Ethoca: secure eCommerce fraud & chargeback protection
In the last decades, friendly fraud brought much damage to businesses. To be well secured from eCommerce fraud, a merchant should implement various solutions, one of which is Ethoca. This Maxpay article is dedicated to the service, explaining how it works and how it can protect your business.
What is a chargeback, and can it be fraudulent?
Let’s briefly cover the definition. It is a right of a customer to have a money return in case a product or service has not satisfied the expectation. The leading card associations introduced the measures back in the day to promote safer operations within card payment systems and security solutions to prevent eCommerce fraud.
Normally, a client would have the funds back as banking systems are more likely to resolve the situation in favor of a buyer. Meanwhile, a merchant will be contacted not directly but by the banking networks and will have to return the funds and pay the chargeback fee to an acquiring bank that manages the merchant account.
| Chargeback flow |
| Client → Issuing bank → Acquiring bank → Merchant account |
All these seem bad enough, but there is more to it. Imagine that a customer is actually pleased with the item or services but wants to trick the system, fake the dissatisfaction, and have the money back. It is chargeback fraud or friendly fraud: it damages a merchant account with extra fees, bad reputation, funds return, and all this for no legitimate reason. It is basically stealing, and that is why one needs to be secured from eCommerce fraud.
What is Ethoca Alerts, and how does it defend your business?
Ethoca Alerts is a chargeback protection service. When applied, it notifies a merchant about the confirmed card fraud, allowing to solve the dispute on a personal level- by issuing a refund instead of a chargeback and canceling shipping if necessary.
The best part – the company is notified within a day, sometimes even minutes after clients decide to dispute transactions. You can find out more about how Maxpay’s clients can use Ethoca Alerts to their advantage in this article.
Casing point: a business owner can offer customers a return or refund, which is much better than chargebacks.
| Ethoca Alerts process | |
| Stage 1 | When a customer initiates a chargeback, their issuing bank sends an alert to Ethoca |
| Stage 2 | The service freezes the dispute for 24 hours and redirects the alert to a merchant’s account |
| Stage 3 | A merchant can use 24 hours to resolve the dispute offering a refund, return, or replacement |
FAQ
How to obtain Ethoca chargeback protection for your business?
Having Ethoca on the website would help merchants to be secure from eCommerce fraud and improve general satisfaction. To implement the service, we recommend partnering with Maxpay.
Maxpay proposes anti-fraud solutions for businesses that include fraud prevention with Covery and chargeback protection with Ethoca Alerts. In a wise combination, these two can hold the business in a perfect equilibrium of defense. On top of that, Maxpay does care about its clients. And so it supplies each with a personal manager that would carefully assist every need.
What is eCommerce chargeback?
In simple words, it is the money return. But this return is not a direct deal between a merchant and a client. A chargeback reaches a merchant through the acquiring bank, which makes them pay extra fees.
How serious is chargeback fraud?
Like any type of fraud, it is serious and surely illegal. To be well secured from eCommerce fraud, you should implement chargeback protection onto your website. Ethoca Alerts with Maxpay can defend your business.
How do you protect against chargeback fraud?
To be secured from eCommerce fraud, a business should implement a chargeback alert system. The system can freeze a dispute for 24 hours and block the notification flow to an acquiring bank. A merchant can contact a customer offering refund, return, or replacement during this time.
Is chargeback fraud illegal?
Absolutely and in any location, no matter if it is the USA, UK, or Spain. However, implementing the chargeback protection not only solves the fraud problem. It also saves from false accusations of fraud.