To help its merchants reduce chargebacks and the associated revenue losses, technology-driven payment orchestration platform Solidgate partnered with Visa to integrate our dispute prevention, friendly fraud deflection, and dispute resolution solutions.
Why should businesses aim to prevent or deflect chargebacks?
For businesses operating in eCommerce, subscriptions, SaaS and digital goods, chargebacks relating to card-not-present (CNP) transactions can represent a significant threat to revenue. Chargebacks take time and effort to manage and can soon erode revenue streams. What's more, businesses with high chargeback volumes may face penalties from payment processors and card networks.
To help its merchants improve management of post-purchase disputes and chargebacks, technology-driven payment orchestration platform Solidgate partnered with Visa to integrate our dispute prevention and deflection solutions. In addition, the company deployed a Visa solution that helps improve and automate refund management and further reduce chargebacks.
In just one year, Solidgate's merchants avoided $10M in lost revenue. 1
What Visa solutions can help prevent and deflect chargebacks?
If a cardholder doesn't recognize a transaction on their credit card statement, they will likely contact their bank to query it. Perhaps the merchant descriptor isn't clear, or they simply don't remember making the purchase. Without enough transaction detail, queries like these can soon become disputes that may trigger chargebacks.
Visa offers a range of solutions to help businesses improve dispute and chargeback management through enhanced prevention, deflection and resolution. Our prevention solution, Order Insight, which helps businesses find their Dispute Opportunity Zone, harnesses the power of data to promote transaction transparency to issuers, merchants, and cardholders.
Solidgate integrated Order Insight into its platform to enable early intervention and help prevent queries on Visa card transactions from escalating into chargebacks. Now, if a cardholder contacts their bank to inquire about a transaction made with a merchant using the Solidgate platform, the contact center agent can retrieve and share transaction details directly from the merchant. These details can help the cardholder recognize the purchase—clearing up confusion, preventing unnecessary chargeback initiation, and saving the transaction.
How can merchants guard against friendly fraud?
Although many cardholders who query a transaction genuinely don't recognize or recall it, others may be aiming to commit friendly fraud. Also known as first-party fraud or first-party misuse, friendly fraud occurs when a customer disputes a card transaction despite having received the goods or services. The Merchant Risk Council estimates that friendly fraud represents 20% of all disputes globally, 2 so it's an issue merchants should look to address to avoid revenue losses and unnecessary chargebacks. However, friendly fraud can be challenging to combat because the dispute is initiated by the genuine cardholder, not a fraudster.
In the past, merchants typically had to wait for a dispute to be filed before tackling an instance of friendly fraud. Now, Compelling Evidence 3.0 (CE3.0) shifts how merchants handle this type of fraud by tracking—in real time—critical data points from previous legitimate transactions, such as:
- Device IDs
- IP addresses
- Login credentials
Visa's Order Insight has a feature called Systematic Dispute Deflection, which leverages CE3.0 to provide pre-dispute protection. With consistent CE3.0 datapoints across the disputed and historical transaction, the request can be verified as legitimate and blocked from moving forward. Using CE3.0 to deflect friendly fraud helps merchants avoid the cost and effort of dealing with chargebacks that would otherwise have been filed, as well as the financial losses associated with any unwarranted refunds.
Once integrated, CE3.0 provides hands-off defense that works with the merchant's system to meet data quality standards, formatting requirements, and response SLAs, working automatically to help protect the merchant’s revenue.
How do Solidgate's merchants benefit from CE3.0?
Solidgate has seen firsthand how CE3.0 can deliver significant value to its merchants: in just one year, it helped save $10M in revenue, before a single chargeback was filed.1
For businesses handling high transaction volumes and recurring payments (such as digital goods, subscriptions, SaaS, and eCommerce), this can represent a significant win. With CE3.0, Solidgate's merchants get automated protection that saves up to 15% of lost revenue,1 freeing up their teams to focus on scaling the business without the constant threat of chargebacks.
Beyond reducing chargeback fees, CE3.0 can help merchants:
- Protect revenue streams
- Reduce the time and resources needed to manage disputes and recover from their fallout
- Lower the long-term costs of fraud
How does Solidgate help its merchants improve refund management?
In addition to leveraging Visa solutions to help its merchants prevent and deflect chargebacks and friendly fraud, Solidgate deployed Visa's Rapid Dispute Resolution (RDR). This solution helps merchants stop legitimate refund claims from becoming chargebacks by automatically refunding cardholders in the pre-dispute stage.
Using merchant-customized parameters, RDR's decision engine determines whether a refund is warranted. If it is, RDR initiates an automated credit to the customer's Visa card. Merchants can customize RDR's parameters to meet their business needs based on analysis of previous chargebacks, identification of any patterns, and other relevant criteria. For example, a merchant may decide that disputes worth less than $40 will always be automatically refunded as they don't justify the time and cost of representment. Solidgate advises its merchants to keep track of the refund rate and revise their parameters as needed.
RDR helps streamline the dispute resolution process for merchants by reducing the time and effort involved. Merchants have full visibility of the process, helping them manage their resources and plan accordingly. Once a dispute has been resolved by a credit, it's no longer possible to initiate a chargeback, so merchants avoid the associated chargeback fees and potential issues with their payment processor.
Using RDR also enhances the customer experience, as promptly addressing and resolving legitimate refund claims can contribute to customer satisfaction and loyalty.
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1 Solidgate: 'Visa Compelling Evidence 3.0: How to save $ millions in revenue in one year'
2 Merchant Risk Council: '2025 Global Payments & Fraud Report'