Chargeback Insurance for High Risk Payments

Chargeback Insurance for High Risk Payments

Although modern businesses have so many possibilities to get closer to potential buyers, there are still plenty of challenges that they have to undergo to keep their businesses profitable. One of such problematic matters is chargebacks. There are several solutions available on the market designed to protect you from them, and chargeback insurance is one of them. It may seem to be a great solution to the problem, but is it really? Are there other methods that are much better at ensuring your customer satisfaction which prevents them from claiming for their money to be returned.

Why Chargebacks Are Bad for Your Business?

Chargeback means the return of money to a customer based on one’s claim. There may be different reasons why such situations appear from customer’s dissatisfaction with the purchase to fraudulent activities. So, why is it a negative factor for your business? When you allow your customers to make payments using their credit cards, all transactions go through your merchant account that you have in your acquiring bank. Later, you will get funds on your business bank account. If a customer wants his/her money back, the acquiring bank will take the necessary amount of money from your merchant account, but if there is not enough money, the financial institution will have to cover expenses from own pocket.

Of course, later the bank will demand the money from you, and it is great if you have them, but what if you do not? You may have invested the funds in something, paid bills, etc. In this case, the financial gap is created, which is not great for the bank because it is the party that experiences losses if your financial situation is not good enough.

That is why before opening a merchant account for you, banks will carefully study your history of chargebacks. There is a wide range of industries that are considered to be high-risk because of possible chargebacks, and it may be problematic for some business owners to open a merchant account.

So, one of the options that now available on the market is chargeback insurance that looks like a good solution to stay protected from chargebacks, but is it really so?

What Should You Know about Chargeback Insurance?

If you lived in a perfect world, chargeback insurance would protect you from all chargebacks, but in reality, it is not so. In essence, it works like other insurance policy, which means that you sign an agreement, and pay a monthly premium to the insurer, who then covers chargebacks and fees, but not all of them.  This solution allows you to be protected somewhat, but there are still lots of expectations put on you in terms of dealing with chargebacks. It is a sort of auto insurance — it can help you in a difficult situation, but it will not make you a good driver if you are not. Does it make sense to purchase chargeback insurance? This depends on your individual situation really. However, you should not believe that you are done with chargebacks if you get such insurance because there are things that you should and can do to protect yourself from them.

How to Protect Yourself from Chargebacks?

There are a few methods that you can utilize to keep the number of chargebacks to a minimum, and they do not really require spending money, but your time.  So, you can do the following:

  • Improve your customer support;
  • Ensure prominent billing descriptor and good and clear refund policy;
  • Provide sufficient communication with your customers during and after purchases.

Who PaySpace Can Help You?

In order to fight chargeback effectively, you need to have some knowledge and experience. Moreover, there are innovative features allowing you to keep the situation under control more easily and effectively.

We at PaySpace know what has to be done to avoid possible problems associated with a large number of chargebacks, and we have a comprehensive solution for you, which will allow you to identify and prevent chargebacks and fraudulent activities. You will be able to take advantage of the following:

  • Intelligent anti-fraud solutions;
  • Unique system that you can use for predicting and decreasing the number of chargebacks and fraudulent activities;
  • Taking advantage of third-party advanced services and signals for better results;
  • Professional dispute management.

The best way to deal with chargebacks is to prevent them, and we can help you to do that. You will be able to settle disputes related to chargebacks in a quick and painless manner. We will allow you to stay updated about every detail related to this problem.

How to Find Out More Information?

Each and every business has certain specifics that have to be taken to attention to choose the best chargeback/fraud strategies and tools. That is why we need to exchange some information with you to pick the best possible services and conditions for you. On our website, you will find several contact methods, and you are very welcome to use each of them to reach our support team. You should note that we work with different businesses, including those who are going through difficulties due to a large number of chargebacks, problems with a payment processor, a low credit score, and other problematic situations.

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