International fraud solution provider buys Utah technology company for $3.6M
Global ecommerce fraud protection leader, ClearSale, announced today it has expanded its solution offering and client portfolio by acquiring the enterprise chargeback management service provider ChargebackOps. The organization was originally responsible for Visa’s chargeback management services provided by CyberSource. Dwindling investment in the group led the core team to create their own offering in 2015 that provides a collaborative approach to chargeback management. ChargebackOps serves an impressive roster of enterprise clients, including Columbia Sportswear, Chico’s, and Tractor Supply Company.
“Supply chain issues and friendly fraud are climbing, with 45% of chargebacks now attributed to delivery delays. Retailers need a comprehensive answer to protecting their businesses from unwarranted chargebacks, and with this acquisition, ClearSale will have end-to-end solutions to do that.”
“Chargebacks are an enormous and growing problem for ecommerce merchants,” said Rafael Lourenco, EVP and Partner at ClearSale. “Supply chain issues and friendly fraud are climbing, with 45% of chargebacks now attributed to delivery delays. Retailers need a comprehensive answer to protecting their businesses from unwarranted chargebacks, and with this acquisition, ClearSale will have end-to-end solutions to do that.”
Both chargebacks and fraud are on the rise. According to a recent report from Juniper Research, ecommerce merchants stand to lose roughly $20 billion in 2021 due to criminal activity; an 18% increase over the $17.5 billion lost in 2020. Additionally, recent research shows 94% of merchants identify chargebacks as significantly affecting their business, with 1 in 5 chargeback claims the result of friendly fraud. While these claims are disputable, the process to do so is time and resource-intensive for online retailers, and the fees associated with a chargeback, plus loss of merchandise, can double the cost of the original purchase. The risks are high, and retailers need support to protect themselves.
Read More: SalesTechStar Interview With Matthew Furneaux, Lead Analyst At Loqate
ClearSale’s innovative, AI-driven fraud protection platform helps prevent chargebacks before they happen, and their chargeback protection plans help merchants to recoup losses associated with approved sales that result in a claim. The services of ChargebackOps, which assist merchants with investigation and response to chargebacks, create a full 360-degree circle of protection for merchants looking to mitigate the damage these claims can cause.
The acquisition terms include an initial payment of $3.6M, and two more installments equaling $0.6 million, contingent and variable based on the company’s performance in the following 24 months. ChargebackOps will continue to operate under its own banner and will be led by the same executive team that has driven its success for the last seven years. The 100% ownership purchase follows ClearSale’s IPO and is the second acquisition announced by the company in as many weeks. The transaction follows several similar deals within the fraud protection industry in recent months, signaling a consolidation of services within the space. This sale is notable considering the positive position industry experts place both organizations in within the fraud prevention and protection landscape.