Economists forecast global growth to slump from 3.2% in 2022 to 2.7% in 2023—with many businesses are already feeling the impact. In the midst of this mass disruption, companies of every size are looking to cut costs, causing a chain reaction of belt-tightening across markets. And based on data from past economic downturns, we know businesses will face rising fraud on top of it all. As leaders strategize what it will take to safely navigate these challenging times, it will be crucial to identify and plug leaky revenue.
Chargebacks are a universal source of frustration for many companies looking to control profit loss, as they’re uniquely unpredictable and easy to exploit. Economic uncertainty only makes this worse, leading to changeable consumer behavior and increased fraud rates. According to Merchant Fraud Journal, merchants are expected to pay over $100 billion in chargebacks in 2023.
Merchants are already seeing rising disputes this year. Across the Sift network, dispute rates increased 35% in Q3 2022 versus Q1 2022. In addition to the rising rate of disputes, the average disputed dollar amount is also higher than last year—increasing 16% to $192.53. If this upwards trajectory continues, businesses could face even higher fraud rates of costly consequence in 2023.
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