Use Gateway Services to Protect Your Business Against Chargebacks

Secure payment systems

Are you looking for an effective method of chargeback protection for ecommerce? When you want to expand your online business, having a secure gateway service to provide chargeback protection for ecommerce can make a difference with these card not present transactions.

With a card not present transaction, which is the case with all e-commerce transactions, a variety of errors can potentially occur. One of the more predominate errors is a chargeback.

As you are no doubt aware, when a buyer requests a refund, and/or a bank enforces this refund, your business will experience financial as well as other losses. In addition to incurring potential fees, chargebacks can also cost you time that would be better spent on other facets of your business.


There are three common reasons for chargebacks:

    Product not delivered
    Service not delivered
    Consumer claims product not ordered

In addition to the customer issues listed above, chargebacks may also be an indication of actual fraud. One of the many benefits of having gateway services is that the company providing these services will handle payee authorization. This helps to ensure that online transactions are secure because a customer’s identity and authenticity can be verified by this company.

When customers have a history of chargeback transactions, a gateway service will be able to construct a profile to track their past and future transactions. This assists with determining risk factors as well as potential or actual fraud cases.

Given the level of fraudulent transactions in the United States alone, chargeback protection for ecommerce can reduce potential risk. On an annual basis, it has been estimated that credit and debit card fraud costs over $8 billion.

Data encryption techniques, which are the most secure applications, are currently being used to thwart hackers. Furthermore, when the maximum encryption is utilized, which is a 256-bit encryption, even the most successful hackers will likely be unable to access your system.

Since global e-commerce, both through desktop and mobile devices, is steadily increasing, it’s even more important to have a secure payment processing system. Every 30 seconds, it is estimated that there are $931,490 in desktop sales and $269,683 in mobile device sales.

It’s also important to note that given the large number of digital buyers in the United States, 50% are planning and/or expecting to make additional mobile purchases. A 2015 report from Statista indicated that many online shoppers are purchasing in bulk, too. There tend to be incentives for engaging in these bulk purchases.

The 2015 Statista report also indicated that there are additional incentives to purchasing expensive items online rather than in traditional brick-and-mortar shops. When shopping online, an average of $78 per order is spent by shoppers in the United States.

Given this level of sales, the last thing that you want to encounter is payment card fraud. In 2015 alone, and on a global basis, this type of fraud cost both businesses and their customers approximately $21.84 billion.
Experts concur that the cost of this fraud will amount to $31.67 billion by 2020.

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