Chargebacks & Risk

Fraud Ratio

The percentage of transactions flagged as fraudulent, tracked separately from the chargeback ratio. High fraud ratios trigger their own network programs, so fraud tools that block bad transactions protect both metrics at once.

Because fraud and chargebacks are measured on different clocks, a merchant can be healthy on one and at risk on the other. Monitoring both is part of a mature risk practice.

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Related terms

Chargebacks & Risk

Chargeback Ratio

The percentage of a merchant's transactions that become chargebacks, typically measured monthly. Card networks set thresholds — commonly around 1% — above which a merchant faces monitoring programs, higher costs, or termination.

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Security & Compliance

3-D Secure

An authentication layer that asks the cardholder to verify identity with their bank during checkout, shifting liability for certain fraud away from the merchant. It can reduce fraud and chargebacks when applied where it makes sense.

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