Understanding Chargeback Protection in ChargeAutomation
Chargeback Protection is a valuable feature offered by ChargeAutomation’s platform to guard against fraud-related disputes. This protection is critical for ensuring secure and smooth payment processing during guest transactions. Below, we outline its features, benefits, recommended usage scenarios, and best practices.
Payments that have been successfully authenticated using our 3D Authentication are covered by a liability shift. Should a 3D Authenticated payment be disputed as fraudulent by the cardholder, the liability shifts from you to the card issuer. These types of disputes are handled internally, do not appear in the Dashboard, and do not result in funds being withdrawn from your account.
What is Chargeback Protection?
When you see the blue icon on a transaction within ChargeAutomation, it means that the payment or authorization is protected from fraud disputes. Transactions covered by Chargeback Protection ensure that no fraud-related disputes will arise regarding those deposits. This feature is included without additional commission fees.
Features and Benefits of Chargeback Protection
Fraud Dispute Protection: Transactions are secure from fraud claims.
Ease of Use: Chargeback Protection is automatically applied to eligible transactions.
Free Service: It is included without extra costs or commissions.
What Happens If Fraudulent Transaction Occurs
In the case of a fraudulent transaction, it becomes authenticated through 3D Secure, the liability will shift to the acquirer. In short, you are protected against misleading chargebacks since the liability is transferred.
Customer Experience (For On Session Payment)
If you have Chargeback Protection enabled in ChargeAutomation, we require the customer to complete an additional verification step with the card issuer when paying.
For on-session payments, where customer is entering credit card for first time and paying right away, customer will be prompted to complete authentication step as shown below.
Customer Experience (For Off-session Payments)
For off-session payments, where customer has already entered credit card number when making a reservation (e.g. via Booking.com or booking site), customer will receive an email link to complete an additional authentication step before they can complete the purchase flow.
When they click confirm payment, authentication page will load up shown below
Best Practices for Avoiding Fraud Disputes
Always enable Chargeback Protection for transactions where available.
Collect guest verification details, such as ID and e-signature, through ChargeAutomation to maximize your chances of winning disputes. By following these guidelines, merchants can leverage Chargeback Protection to its fullest potential, ensuring both security and peace of mind.
If a payment is authenticated, the liability for any fraudulent dispute that occurs on that payment is typically shifted from the merchant to the issuer. This means that in most cases, the merchant will not be responsible for fraud costs on authenticated payments.
Implications of Processing Transactions Without Protection
Transactions done without Chargeback Protection (e.g., through the 'authorize now' feature or without proper authentication) leave you vulnerable to fraud disputes. If authentication steps (like ID verification) are not completed, guests may have the ability to file fraud-related disputes. As a preventive measure, always reach out to guests for any incomplete verifications and encourage them to finalize these steps.
Does Customer Have to Enter Credit Card Number Again?
No. If the credit card number is already collected from the customer (i.e. via Booking.com or other means), they will not be asked to enter the card number again. They only need to complete required verification step (i.e. Enter SMS code sent to card holder).
Related Topics
For further details, explore these topics:
How to collect guest verifications within ChargeAutomation
Managing disputes and fraud claims effectively
How Does A Transaction Become Authenticated
3D Secure Authentication is additional layer of protection provided by the card issuer. 3D Authentication takes over 150 data elements in order to make a decision.
These data include Device Fingerprinting, System language, country and time zone, Transaction Type, Cardholder Account Information, Cardholder Address
Exemptions
Low-value transactions - for transactions under 30 EUR
Exceptions
There are certain circumstances where payments that are successfully authenticated using 3D Secure do not experience a liability shift. This is rare and can happen, for example, if you have an excessive level of fraud on your account and are enrolled in a fraud monitoring program
Charge Automation is a guest experience software that helps hotels & vacation rentals increase revenue, eliminate check-in queues, improve guest satisfaction, and maximize profits.