I’ve been a fan of Stripe ever since I looked at their API. It’s the reason they were the first tool that Integrated into PressPay. But, there’s another – more compelling – reason that I personally use Stripe for credit card processing: chargebacks.
There are a lot of credit card processors that have ridiculous fees around chargebacks. I’ve worked with one company that charged $15 when the customer charged back their purchase and they charged $15 for you to dispute the chargeback. Neither of those charges were refundable. So, even if you were the victim of fraud, you had to spend $30 to defend yourself against the chargeback. As a result, we never fought chargebacks when we were using that credit card processor. Some of our customers figured out that we were never disputing chargebacks and they started posting on reddit that you could get free stuff from us by ordering with your credit card and then just disputing the charge.
Not Stripe. Stripe deducts $15 from your account when a customer charges back a purchase. But, they don’t charge you to dispute the chargeback. And, they refund the $15 fee if the dispute is resolved in your favor. So, for the first time ever, I disputed a chargeback. And then this happened:
We have good news for you! The disputed payment from August 29 was successfully resolved in your favor by your customer’s bank or credit card company.
I won! The part that really blows me away is that I’d always assumed that you could not win this kind of dispute. But, because I was using Stripe, I fought the charge anyway. After all, it didn’t cost me anything other than a few minutes of looking through my records and sending an email stating why I thought the charge was legitimate.
The most important difference, however, is that the fraudsters are going to learn that I dispute every chargeback. They will see that I’m not a soft target and they’ll move on to someone else. I’m really looking forward to spending more time working for my customers and less time fighting against the fraudsters.
Now, while Stripe is the right choice to fight fraudulent chargebacks, there are other types of fraud that we still need to deal with. For instance, did you know that people who steal credit card numbers will use online marketplaces to test the numbers to see which ones are still active? They do this to protect their reputation for selling high quality stolen numbers. This is bad for us because it creates a liability for every online marketplace that they use. You see, those charges eventually get back to the owner of the credit card. And, that owner eventually charges back those transactions. At that point, you just have to eat the $15 chargeback fee.
What if you could identify a fraudster before you were hit with a chargeback? That’s the question that a great little company called Sift Science is answering. They’re collecting massive amounts of data and using machine learning to find patterns of fraud. This means they can tell you who’s a fraudster and who’s a customer before you get his with a chargeback.
Much like Stripe, I’m really impressed with Sift Science. That’s why I’ve decided that they will be the next technology that I integrate into PressPay. If you hate fraud as much as I do, watch this space for the next release of PressPay which will give you some great tools for fighting the fraudsters.