As seen in paymentweek

by Steven Anderson

For merchants who accept mobile payments, particularly the card-based ones, chargebacks can be a pretty big problem. Problem enough that Ethoca recently filled us in on its plan to put a serious damper on the chargeback concept: the innocuously-named Integrated Solution Suite.

The Integrated Solution Suite may have a simple name, but it’s got some real power under the hood; power sufficient, in fact, to reduce chargebacks by up to 90 percent. Whether it’s genuine fraud, friendly fraud, or false claims, the Integrated Solution Suite can tackle them all.

It’s a three-part system that starts with the Ethoca Eliminator system, a system geared toward deflecting chargebacks. Working with one of the five biggest US card issuers, Eliminator directly deflected 38 percent of disputes that, without Ethoca’s intervention, would have ended up as chargebacks. It’s since added to its roster of successes, with over 15 card issuers and several digital goods brands planning to bring Eliminator into play throughout this year.

The second part is Ethoca Alerts, a product introduced back in 2010. A dispute that actually beats Eliminator gets routed through the Alerts system, which provides useful intelligence on fraudulent and disputed transactions sufficient to help interdict others. Finally, there’s Enhanced Representments, a system that works automatically to use rules built around chargeback processing to further dispute claims that make it past the other two systems.

Ethoca’s chief marketing and product officer Keith Briscoe noted “Ethoca’s belief is that a layered approach—powered by the global collaboration network we pioneered—is the only real solution to combat the pervasive friction and poor customer experience typical of today’s ecommerce environment.”

Basically, Ethoca’s system seems to work on the guiding principle that, where one interdiction system may not do the job, one of three almost certainly will. Reducing chargebacks by 90 percent could be a very big deal; given that some reports suggest chargebacks are a $40 billion problem, saving even 25 percent is huge savings globally. Having three lines of defense is certainly helpful, and what’s especially noteworthy here is that Ethoca isn’t claiming a complete loss to chargebacks, but rather a substantial reduction.

Chargebacks will likely be part of business life for some time to come, but Ethoca’s system may be what turns these from a business crippler to a minor nuisance.