Chargebacks were eating the margin
A mid-size payment processor needed to see risk before the dispute landed — and give merchants a fighting chance to respond.
A mid-size payment processor needed to see risk before the dispute landed — and give merchants a fighting chance to respond.
Chargebacks and disputes were climbing. By the time a claim arrived, the money was often gone and the merchant was on the back foot. The processor had data — transaction patterns, velocity, merchant history — but it lived in silos. There was no single system that could score each transaction in near real time and nudge either the issuer or the merchant to act.
We built a transaction-risk layer that ingests auth and settlement feeds, enriches them with merchant and card behavior, and produces a risk score and recommended action per transaction. High-risk flows can trigger alerts to the merchant (“consider contacting this customer”) or to the processor’s ops team. We also added a small merchant-facing dashboard: dispute trends, top risk factors, and simple “what to do next” guidance so they could reduce disputes before they became chargebacks.
Chargeback rates dropped meaningfully in the first year. Merchants who used the dashboard saw even larger improvements. The processor repurposed the same pipeline for internal fraud and compliance checks, so one build is now paying off in multiple lanes.