Shopify is one of the leading platforms for retailers who want to expand their sales by selling products online as well as in their brick-and-mortar stores. This e-commerce platform recently made headlines with the rollout of Fraud Protect for Shopify Payments, a product announced earlier in the year. At the moment, the product is just available to select merchants, but Shopify will expand availability in the future.
How Fraud Protect for Shopify Payments Works
According to the recent press release from Shopify, Fraud Protect for Shopify Payments can guarantee all sales as a way to provide reassurance for smaller merchants. To cover the cost of this protection, Shopify will charge a small fee based on a percentage of sale. In return, Shopify promises that it will compensate merchants for fraudulent chargebacks.
Shopify also indicates that this fraud protection product will have a streamlined fulfillment process. They say that this should help businesses that are still growing, so they can lower their operating costs while enhancing customer service.
Why Fraudulent Chargebacks Matter
Any retailer knows that fraudulent chargebacks are becoming more common, with one report indicating that 2018 saw a 30 percent increase in fraudulent transactions. Other reports show that this is particularly problematic on mobile platforms, and e-commerce is hit the hardest by fraud. Forter’s 2018 Fraud Attack Index also found a dramatic 119 percent increase in return abuse for the fourth quarter of last year.
Some indicate that retailers suffered from chargeback costs of $31 billion last year alone, with $19.4 billion of this linked to cyber-shoplifting. To make matters worse, each dollar of digital fraud in 2018 cost merchants $2.94. Since Shopify has about 600,000 active stores, the deployment of the Fraud Protect for Shopify Payments has the potential to assist a large number of retailers.
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