Going overseas with no questions - Q&A on BifuPAY risk control product [Part 2]

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Q12: I heard that there is a "full compensation for stolen card rejection" service on the market. It sounds very tempting. Should I accept it?

Ant International PAY: In the case of international card fraud, overseas consumers (cardholders) initiate a stolen card rejection request to the issuing bank. After the card group intervenes, it will be judged to be responsible for the stolen card loss, which is usually borne by the merchant. In order to reduce the merchant's financial losses, a risk control solution called "compensation" has now appeared in the market.

"Compensation" refers to an order approved by the risk control service provider. If it is still rejected, the merchant does not need to be responsible, but the risk control service provider will bear the financial loss caused by the fraudulent rejection. In order to obtain the "compensation" service, merchants only need to pay a certain percentage of the review fee for the approved order.

This strategy can help merchants to completely avoid the risk and cost of chargebacks to a certain extent, but there are three points to note in the "compensation" model:

First, for merchants, some payment methods may not be covered by the compensation, and the financial losses caused by chargebacks can only be borne by themselves.

Second, in some cases, the compensation plan will make the risk control service provider more stringent in order to protect the financial health of the service provider itself. Especially when the risk level of the merchant is high, the risk control service provider will implement a stricter risk control strategy, resulting in a lower payment approval rate, which is not conducive to transaction completion and customer experience.

In summary, for merchants, "compensation" is not necessarily the best solution, and of course it is not the only solution. Non-"compensation" methods can also help merchants improve the success rate and reduce costs, and the risk preferences of merchants at different stages can be flexibly adjusted and adapted to achieve a win-win situation.

Q13: For our overseas merchants, whether overseas consumers (cardholders) find that their credit cards have been stolen, when they find that they have been stolen, and whether they file a chargeback after discovering it, everything is opaque. In addition to passively waiting to respond, what else can we do proactively?

Ant International PAY: In fact, there is a process from the time when overseas consumers (cardholders) discover that their credit cards may have been stolen until the consumer initiates a chargeback, which is called the "pre-dispute stage". Taking action at this stage is most likely to help merchants prevent chargebacks in advance, which has positive significance.

At this stage, the card organization will provide some solutions. The principle is that when the cardholder contacts the issuing bank because he thinks there is a question about the order, the card organization will provide the issuing bank with more detailed information about the transaction. Based on these detailed information, the cardholder can digest and resolve the questions about the order in a timely manner, thereby helping merchants reduce the initiation of friendly fraud chargeback disputes.

In addition, this solution has another benefit, that is, in the period from the time when the consumer disputes to the time before the chargeback is actually initiated, the merchant can directly refund the transaction that is determined to be refunded. This quick and fast refund operation is conducive to reducing the pressure on merchants to face the chargeback assessment of the card group, and will also reduce the fees and costs of merchants for handling chargebacks.

Note: Friendly fraud refers to customers actually purchasing products or services, but later claiming that it is fraudulent or unauthorized. The main difference between friendly fraud and traditional fraud is that friendly fraud is usually not intentional. Despite this, friendly fraud is still one of the biggest threats facing merchants going overseas in terms of fraud. According to statistics, friendly fraud has grown at a rate of 20% per year in the past few years and has caused a loss of US$4 billion to the global economy.

Q14: If the consumer has already filed a chargeback, can we still recover the loss?

Ant International Bifu PAY: Of course you can! Many merchants do not understand or even do not know at all that if the consumer initiates a chargeback, they can submit an appeal to the card group. This appeal is called "dispute protest". Failure to protest will result in the loss of chargeback funds in vain; another part of the merchants know that they need to argue and protest, but they lack experience and do not know what defense materials they need to provide to the card group. Preparing these materials can take as short as tens of minutes or as long as several days, so the time cost is very high, and lack of experience will lead to a low success rate of protests.

Professional, intelligent and simple dispute defense solutions can help merchants greatly improve the success rate. For example, the dispute defense solution of Bifu PAY risk control service. Based on the underlying algorithms of Bifu PAY and Ant Group, through a large amount of data accumulation and model training, the AI algorithm model of Bifu PAY risk control is formed. It will analyze the corresponding results based on previous successful experiences, card group standards, etc., and guide merchants to submit corresponding key materials. This AI expert advice can help merchants prepare defense documents more accurately, improve the effectiveness and success rate of stolen card defense, and achieve the recovery of capital losses caused by stolen card rejection.

In addition, in terms of time, after the merchant's information is imported into the template, the algorithm will classify and analyze the information within a few minutes, greatly reducing the merchant's cost and effectively improving the success rate of defense.

Q15: Is it necessary for merchants to set up a special risk control team to deal with risks?

Ant International Bifu PAY: Although some merchants may think that it is unnecessary to set up a special team for a payment risk problem with an uncertain probability of occurrence in the future, the problem with international card theft is that once large-scale fraud really occurs, the risk is 100% for a single merchant, and it has a far-reaching impact, and even affects the overall development of the company's overseas strategy. Therefore, it is recommended that merchants can deploy risk control teams on demand at appropriate times.

Q16: If a risk control team needs to be established, what should be the approximate size? How should the team be divided?

Ant International Bifu PAY: For most merchants going overseas, the risk control team does not need to be very large. Depending on the scale of the company's business, whether it is 2-3 people or 5-10 people, a mature risk control team can be formed. According to the specific needs of merchants, there are usually two types of divisions for team division:

One is to divide according to the overseas region. As mentioned above, according to the characteristics of different overseas markets, special personnel can be arranged to be responsible for the risk control of the local market, especially to strengthen the risk control personnel in high-risk areas;

The second is to divide according to the business line, and separately configure risk control personnel for the core business line or high-risk categories, and specifically follow up on the risk control needs of this line, so as to connect more efficiently with payment and risk control service providers.

Q17: What are the unique advantages of Bifu PAY in payment risk control?

Ant International Bifu PAY: Bifu PAY's risk control concept is to provide "comprehensive solutions + one-stop personal service".

Bifu PAY not only provides intelligent decision-making services for real-time scanning of transactions, but also continuously launches configurable risk control tool products. Based on expert experience, it provides merchants with professional risk control suggestions to help them identify and control risks.

It can provide flexible API integration methods according to the risk control needs of merchants themselves. You can use the embedded risk control of acquiring or choose an independent risk control API method for calling.

The uniqueness of Bifu PAY's risk control service is that the risk control algorithm is based on AI, which can continuously learn in depth and iterate automatically. Through massive data and massive features, it can accurately mine potential fraudulent behaviors, provide refined, dynamic, and grid-based regulation, and accurately judge risks at millisecond speed.

At the same time, Bifu PAY also has an international professional fraud analyst team with rich and valuable international risk control experience. While being familiar with the business, it can combine experience with technology to provide strong risk management support for overseas merchants.

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