Goodbye, ChargebacksJul 03, 2019
The travel and airline industries lose more than US$20bn every year through the fraudulent use of credit card data. Robert Albrecht, Head of New Business, Paysafecash, sheds some light on three ways Paysafecash can not only help mitigate that situation, but also help travel agencies and airlines acquire new customers.
Why is fraud such a big issue for the travel and aviation industries?
Simply because an extremely sizeable percentage of flights and travel arrangements are paid for using credit cards, with all its unavoidable side effects that creates. A study from 2017 revealed that the costs for travel intermediaries related to fraud might be as high as US$21bn, and are projected to grow as high as US$25bn in 2020.
What are the most popular fraud schemes in these industries?
The long-standing threat comes from stolen credit cards, payment information, or security credentials used to defraud the travel agency or airline, leaving it to deal with the chargebacks. Another problem is security breaches. Today, travel agents and airlines go to great lengths to protect themselves against any kind of fraud.
And they should, because every customer that has experienced fraud will be very aware of the risks in future. According to a CyberSource study from 2018 conducted specifically in the airline industry, 82% of travel companies surveyed reject a booking when they suspect fraud. The good news, however, is that 46% of them also take the extra step of suggesting another payment option. And this is when Paysafecash comes into the picture.
1. No more chargebacks - ever.
What are the benefits of this new payment option?
We mitigate the risk of the fraudulent use of stolen financial information by not using that data at all. Customers who choose Paysafecash at the checkout generate a barcode for their online purchase. Then they go to our nearest payments point, a supermarket or gas station for example, and pay in cash. Since we use an offline network of cash collection locations, we eliminate the risk of exposing financial data of customers to any unauthorised party. Paying in cash is simply the safest way.
What are the advantages for travel agencies and airlines?
With Paysafecash there will be no chargebacks. Since we collect cash for our customers the moment the barcode is paid, we guarantee every cent of it to them. The same applies to data theft. Paysafecash merchants do not have to worry about the safe storage of their customers’ financial data - because there is no financial data to protect.
2. Outstanding monitoring
Doesn´t the use of cash also mean that there is a higher risk of money laundering issues?
No. We face very strict regulations from the European Union as well as even stricter legislation in the individual member states in which we operate. In order to be able to offer a reliable and compliant cash collection business across more than 20 countries, we keep constantly up to date and ahead of the regulations to ensure a sustainable business and partnership.
You´ve just explained that chargeback fraud is impossible with Paysafecash. Does that mean you don´t have any strategies to detect and prevent fraudulent activities?
Of course we do. We constantly monitor all of our transactions and use all the data points we can collect in order to derive information and context. This is how we can ensure that we are best prepared for any kind of fraudulent behaviour and are prepared to stop transactions and even help law enforcement agencies in prosecution.
3. Attracting new customers
Why do you think Paysafecash is a relevant product? Isn’t everybody talking about moving towards a cashless society?
Let me give you some numbers. Would it surprise you if I tell you that the amount of cash in circulation is growing by almost 8% per year in the Euro zone? In Austria, 85% of all transactions are paid in cash, in Romania 85% of all B2C online transactions are paid in cash. That’s right, I did say online payments.
So, with Paysafecash we address a clear preference towards a traditional payment option for a large demographic of consumers, which also happens to be by far the safest. Millions of people depend on cash and even more value the guaranteed safety of it.
Do you think the security of using cash online will mean we see even more consumers turn to this payment method?
This is a key factor for us here, of course. Security seekers value the independence from credit cards or other options requiring the disclosure of information. Also it is important to state that everyone has access to cash; that is a another significant benefit. With one payment option you address all of your potential customers, regardless of whether someone has a bank account, a credit card, uses Apple Pay, Samsung Pay, Google Pay or WeChat Pay.
So Paysafecash is a great additional payment option to those that you´ve just mentioned?
Exactly, that philosophy plays to Paysafecash´s strengths. It is helping merchants to address the widest possible target groups by enabling them to pay in cash and protecting them against fraud-related costs and money laundering.
Since March 2018, Robert Albrecht has been Head of New Business and responsible for all business development activities the Paysafe group’s latest online cash payment method ‘Paysafecash’, which has been developed especially for the e-commerce sector. Previously, Mr. Albrecht worked for 11 years at the technology group, Siemens. During this time, he held various roles in Partner Management, Sales and Strategy in Germany, India, Canada and Austria, before moving to the Media Department of Siemens Convergence Creators in 2013 as Sales Director. In 2014, Mr. Albrecht was appointed Head of Pre-Sales and shortly thereafter Deputy Head of the Media Business Unit. Robert Albrecht holds a master's degree in business administration and a bachelor's degree in industrial engineering.