Mastercard and global acquirer Worldpay have announced a partnership aimed at mitigating payment fraud and reducing the prevalence of chargebacks.

Chargebacks, which are refunds requested by consumers disputing transactions, are on a steep rise, with projections indicating a surge to 337 million instances by 2026, marking a 42% increase from 2023.

The collaboration between Mastercard and Worldpay introduces the Ethoca Alerts system to Worldpay’s clientele of over one million merchants globally.

This system, developed by Mastercard, serves as an early warning mechanism designed to prevent disputes from escalating into chargebacks, thereby curbing financial losses attributable to fraudulent activities.

Ethoca Alerts operates across various payment brands, offering merchants actionable insights that enable them to halt the provision of goods or services in time to avert fraud.

Importantly, the adoption of Ethoca Alerts does not necessitate any modifications to the merchants’ existing infrastructure or operational processes.

In addition to combating fraud, this partnership is poised to enhance authorisation rates for transactions, ensuring a higher success rate among the US$2.3 trillion transactions processed by Worldpay. This improvement is expected to result from a reduction in erroneous transaction declines.

The effectiveness of Ethoca Alerts has been notable, with the system contributing to the prevention of US$1.6 billion in fraud-related losses between 2022 and 2023, safeguarding retailers against fraudulent chargeback claims.

Johan Gerber, Executive Vice President, Cyber and Intelligence at Mastercard said,

“With ecommerce thriving, we’re working to make transactions as safe and as seamless as possible for all parties.

This partnership with Worldpay extends our powerful technology to even more merchants around the world, reducing fraud. By working together, we will advance our shared goal of building trust and powering the global digital economy.”

Gabriel de Montessus, Executive Vice President, Global Enterprise at Worldpay said,

“We’re pleased to bring this solution to the market in partnership with Mastercard to deliver more value and innovation to our clients.

Creating more accessible, more flexible and more seamless ways to reduce fraud, while accelerating commerce and protect consumers and merchants is what drives us at Worldpay.”

Featured image credit: Edited from Freepik

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• Source: https://fintechnews.sg/93784/payments/worldpay-taps-mastercards-ethoca-alerts-to-reduce-payment-fraud-chargebacks/