Part 3: Chargeback Recovery & Risk Operations (6 Q&As)
Q12: “Fraud chargeback guarantee” services sound attractive. Should merchants use them?
In cross-border card payments, when a cardholder disputes a transaction, issuing banks may initiate a chargeback. In most cases, liability for fraud-related disputes ultimately falls on the merchant.
To reduce this exposure, the market has introduced so-called “fraud chargeback guarantee” models.
Under this arrangement, if a transaction approved by the risk provider later results in a chargeback, the provider absorbs the fraud-related loss. In return, merchants typically pay an additional fee for each approved transaction.
At first glance, this model appears to fully eliminate chargeback risk. However, there are several important considerations:
First, not all payment methods or transaction types may be covered, meaning certain chargebacks may still fall back to the merchant.
Second, guarantee-based models often require stricter risk controls from the provider. In high-risk environments, this can result in lower approval rates, which may negatively impact conversion and customer experience.
As a result, this model is not necessarily the optimal or universal solution. For many merchants, alternative risk strategies can achieve a better balance between approval rate, cost efficiency, and growth potential.
Ultimately, the right approach depends on the merchant’s stage of development and risk appetite.
Q13: Can merchants take action before a chargeback happens?
Yes. Between the moment a cardholder notices a potentially unauthorised transaction and the formal initiation of a chargeback, there is a critical window known as the pre-dispute stage.
This stage represents one of the most effective opportunities for merchants to prevent chargebacks from occurring.
During this process, card schemes may share additional transaction information with issuing banks when a cardholder raises a concern. This helps clarify the transaction context, allowing cardholders to resolve disputes earlier and reducing the likelihood of escalation into formal chargebacks.
In some cases, merchants may also proactively issue refunds during this window when a transaction is confirmed as high-risk or disputed. This can help reduce chargeback ratios and associated processing costs.
It is important to note that a significant proportion of disputes fall under “friendly fraud”, where legitimate purchases are later claimed as unauthorised. This category continues to grow and remains one of the most challenging risks for cross-border merchants.
Q14: Can merchants recover losses after a chargeback has been filed?
Yes. Merchants can challenge chargebacks through a process known as chargeback representment.
However, many merchants either do not respond or lack the expertise to submit effective evidence. Incomplete or poorly prepared documentation often leads to avoidable losses.
A structured and intelligent dispute management process can significantly improve recovery outcomes.
For example, Antom provides an AI-assisted dispute solution that helps merchants prepare and organise evidence based on scheme requirements and historical success patterns.
By analysing transaction data and dispute rules, the system guides merchants in assembling the most relevant documentation, improving the likelihood of successful chargeback reversals.
In addition, automation reduces preparation time from days to minutes, significantly lowering operational burden while improving recovery efficiency.
Q15: Do merchants need a dedicated risk team?
While some merchants may see risk management as a secondary function, card fraud and chargeback risk can escalate quickly at scale.
When fraud occurs, the impact is often immediate and material, affecting revenue, cash flow, and even long-term expansion strategy. For this reason, many merchants choose to establish dedicated risk capabilities at the appropriate stage of growth.
Q16: What is the typical structure of a risk team?
For most cross-border merchants, a risk team does not need to be large.
Depending on business scale, a small team of 2–10 specialists is often sufficient to operate effectively.
There are two common organisational models:
1. Geographic structure
Teams are assigned by region, with dedicated focus on market-specific fraud patterns and high-risk geographies.
2. Business line structure
Risk ownership is aligned with product lines or high-risk categories, enabling closer collaboration with payment and risk partners.
Both models aim to ensure faster response times and more tailored risk decision-making.
Q17: What makes Antom’s risk capabilities unique?
Antom provides a comprehensive, end-to-end risk management framework that combines technology, expertise, and operational support.
Its risk offering includes real-time transaction monitoring, configurable risk tools, and expert advisory services designed to help merchants manage fraud more effectively.
Merchants can integrate Antom’s risk capabilities flexibly via APIs, either embedded within payment flows or as standalone risk services.
At its core, Antom’s risk engine is powered by AI-driven models that continuously learn from global transaction data, enabling real-time, granular risk decisions with high precision and speed.
In addition, Antom is supported by a global team of experienced fraud analysts, combining data intelligence with hands-on expertise to help merchants navigate complex cross-border risk environments.
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