For ages, the online platform has been a double-edged sword. It has had advantages associated with business growth. On the contrary, it is always faced with the prospects of fraud, misinformation, and information misuse, which are significant deterrents.
One of the negative aspects of e-revolution is that there is a big issue called fraud.
For SMEs, Small and Medium Enterprises, and E-commerce sites, this could pose a great challenge because they could lose profits in the great sense and confidence from customers as well.
This problem was especially acute during the COVID-19 when people were not allowed to go to devoted stores, but rather resorts were taken for online shopping.
Among the most prominent problems that e-commerce retailers have to cope with is the issue of chargeback. In its simplest terms, chargeback refers to a situation when the issuer of a credit card cancels the earlier made transaction and makes a return to the cardholder’s account.
There are many such instances, such as no receipt being sent, no goods being said to have been delivered, etc.
Originally, they were developed to protect the interests of clients, but today, lately managed to benefit from this policy and a considerable number of online retailers suffer huge losses because of this policy.
Let's get acquainted with Ariel and Avia, technology-savvy brothers from Jerusalem.
Young ‘nerds’ who started out at the age of 12 with their first e-commerce store in hopes that they would make something good out of their lives despite their low incomes.
Six years later, they created Babe Cosmetics, an e-commerce brand with over half a million customers.
In this venture, they faced the intricacies of online payments, especially chargebacks and related costs.
The growing threat of credit fraud and chargebacks against online shops taught that lesson to the brothers and in 2021 they founded Chargeflow.
What sets them apart
While existing risk-tech firms, such as Forter and Riskified targeting large businesses mainly on solving the problem of fraud abuse, Chargeflow is designed to help out small and middle size e-commerce companies.
Their solution allows small merchants to gain perspective and clarity on costs with easy setup and without a monthly subscription, catering to lower price points within the industry.
Chargeflow’s main market is centered on the United States where e-commerce fraud and disputes could cost businesses around 240 billion dollars every year.
It’s not just a loss of money but also a huge operational burden since the process of resolving each chargeback wind up taking an average of 40 minutes.
In recent times, credit card fraud has changed from issues such as stolen credit cards to honest customers ordering goods and never receiving them, leaving this problem even more intricate.
At present, the company has moved on to become the provider to thousands of store owners in more than 85 countries providing site easy registration and new business in chargeback services.
It is worth noting that the growth of the business and the transformation of the brothers from youthful new gadgets into successful entrepreneurs do not signify a surrender to one of the issues in e-commerce that requires a solution.
About 20 million dollars has been raised for now from OpenView VC and other angel investors and seek to enter more markets
and find new tools to mitigate credit fraud risk based on a fundamental question “How can I trust the man who is transacting from the other end?