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KEEPING THE CHARGEBACK GRINCH FROM RUINING CHRISTMAS TRAVEL

Gabe McGloin, Head of Merchant Sales & International Business Development at Verifi

 

As we all turn our attention to Christmas travel, we are hoping for twinkling lights, Christmas markets and lots of joy. However, with some of the very public travel disasters that have hit the headlines this year –  Thomas Cook comes to mind – many travellers may be more cautious than normal.

The tour operator’s collapse earlier this year left more than half a million summer holidaymakers stranded overseas, with many unable to afford a flight back home – their trip of a lifetime turning into a waking nightmare. What’s worse, they had to pay for food and accommodation while waiting for rescue. One unlucky traveller was even billed an additional £2,500 by a Florida hotel after Thomas Cook failed to remit his original payment.

While failures of this scale are thankfully rare in the travel industry, such financial calamities are among the main causes of chargebacks – requests from consumers to reverse payments made from their debit or credit card. Few industries are as exposed to chargebacks as the travel sector; given the intense competition, minimising such losses needs to be an urgent priority for every business in the category. But why are chargebacks so common, and what can operators do about it?

 

Why travellers demand their money back

Whether in travel or perhaps any other industry, some people will take the opportunity to defraud financial institutions on their own legitimate purchases: the expensive camera that’s “stolen” and claimed on the travel insurance; the disputed restaurant bill for a meal that they swear they never ate, and so on.

In truth, fraudulent claims like these make up a small percentage of chargeback claims. More often it’s simply a case of forgetfulness behind transaction disputes, which may result in chargebacks from  consumers being charged for no-shows, charges for dining and minibar consumption, and retail purchases.

It’s only when people return after their travels and the January reality sets in that they open up their credit card statement and, with great surprise, see a list of transactions that they don’t recognise.

It doesn’t matter if people are making claims in good faith and honest forgetfulness. The cost of refunding or investigating these payments is a major drain on travel businesses’ resources, which is why they need to put themselves in charge of improving refund processes.

 

Striking a balance

Chargebacks aren’t just a matter of losing money, important as that is. It’s also a process that is fraught with reputational risk. If travel operators are too harsh, or too untrusting in their response to customer claims, they can make their customers feel like they’re being accused of lying – and victimisation is a poor basis for a long-lasting and loyal relationship.

That doesn’t mean that travel operators should accept each and every chargeback as the cost of doing business. On the contrary: they can take a number of proactive steps to help prevent chargebacks from happening – and, just as importantly, better protect their customers from genuine errors.

Good chargeback prevention practices are more than just a guard against fraud: they are an essential element of great customer service, where disputes are resolved quickly thanks to full access to comprehensive transaction records.

Investigating chargebacks can be difficult enough for your average merchant to achieve, but for the travel industry it’s even harder (and more expensive) since these transactions usually take place abroad. Given all the attendant difficulties of language, time differences and other complications, it makes much more sense for travel businesses to focus on prevention.

 

The data-sharing solution

Fortunately, there have been many recent innovations in the payments industry that makes it much easier for businesses to investigate transactions effectively. These include technologies that facilitate better and more timely exchange of relevant transaction or dispute data between merchants and card issuers, helping to slash the time required for resolving disputes.

The key to reducing chargebacks is much closer collaboration between travel operators and issuers throughout the entire dispute process. Implementing steps such as providing clear billing descriptors and fostering order data-sharing between merchant and issuer can make a massive difference to the whole process, especially in reducing dispute volume overall.

For example, the latest collaboration technologies enable issuer staff members to access transaction information from a travel company’s CRM system, and then use this to check disputed transactions quickly. They can also push near real-time dispute notifications so that the business can review and resolve disputes faster to reduce time, resources, and costs associated with the chargeback process.

These technologies don’t just save time and money through reducing chargebacks and streamlining the investigatory process. They also result in lower overall dispute volumes and, perhaps even more important, improved loyalty from the customers themselves. Even if disputes aren’t ruled in their favour, customers will appreciate the speed with which the query was resolved. Meanwhile, providing comprehensive information on the transaction will mean that customers won’t have cause to continue their complaint – bringing Christmas cheer to travellers and providers alike.

 

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BATTLEFACE RECEIVES INVESTMENT FROM FINTECH VENTURES FUND

battleface Inc., a rapidly growing tech-enabled insurance startup focused on providing travel insurance products for unconventional travellers worldwide, announced today that it successfully closed its seed financing round with backing from leading strategic and venture capital investors.

 

Atlanta, Georgia-based Fintech Ventures Fund has invested in the company, joining existing investors Greenlight Re and Tangiers Group. This investment will be used to expand software development, hire sales and business development personnel, and further the company’s global reach.

 

Sasha Gainullin

battleface is led by a team of travel insurance experts. CEO Sasha Gainullin previously developed global operations for AIG Travel Guard and has worked with battleface since its inception. Managing Director Paul Simmonds brings experience as a Lloyd’s of London underwriter with previous leadership roles at Berkley Syndicate, CNA Hardy, Brit, and Goshawk.

 

“We got our start because many travellers couldn’t find the right insurance products with coverage for their unique travel destinations and real needs,” said Gainullin. “With the latest investment from Fintech Ventures Fund, we’ll continue to expand our B2B partnerships custom-building travel insurance solutions for groups, including business and NGO travellers, associations and membership-based organisations.”

 

battleface combines innovative technology and underwriting to create, distribute and service specialty travel insurance products for people in both retail and wholesale. Products are supported by a network of 24/7 assistance coordinators, medical providers and on-the-ground field agents who provide emergency claims, medical and travel assistance services on a global basis.

 

Fintech Ventures Partner Lucas Timberlake said: “A core area of our fund’s investment thesis is that technology can be leveraged to more efficiently provide insurance products to markets that have been underserved by current offerings. We believe that battleface’s seasoned management team will create an industry leader in the travel insurance space. It is for these reasons that we are excited support the company’s future growth.”

 

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VANQUIS BANK PARTNERS WITH HOOYUTO DIGITALISE KYC PROCESSES

HooYu KYC digital journey deployed during the customer lifecycle on a risk-based approach

 

Leading customer onboarding and KYC technology firm, HooYu, has announced a partnership to digitalise Vanquis Bank’s KYC processes.  The HooYu KYC journey has been selected to provide additional identity proofing during the customer lifecycle when customers perform a potentially high-risk action on their accounts.

 

Vanquis Bank is part of the Provident Financial Group, a UK and Ireland business with over 140 years’ experience in lending to consumers who are not well served by mainstream lenders. With millions of customers, Vanquis needed to find a way to help balance fraud prevention and KYC with a great customer experience.

 

Existing customers calling in to the change the details on their account were in some cases having to wait weeks before the change could be approved.   The team at Vanquis Bank is continually looking to improve how their products work for their customers and that they are easy to apply for and manage.  Vanquis Bank decided to implement an ID document validation solution that would speed up customer lifecycle management and improve the customer experience.

 

Sue Singleton, Process Change Assurance Manager at Vanquis Bank said, “By adding HooYu to our KYC tools, we can improve some of our higher risk customer processes and can now facilitate customer requests without asking the customer to post in copies of documentation. Our agents deal with thousands of customers a day and now what could have been a delay of weeks for our customers, can be achieved in a matter of minutes with HooYu”.

 

David Pope, Marketing Director at HooYu said, “It’s been great to see the results of Vanquis implementing the HooYu digital journey and how the HooYu UI and UX tools are helping their customers though the KYC process.”  

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