Fraud losses from card-not-present transactions in the UK totaled £470.2m in 2019, and losses from chargebacks have become a painful and costly part of doing business online.

We don't believe this should be the case.

Account-to-account payments can securely authenticate and confirm purchases using customer banking apps, and also remove the chargeback mechanism for card issuers to reclaim money from merchant's banks.

The cost of chargebacks and fraud

When merchants are forced to deal with chargebacks or card-not-present faud, they are frequently hit with significant costs:

  • Fees by merchant services providers to investigate and resolve disputes

  • Loss of disputed funds

  • Loss of non-returned merchandise or services

  • Administrative business costs

How account-to-account payments eliminate chargebacks

Chargebacks occur when a cardholder disputes a transaction, and requests that their card-issuing bank reverse it.

Open Banking account-to-account APIs initiate payments from customer bank accounts to business bank accounts, removing the chargeback mechanism for card issuers to reclaim money from retailer's banks.

This enables merchants to effectively deal with legitimate transaction disputes without having to factor in significant chargeback fees charged by merchant services providers.

How account-to-account payment help reduce fraud costs

Merchants accept liability for keeping their customers online transactions secure, and card-not-present fraud occurs when a criminal uses stolen card details to buy something.

Open Banking payment APIs are a card disintermediator; no cards or card details are required, so stolen card details cannot be used.

Instead, customers use Face ID or Touch ID with their own bank's mobile banking app to authenticate payments (Strong Customer Authentication), and no card details are required.

Leading the way

By leveraging Open Banking technologies, VibePay is leading the way in reducing payment service costs for merchants and giving both customers and merchants a more secure method to transact online.

Sources: UK Finance, Fraud: The Facts 2020


Eliminating chargebacks and reducing fraud are just some of the ways VibePay can help your business grow.  

Want to learn more about VibePay for Business? Contact the team now.