Chargebacks are a rising issue in digital payments today, especially for merchants who operate outside their countries. The contemporary consumer is much more deft, and traditional payment methods suffer fraud, dispute, and processing errors, which cause loss to merchants’ pockets. Alternative payments are helping merchants reinvest in how to process payments and avoid chargebacks. With a lot more options for strong authentication and real-time verification, merchants now have a much better alternative to make cross-border payments smarter and secure.  

Alternative Payment Methods

Alternative payment methods (APM) refer to atypical means of completing a payment transaction, providing customers with an alternative to traditional credit and debit card payments. APM encompasses digital wallets (OVO, Dana, Google Pay), buy now pay later (BNPL) plans, real-time payments, mobile payments, direct bank payments through open banking, and even cryptocurrencies. In general, their value lies in their speed of processing outbound payments globally and across borders. APMs reduce fraud risk, reduce payment transaction costs, and provide businesses with another avenue to reach the international market with more flexible as well as secure payment options.

Chargeback Prevention Starts with Secure Payment Options

When businesses use more secure payment options like digital wallets with direct user authentication, direct bank transfer with funds availability upfront, and blockchain-based settlements with a level of transparency and irreversibility, this can reduce the amount of chargebacks. Furthermore, with more alternative payment methods, businesses can provide instant confirmations, reducing disputes. For international merchants, the benefits of these inclusive options can be further extended with shorter settlement times, reduced transaction fees, less currency complications, and stronger fraud protection. Multiple payment options can be offered through platforms, such as TransFi, which enhance businesses' ability to incorporate remittance or digital payment options into already established global payment systems to efficiently mitigate chargebacks while seamless cross-border transactions.

How to Avoid Chargebacks in Cross-Border E-commerce

Expanding globally? That’s great. But this also means you’re likely to experience the negatives of chargebacks in e-commerce. The main reason why chargebacks happen when transactions cross borders is because your customers are confused by the currency conversions, you’re too slow at delivering their products or services, or their payment method is unfamiliar or inflexible. So the easiest way to limit chargebacks is to offer local alternative payment methods that your customers have total knowledge of, love, and also trust. Brazilian buyers prefer to use PIX, Indonesians largely love QRIS, and Europeans like to pay using SEPA. If you offer these payments as a part of your checkout with a provider like TransFi, you’re going to have a smoother cross-border payment experience and fewer disputes. As a bonus, digital payment solutions that support APMs will generally have a positive impact on customer satisfaction, which also lowers the chargeback complaints. And customers are 3x less likely to submit chargebacks if they recognize and trust the payment method used.

Best Payment Methods to Prevent Chargebacks and Fraud

In short, the methods that make fraud tough and verification easy are the best ones. Digital wallets like PIX, Dana, OVO, Apple Pay, Google Pay, real-time bank transfers, and country-only APMs all fit the bill. And with alternative payment methods, the customer is less likely to have unauthorized use because they have to approve each stage step by step of the transaction. Credit cards are even easier to steal or misuse, as there are even more chances for payment fraud and chargebacks. Many APMs have terms that make reversals difficult, like credit cards do, and once payment has been successfully confirmed, there is much less chance of a chargeback. Platforms such as TransFi help businesses access alternative payment methods and help them to easily move money globally with less hassle. 

Chargeback Reduction Strategies that Work for Global Businesses

To effectively mitigate chargebacks, you need to implement intelligent chargeback reduction strategies:

• Be transparent about billing and have clear descriptions in each transaction.
• Provide order tracking and delivery updates in real-time.
• Make it easy for the buyer to obtain a refund to avoid attempts at chargebacks.
• And, most importantly, integrate alternative payment methods, which will lessen the potential for disputes. 

The benefits of alternative payment methods are quicker settlement times, fewer middlemen in each transaction, and greater conversion potential in global markets. APMs also have lower transaction fees and reduce chargebacks in all e-commerce experiences because it builds buyer confidence. Using TransFi as a cross-border partner allows you to scale quicker by providing reliable APM integrations. 

Conclusion

E-commerce and cross-border payment development have led to increased incidences of payment fraud and chargebacks. Alternative payment methods enable businesses to reduce chargebacks, build trust with customers, and protect revenue while providing better security and interoperability options. TransFi’s global payment solutions allow businesses to leverage AI-powered technology that simplifies international payments while ensuring merchant compliance, and fraud protection as well as reducing the chance of being charged back. It also allows you and your customers to complete transactions more seamlessly, at a faster speed and with more security. 

FAQs

1. How do alternative payment methods help reduce chargebacks?

Alternative payment methods add security layers to reduce chargebacks such as biometric authentication, customer-initiated transactions, and also real-time confirmations. They lower fraud risk and confusion, which makes dispute chances very less in global and e-commerce transactions. 

2. What are the best secure payment methods to prevent chargebacks?

The overall best secure payment methods to prevent chargebacks include digital wallets, QR code payments and bank transfers, using real-time payment systems like TransFi. These are the methods that offer multi-factor authentication and transparent records, which reduces the chance of unauthorized use and friendly fraud. 

3. How can businesses reduce e-commerce chargebacks with alternative payments?

Businesses can reduce e-commerce chargebacks with alternative payments by using local, trusted systems, like e-wallets or bank links. These kinds of payment methods increase buyer trust, decrease transaction errors, and reduce fraudulent claims, mainly in cross-border e-commerce. 

4. How to minimize chargebacks using non-traditional payments?

To limit chargebacks with non-traditional payments, businesses must make sure that the payment methods they are offering are secure so that users cannot  hack into it. The platform should also have integrated fraud detection and user verification. OVO, PIX and SEPA are some alternative payment methods that avoid unauthorized use of customer accounts and limit reverse transactions associated with credit payments. 

5. What are some secure payment options to reduce chargeback risks?

Secure payments like PIX, DANA, OVO, BNPL, mobile wallets, and direct bank transfers minimise chargeback risk by providing verified, traceable, and confirmed transactions. They eliminate fraud, payment confusion, and any scope for chargebacks.