Chargeback types in Brazilian online market

The chargebacks are increasingly common when it comes to e-commerce and online payments in Brazil.

E-commerce has grown greatly in recent years, with more consumers between the online stores as well as have purchased more frequently and in larger quantities. This growth, in turn, led to increase in proportion the levels of fraud with regard to payments in the country result of abusive behaviour by customers.

Other methods of payment other than the use of credit cards eliminate the risk of chargeback. However they represent only 21% of all e-commerce transactions in Brazil, being vulnerable to returning the product regimes.

In Brazil, the categories of products, including shoes and smartphones are considered more vulnerable to chargeback systems. This is due to the resale of ease.

With over 80 million people online, the online trade tends to grow increasingly in the Brazilian market. It is estimated that the amount will reach $ 22 billion in transactions in 2016.

Before the problem, startups like Idwall are helping merchants to prevent frauds before to payment process, but the challenge is big.

Who are these consumers?

About 30 million people had a social ascent to the middle class in recent years that have never met with credit cards and other online payment methods. This means that these individuals are more susceptible to fraud.

Although the international e-commerce companies see in Brazil a good source of income, they have to take into account that chargebacks can be made up to 12 months after purchase and nearly 100% of them are lost.

The only way to counteract and prevent this scenario is to find a provider of payment services, using their local business knowledge, decreases the risk rate and provides a one-stop payment solution.

Anti-fraud Systems

There are some data analyses systems that can help you check if purchases are legitimate or fraudulent: Clearsale, Konduto and FControl are the most famous. The data are cross-checked with the information in delivery, information of previous purchases, and some databases from other institutions.

The data can be checked such as the name and identification document; the validation of postal address with cross database with the Post Office; locating IP addresses; CPF and the financial situation, among so many others.

Payment Intermediary

Some of these intermediate payments in Brazil intended to provide a zero risk of chargebacks, although it is expected an increase in their service charges to cover cases of fraud and the possibility of chargebacks being frequent.

Additional Measures for Physical Goods

It may take a few more steps that can help you reduce the risk of chargebacks with regard to people who claim not to have received the products ordered. Between these measures you can find:

  • Measure the items sent in as much detail as possible, including the size and weight and present them in response to complaints stating incomplete deliveries;
  • Request a delivery report, or receipt from the post office in order to have more detailed information about who received the product and when received;
  • Contact customers by phone to confirm the purchase that exceeds a certain price in order to reduce the risk of charges.

Author: Team Fintech Brazil

Mapping Fintech Companies in Brazil

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