Disputes and chargebacks are one of the most complicated things when you sell online. And when you sell services, it’s even harder for your business to win these disputes. In this article, we’re going to explore the best way to prevent chargebacks. Early Fraud Warnings or EFWs are your secret weapon to combat chargeback fraud, especially if you sell services online.
What are Early Fraud Warnings?
EFWs are alerts automatically generated by credit card issuers about disputed transactions. This is an alert generated before an actual dispute is raised, and they can be used in your advantage. Once a customer makes a claim to their issuing bank, the bank raises a warning to the credit card issuer. In the case of Visa cards, it’s called the Visa TC40 system, and in the case of Mastercard, the Mastercard SAFE system. TC40 and SAFE are fully automated notification systems that provide you the warning of an upcoming dispute. Actually, more than 82% of EFWs end up being a real dispute, so this is an effective method of preventing chargebacks.
Implement Early Fraud Warnings to prevent chargebacks
As EFWs are fully automated, you may need to contact your credit card processor to implement it. This may require your business to establish a direct connection with both Visa and Mastercard’s notification systems. Also, solutions like Stripe and Adyen, implement APIs that can receive EFWs and do actions based on these warnings. Keep in mind that, if you sell services online, the better course of action after receiving an EFW is just doing a full refund. If a refund is made on the transaction that is going to be disputed, this will automatically prevent the dispute to be placed on the first place. Refunded transactions cannot be disputed.
How to prevent chargebacks with PayForm’s EFW notifications?
PayForm has implemented an automated email notification system for merchants that use both PayForm and Stripe. No code required. This warning system will direct you to the exact transaction that has been accused as fraudulent by the cardholder, so you can easily refund it and prevent a chargeback before it happens.
We understand that refunding a transaction is not always your desired outcome, especially if you sell products. For this reason, PayForm lets you decide what you will do once you receive an EFW.
PayForm’s EFW notifications are the best way to prevent chargebacks in your business, without any coding required. EFW notifications are totally free and included in every plan.