AI Can Resolve Chargeback Challenges for Merchants, Banks
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“Many card disputes are filed without a valid reason. This is a practice called “friendly fraud,” and chargebacks tied specifically to that practice have continued to grow at a rate of approximately 20% each year. They’re growing so quickly, in fact, that friendly fraud is projected to represent nearly two-thirds of all chargeback issuances by 2023.
A cloud-based AI approach could eliminate redundancies in the chargeback process. Much of the back-and-forth decisioning and reconciliation process could be cut. This would mean legitimate disputes are resolved in hours, rather than weeks, while friendly fraud chargebacks gradually disappear.
Financial institutions could reallocate many of the 39,000 fulltime equivalent employees currently occupied with chargeback-related activities, allowing for greater efficiency in other departments.”
