Prevent Payment Chargeback frauds without adding friction for users

What is chargeback fraud?

Chargeback fraud occurs when a customer disputes a legitimate transaction, claiming it was unauthorized in order to get a refund, while still keeping the purchased goods or services. This leads to financial losses and damages merchant credibility.

Why is chargeback fraud a growing issue for online businesses?

As digital payments and e-commerce continue to rise, fraudsters exploit weak verification processes to file false disputes. This growing issue causes financial losses, operational strain, and reputational damage to merchants, especially in sectors like retail, fintech, and gaming.

How does Shufti help prevent chargeback fraud?

Shufti uses AI-powered identity verification and real-time transaction legitimacy checks to prevent chargeback fraud. By verifying users and their transactions through KYC, KYB, and behavioral analytics, Shufti helps businesses confirm the authenticity of payments before they are disputed.

Can identity verification reduce friendly fraud?

Yes. By confirming the identity of each buyer through document and biometric checks, Shufti ensures that only authorized users can complete transactions, significantly reducing the chances of friendly fraud and improving transaction security.

What’s the difference between friendly fraud and chargeback fraud?

Friendly fraud occurs when legitimate customers dispute charges unintentionally or dishonestly, while chargeback fraud is a deliberate attempt to reverse valid payments for profit, often through false claims of unauthorized transactions.

How can Shufti’s KYB verification help merchants avoid chargebacks?

Shufti’s KYB verification ensures that merchants, vendors, and partners are legitimate businesses, reducing the risk of fraudulent transactions and disputes downstream. By verifying the authenticity of partners, businesses can prevent chargeback fraud before it occurs.

What data and behavioral insights does Shufti use to detect chargeback fraud?

Shufti analyzes transaction history, device data, and user behavior patterns to spot anomalies linked to chargeback fraud. Using AI-driven analytics, it cross-checks identity details, device consistency, and dispute frequency to flag suspicious activity before false claims occur.

How can Shufti help merchants with cross-border chargeback fraud?

Cross-border chargebacks are often challenging due to discrepancies in verification standards. Shufti’s global KYC and AML screening ensure that both domestic and international transactions are thoroughly vetted, helping merchants avoid fraudulent claims across borders and ensure compliance with international regulations.

How does Shufti verify the legitimacy of users during chargeback disputes?

In the event of a chargeback dispute, Shufti's real-time verification system provides detailed identity checks and transaction validation data. By cross-referencing user behavior, device data, and identity documents, we help merchants confirm whether a transaction was legitimately disputed or fraudulent.