Chargeback Management

Let's talk real numbers about chargebacks prevention that most don’t share. For a merchant processing $500k monthly: - Average chargeback rate: 1.2% - Monthly dispute volume: $6,000 - Average win rate (manual): 15% - Time spent fighting: 40 hours/month - Staff cost: $800+ - Lost revenue: $5,100 Same merchant with automated chargeback management: - Chargeback rate: 0.4% - Monthly disputes: $2,000 - Win rate: 60% - Time spent: 2 hours/month - Staff cost: $0 - Lost revenue: $800 That's an extra $4,300 in their pocket. Every. Single. Month.

IT Financial Management Ensuring that IT financial management rewards the right decisions is crucial for aligning IT behaviors and choices with organizational goals.  Here are some key points to consider: Budgeting 1. Central vs. Business-Unit Budgets: Clearly define how budgets are allocated between central IT and individual business units. This ensures transparency and accountability in funding IT work. 2. Run/Grow/Transform Framework: This framework helps in isolating components of IT operations:  o Run: Budget for maintaining current operations. o Grow: Budget for initiatives aimed at growth. o Transform: Budget for transformational projects. This separation helps in managing and prioritizing funds effectively. Chargeback Mechanisms 1. Complete vs. Partial Chargeback: Decide whether to charge back the full cost of IT services to business units or only a portion. This decision impacts how business units perceive and utilize IT services. 2. Cost Structures: Determine whether to charge straightforward costs or include additional margins for refresh and innovation. This can influence the adoption of new technologies and services. 3. Usage-Based Charging: Implement chargeback based on actual usage or high-level metrics. This encourages efficient use of IT resources. 4. Handling Unforecast Demand: Consider charging more for unforecast demand to manage unexpected spikes in resource usage. 5. Development Costs: Decide whether to charge the first business unit for the total cost of new developments and refund them as others use it, or to forecast demand and charge proportionally. Financial Engineering Considerations • Profit and Loss: Beyond basic budgeting, consider any financial engineering strategies that can optimize IT spending and investments. Addressing Scope Inflation • Ongoing Operations Funding: Ensure there is a formal mechanism to finance the ongoing operation of new capabilities developed through project budgets. This prevents scope inflation in the run-the-business IT budget. By focusing on these areas, IT financial management can effectively support strategic decisions and drive the right behaviors within the organization.

Pega Smart Dispute: Transforming Chargeback Management 💳 Chargebacks are a growing challenge for banks, issuers, and merchants. Rising fraud, strict regulations, and slow manual processes drive up costs and frustrate customers. Legacy systems can’t keep up. 🔴 The Problem • Manual workflows cause delays, errors, and high costs. • Visa, PSD2, and Reg E demand faster, compliant processing. • Slow investigations hurt fraud detection and recovery. 🚀 Why Pega Smart Dispute? ✅ AI-driven fraud detection stops invalid disputes at intake. ✅ End-to-end automation reduces manual effort and speeds resolution. ✅ Built-in compliance ensures seamless adherence to Visa, Mastercard, and banking regulations. ✅ Real-time integrations with VROL, MasterCom, and core banking systems. 📊 Business Impact 💰 50%+ cost savings with automation. ⚡ 3x faster resolution with AI decisioning. 📈 Stronger compliance & fraud detection. Legacy systems slow you down. Pega Smart Dispute is the new standard in chargeback automation. How is your organization handling disputes? 🚀 #Finance #Banking #Chargebacks #Automation

The chargeback process allows cardholders to dispute transactions and request refunds, involving the cardholder, issuing bank, acquiring bank, and merchant. Steps 1. Transaction: The Cardholder makes a purchase. 2. Dispute: The Cardholder contacts the issuing bank to dispute a transaction. 3. Investigation: The issuing bank investigates and may provide provisional credit. 4. Chargeback: The issuing bank initiates a chargeback with the card network. 5. Notification: The card network notifies the acquiring bank and reverses funds. 6. Merchant Response: The merchant can accept or dispute the chargeback. 7. Representment: If disputed, the acquiring bank forwards evidence to the card network for review. 8. Arbitration: If unresolved, the dispute may go to arbitration for a final decision. Key Players - Cardholder: Initiates dispute. - Issuing Bank: Investigates and initiates chargeback. - Card Network: Facilitates communication and decisions. - Acquiring Bank: Notifies merchant and manages representment. - Merchant: Responds to chargeback. Common Reasons - Fraud: Unauthorized transactions. - Authorization Issues: Transactions not authorized. - Processing Errors: Incorrect amounts or duplicates. - Consumer Disputes: Goods/services not received or as described. Impact and Best Practices - Impact: Loss of revenue, fees, resource allocation. - Best Practices: Clear communication, prompt customer service, accurate processing, and thorough documentation.

