Through a partnership with fraud prevention provider Ethoca, Total System Services Inc. is offering card issuers and merchants a new tool to prevent e-commerce chargebacks.
The TSYS Transaction Recover Network will provide near real-time notification of confirmed fraud to help issuers and online merchants eliminate the time-consuming chargeback process, the Columbus, Ga.-based payment processor and technology provider said in a Feb. 26 press release.
Toronto-based Ethoca, which will power the TSYS network, has reported significant chargeback reductions for its clients. Most recently, it cited the progress Santander Bank has made since incorporating the data-sharing network in which Ethoca Alerts inform merchants about potential chargeback problems from certain cards.
“With the continued growth of e-commerce payments and the anticipated rise in card-not-present fraud, efficient collaboration between issuing banks and merchants is crucial to help mitigate risk and improve the cardholder experience,” Andrew Mathieson, group executive at TSYS, said in the release. “The TSYS Transaction Recovery Network enables a collaborative efficiency that reduces online fraud and operational expenses associated with chargebacks.”
TSYS will provide the connection to automatically deliver confirmed fraud data from the issuer to Ethoca in near real time. In turn, Ethoca passes confirmed reports of card fraud across a large, global merchant network to recover funds via transaction reversal or refund, negating the need for the issuer to initiate a chargeback.
"Through this initiative, we’re executing on a shared vision of helping card issuers find more efficient and cardholder-friendly ways to combat the costly, damaging effects of fraud and chargebacks,” Trevor Clarke, executive vice president of issuer relations and co-founder at Ethoca, stated in the release.
Ethoca reports that issuers adopting the technology have seen an average fraud mitigation rate of up to 65 percent, up to 84 percent resolution rate with highly disputed merchants, up to 75 percent recovery rate on low-value transactions that would otherwise be written off, and up to 40 percent recovery rate on transactions that resulted in a chargeback despite going through the 3D Secure security mechanism.