Last Updated on July 14, 2020 by
New research from ACI Worldwide states that non-chargeback fraud rates rose 25% from March to May, the company said in a press release. ACI’s analysis of the data suggests that the main reason for the rise is an increase in friendly fraud in the travel and ticketing industries.
In the press release, ACI attributes the drastic increase to the disruptions that have forced these industries to drastically change many of the processes and procedures that impact friendly fraud such as rebooking options and dispute resolutions.
“[Non-fraud chargebacks] have risen 25 percent and will continue to present a challenge, confirming the trend of friendly fraud we anticipated–especially for hard hit businesses in travel and ticketing–while these merchants overhaul credit and rebooking options, dispute resolution processes, supply chain visibility, and customer communication channels,” said ACI Worldwide’s executive vice president, Debbie Guerra, in the press release.
In a bit of good news, ACI’s research also found that overall fraud attempt rates had fallen during the same time period from 5.3% in March to 3.4% in May. This was a bit surprising, since the prevailing wisdom has been that an increase in transaction volume due to COVID-19 would overwhelm online merchants’ defenses and lead to huge spikes in fraud rates.
However, it is worth nothing that while rates might have dropped, the average value of attempted fraud orders increased by $18. ACI attributes the increase to electronics and retail good sales. So while some retailers seem to be getting at least some respite, certain sectors need to make sure that the increased order value of successful attempts doesn’t cancel out the decrease in volume.
Finally, ACI reports that due to the surfeit of chargebacks, the amount of time that it is taking for chargebacks to process increased from March to May. Today, it is taking an average of seven days longer for chargebacks to be processed. The press release notes that this is putting pressure on both credit card issuers and individual merchants as they try to maintain positive customer experiences despite the slowdown.
Sources: https://www.businesswire.com/news/home/20200608005014/en/81-Percent-Rise-Retail-eCommerce-Sales-ACI
