Fraud and Disputes Rank as a Top Cost for 42% of Issuers

Fraud and payment disputes are now a primary financial burden for 42% of credit and card issuers. This shift is critical for retailers to understand because your lenders are under immense pressure to tighten security. The rise of AI-driven shopping—where bots may soon select products and pay on behalf of customers—is making it harder for lenders to verify legitimate transactions quickly. When lenders struggle to distinguish between a real customer and a fraudster, the friction at your checkout increases. For merchants, this means a higher risk of false declines. If your financing partner’s fraud detection is too aggressive, legitimate customers will be turned away. Additionally, the report highlights that dispute management is becoming more expensive. As issuers invest heavily in AI to fight AI-based fraud, these costs could eventually trickle down to retailers in the form of higher merchant fees or stricter requirements for proof-of-delivery. You should prepare for a landscape where identity verification at the point of sale becomes more rigorous to protect both the lender and your revenue.

Source: PYMNTS

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