What fraud detection tools are most effective for preventing chargebacks?

Most Effective Fraud Detection Tools for Preventing Chargebacks

1. Forter

• Specializes in eCommerce fraud prevention, automating fraud decision-making to increase approvals and reduce chargebacks.
• Offers 100% chargeback coverage for approved purchases and rapid fraud detection, with the potential to reduce chargeback rates by up to 72%.

2. Kount

• Provides AI-driven real-time risk assessments, device and IP reputation analysis, and customizable risk thresholds.
• Particularly effective for startups and small businesses, Kount helps detect payment fraud, account takeovers, and chargeback abuse.

3. Sift

• Focuses on machine learning-based risk scoring and chargeback prevention, making it ideal for digital goods and online marketplaces.

4. ClearSale

• Uses machine learning to approve orders and detect suspicious transactions, helping businesses prevent both fraud and chargebacks.

5. Ekata

• Offers advanced identity verification and data enrichment, leveraging Mastercard’s network to provide deep customer due diligence and reduce transaction fraud.

6. Chargeblast

• Provides real-time alerts for potential chargebacks and automates dispute management, allowing businesses to address issues before they escalate.

7. Chargeback Alerts (Verifi CDRN & Ethoca Alerts)

• These tools provide real-time notifications of pending chargebacks, enabling merchants to resolve disputes before they become chargebacks, often by issuing refunds or providing additional information.

8. Safetech

• Allows merchants to create custom fraud rules based on transaction data, reducing false positives while effectively blocking fraudulent transactions and minimizing chargeback rates.

9. Essential Pre-Transaction Tools

• Address Verification Service (AVS):Checks billing address against cardholder’s bank records.
• Card Verification Value (CVV):Ensures the buyer has the physical card.
• 3D Secure 2.0:Adds an extra authentication layer, sharing transaction data with banks for better risk assessment.
• Strong Customer Authentication (SCA):Multi-factor authentication to verify the buyer’s identity.

Summary Table: Top Tools and Features

Implementing a combination of these tools—especially real-time fraud detection, identity verification, and chargeback alert systems—provides the strongest defense against fraudulent chargebacks.