This report explores four key trends in teh payments space, and their importance to issuers, merchants and fintechs in reducing losses from fraud and unnecessary chargebacks while also delivering a next-gen customer experience.

This report takes a closer look at the threat of friendly fraud, by first explaining the spectrum of friendly fraud and exploring whether merchants and issuers are in fact “training” cardholders to initiate disputes. It also examines the balancing act that merchants and issuers must navigate while trying to reduce friendly fraud, while also preserving important customer relationships. Lastly, it details how two companies are addressing the problem, and then outlines six best practices for controlling the damage.

From the report, “The bottom line is that good customers who transact online are suffering a bad purchasing experience – and this is doubly harmful to both card issuers and merchants. Cardholders may elect to abandon a purchase altogether, seek a different online store to minimize purchase friction, or pull out a different card – sending their go-to card to the back of wallet. This paper explores the size of the problem, explains the destructive impact on customers who are wrongly turned away, delves into why transactions are declined and reveals how the industry currently manages declines from both a card issuer and merchant perspective. Finally, it presents some possible approaches to the problem, including several pilot programs that Ethoca currently has underway with card issuers and merchants.”