Ecommpay, a worldwide payment processor and card acquirer operating across the UK and Europe, has launched local acquiring services in the United States. This strategic move empowers merchants from the UK and EU to boldly enter the North American market. Additionally, Ecommpay is introducing a protective measure against chargebacks stemming from fraud-related issues. This proactive solution is designed to prevent merchants from enduring unnecessary setbacks in terms of time and financial losses caused by chargebacks.
The anticipated surge in global cross-border payments, estimated to reach $250 trillion by 2027, positions the US as a pivotal player in this dynamic landscape. However, the adoption of 3-D Secure (3DS) payments, which offer augmented fraud protection for merchants, consumers, and card issuers, remains optional within the US. In contrast, regulatory mandates in the UK and Europe have enforced the use of 3DS as a protective measure for all parties involved.
Drawing insights from Ecommpay’s data, the absence of 3DS verification results in a surge of fraud-related chargebacks, leading to a potential loss of up to 30% in sales within the US market. This heightened chargeback rate poses a notable challenge for merchants.
Ecommpay’s data also illuminates that merchants bear a 1.7% loss in business turnover due to chargebacks originating from the US market. By embracing Ecommpay’s protective solution, this figure dwindles significantly to a mere 0.5%. To further cement its commitment to merchants’ welfare and promote industry best practices, Ecommpay is facilitating local acquiring services tailored to the US market. This comprehensive approach incorporates a robust fraud prevention and risk management solution, extending protection against diverse forms of fraud-related chargebacks.
This comprehensive coverage acts as a shield, safeguarding merchants from not only diminished sales but also the burdens of chargeback arbitration fees (which can escalate to $500 per case), heightened operational expenses, and the potential loss of productivity. Ecommpay takes on the responsibility of merchant expenses through this insurance offering, appending only a modest supplementary fee to each transaction.
To illustrate, consider a merchant that attains sales exceeding $9,000,000 during the initial half of 2023. Without the buffer of Ecommpay’s chargeback protection, this merchant would contend with a chargeback rate of roughly 4.3%, equating to $387,574. By harnessing Ecommpay’s chargeback safeguard, the merchant stands to conserve an estimated $342,574, corresponding to a substantial 3.8% of their overall turnover.
