchant avoids the chargeback in ~98% of cases when they proactively issue a refund. Monitoring Program & Watch List Fee Avoidance Merchant avoids additional Card Association fees for chargeback monitoring/audit programs and Watch List varies based on card scheme and volume. Cost of Setting Up Multiple Merchant Accounts Merchant avoids large potential cost of setting up multiple accounts and paying exorbitant processing fees. 9

10 Ethoca Customers: Real-World Savings Major Electronics Manufacturer $578,000 Fraud Stopped in One Year Gaming Services Provider $6000 $8000 Reduction in Chargeback Fees/Month Nutraceuticals Provider Avoided $50,000 Watch List Fee by Proactively Issuing Refunds and Eliminating Chargebacks. 10

11 Adding Up the Benefits Avoid Chargebacks Stop Fraud Find More Fraud Minimize Future Fraud Spikes Keep Repeat Offenders Out Avoid chargebacks and all-in chargeback costs where: The transaction was successfully stopped Your goods and services costs are comparable to your all-in related chargeback costs, or Your chargeback levels are unacceptable Avoid the financial loss related to lost good and services Improve future fraud screening Combine with related fraud data to perform link analysis Find other accounts and orders in your system and take action to stop them. Uncover the holes in your fraud screening process that fraudsters have detected Repair holes in days to prevent future fraud Key early warning opportunity no need to wait 3-6 weeks for chargebacks to start rolling in Add fraudsters to your negative lists Prevent repeat attacks 11

12 In the Words of Our Customers Very accurate and timely. It s helped us prevent losses on 40% of activity not caught by other screening. Top Office Supply Chain This service provides unique value to our fraud detection team by giving us a heads up before it is too late to stop a fraud item. Top Internet Retailer About 35% of the alerts tell us of fraud that was not detected so would have resulted in shipped bad orders. And, acting on the alerts is straightforward because the alerts are for confirmed fraud. It s not a matter of look into this transaction, it might be fraud ; the alert is coming from the issuer so it s clear what to do. Fraud Manager, Top Electronics Retail Chain We can update our negative list and identify future fraud attempts with IP, , address, phone, etc. Top Computer Retailer Ethoca Alerts allows us to predict future fraud spikes faster. Top Internet Retailer 12

13 Ethoca Alerts: Delivery Flexibility 1. Web Portal 2. Batch File 3. API Web Portal Demo BFt6gs0&feature=youtu.be 13

14 Thank You! 14