🚨 Part 5: 𝐓𝐡𝐞 𝐂𝐡𝐚𝐫𝐠𝐞𝐛𝐚𝐜𝐤 𝐌𝐚𝐧𝐚𝐠𝐞𝐦𝐞𝐧𝐭 𝐏𝐫𝐨𝐜𝐞𝐬𝐬 — by CellPoint Digital 👇 As digital payments grow, so do disputes. For travel merchants — where booking values are high and transactions often span multiple channels — chargebacks can quickly become a major cost center. — 𝐖𝐡𝐚𝐭 𝐢𝐬 𝐚 𝐂𝐡𝐚𝐫𝐠𝐞𝐛𝐚𝐜𝐤? ► A chargeback is a forced reversal of a payment initiated by the cardholder through their issuing bank, typically due to suspected fraud, service disputes, or processing errors. ► The scale of the problem is significant: Global chargeback volumes are growing annually, costing merchants billions in lost sales, fees, and operational time. — 𝐓𝐡𝐞 𝐂𝐡𝐚𝐫𝐠𝐞𝐛𝐚𝐜𝐤 𝐌𝐚𝐧𝐚𝐠𝐞𝐦𝐞𝐧𝐭 𝐏𝐫𝐨𝐜𝐞𝐬𝐬 — 𝐒𝐭𝐞𝐩 𝐛𝐲 𝐒𝐭𝐞𝐩 1️⃣ 𝐂𝐚𝐫𝐝𝐡𝐨𝐥𝐝𝐞𝐫 — Initiates a dispute for a transaction. 2️⃣ 𝐈𝐬𝐬𝐮𝐞𝐫 — Sends the transaction back to the acquirer electronically (i.e. Citi, Santander, Chase...) 3️⃣ 𝐀𝐜𝐪𝐮𝐢𝐫𝐞𝐫 — Receives the chargeback, resolves or forwards to the merchant (i.e. Checkout.com, Getnet, Adyen...) 4️⃣ 𝐌𝐞𝐫𝐜𝐡𝐚𝐧𝐭 — Accepts the chargeback or fights it by sending compelling evidence to the acquirer. 5️⃣ 𝐀𝐜𝐪𝐮𝐢𝐫𝐞𝐫 — Reviews the merchant’s evidence and forwards it to the issuer (i.e. Checkout.com, Getnet, Adyen...) 6️⃣ 𝐈𝐬𝐬𝐮𝐞𝐫 — Reviews the evidence and makes a decision on the case (i.e. Citi, Santander, Chase...) 7️⃣ 𝐂𝐚𝐫𝐝𝐡𝐨𝐥𝐝𝐞𝐫 & 𝐌𝐞𝐫𝐜𝐡𝐚𝐧𝐭 — Are notified of the decision; either party may go to arbitration. → Throughout, orchestration can automate evidence submission, timelines, and reporting. — 𝐖𝐡𝐚𝐭 𝐢𝐬 𝐅𝐫𝐢𝐞𝐧𝐝𝐥𝐲 𝐅𝐫𝐚𝐮𝐝? ► Also known as first-party misuse, friendly fraud occurs when a legitimate customer disputes a valid charge — often claiming the transaction was unauthorized or the service not delivered. ► In travel, this can happen when a guest stays at a hotel or takes a flight, then disputes the payment post-service. 𝐌𝐚𝐢𝐧 𝐈𝐬𝐬𝐮𝐞𝐬: → High difficulty in proving service delivery → Strains merchant–customer relationships → Contributes to higher fraud ratios and acquirer scrutiny — 𝐇𝐨𝐰 𝐏𝐚𝐲𝐦𝐞𝐧𝐭 𝐎𝐫𝐜𝐡𝐞𝐬𝐭𝐫𝐚𝐭𝐢𝐨𝐧 𝐂𝐨𝐦𝐛𝐚𝐭𝐬 𝐂𝐡𝐚𝐫𝐠𝐞𝐛𝐚𝐜𝐤𝐬 ✔ 𝐀𝐮𝐭𝐨𝐦𝐚𝐭𝐞𝐝 𝐃𝐢𝐬𝐩𝐮𝐭𝐞 𝐑𝐞𝐬𝐩𝐨𝐧𝐬𝐞𝐬 — Instantly submit transaction details, receipts, and refund confirmations. ✔ 𝐃𝐚𝐭𝐚 𝐒𝐜𝐢𝐞𝐧𝐜𝐞 & 𝐏𝐚𝐭𝐭𝐞𝐫𝐧 𝐑𝐞𝐜𝐨𝐠𝐧𝐢𝐭𝐢𝐨𝐧 — Identify repeat offenders and suspicious dispute behavior. ✔ 𝐏𝐫𝐞𝐯𝐞𝐧𝐭𝐢𝐯𝐞 𝐒𝐜𝐫𝐞𝐞𝐧𝐢𝐧𝐠 — Integrate fraud tools to reduce invalid transactions before they occur. ✔ 𝐂𝐞𝐧𝐭𝐫𝐚𝐥𝐢𝐳𝐞𝐝 𝐂𝐚𝐬𝐞 𝐌𝐚𝐧𝐚𝐠𝐞𝐦𝐞𝐧𝐭 — Manage all disputes from multiple PSPs and acquirers in one platform. → 𝐓𝐡𝐞 𝐫𝐞𝐬𝐮𝐥𝐭: faster resolution, reduced loss rates, and better win ratios. — Source: CellPoint Digital | Steven Osei ► Subscribe to 𝐓𝐡𝐞 𝐏𝐚𝐲𝐦𝐞𝐧𝐭𝐬 𝐁𝐫𝐞𝐰𝐬: https://lnkd.in/g5cDhnjC ► Connecting the dots in payments... | Marcel van Oost