Kstack invests $1.8+ million in the development of a pioneering solution for Chargebacks Management

Brazilian company that was already operating in payment methods launches solution for Acquirers and Payment Facilitators

 Kstack, a consulting firm specializing in offering IT services and digital and technological solutions, presents the first Brazilian chargeback management solution, KSK CHARGEBACK, in the SaaS model. The company has defined, since its foundation, Payments as one of its business verticals, and has developed a business platform called EXCEPTIONS, and after investing $1.8+ million, this year, launches the platform’s first solution to serve Acquirers and Payment Facilitators.

Chargeback is the cancellation of a purchase, with consequent return of the money to the owner of the credit or debit card and happens when the cardholder does not recognize the purchase or when there is an irregularity in the transaction, such as overcharges by the store.

Even though the chargeback is a valid option that meets a consumer’s need, on the other hand, it results in losses for the merchant, because in addition to losing the sale and having to bear the costs of returning the goods and damaged packaging, they also run the risk of suffering from fines and penalties by the brands. Acquirers and payment facilitators are also impacted by losses and costs for chargeback management.

According to the latest update of 2023 made available by the  Central Bank, Kstack estimated 42,2 billion transactions processed and a value of BRL 3,700 billion. “Of this total, we estimate that 210+ million transactions ended up generating some chargeback in relation to the volume corresponding to these transactions, something around R$60+ billion, which is the value of the chargeback that occurred in this period here in Brazil”, comments Sérgio Antonio Coelho, Partner and IT Director at Kstack. “We could expect similar numbers when we have the 2024 numbers. The chargeback number is closer to the MDR amount of the same period” he adds.

The large volume of cancellations has been increasingly costly. It is estimated that, in Brazil, according to a survey by Ebit|Nielsen, about 30% of online transactions are returned or exchanged.

It is also important to remember that accrediting and payment facilitator companies have a series of challenges to increase (or at least maintain) their revenues, competitiveness, new regulations, among others; Loss reduction and greater operational effectiveness can effectively make a difference in this equation.

KSK Exceptions Chargeback

Authorization, Fraud, Cardholder Dispute, and Processing Errors are the four groups into which chargebacks are typically grouped

When there is a disagreement or some type of non-conformity between what was advertised by the store and what was received by the customer; or the customer may not have received the goods or received them defectively. “The same happens if there is bad faith on the part of the shopkeeper when advertising a specific amount on the sponsored and virtual page and charging another amount at checkout; Common processing errors can also cause chargeback, when the store decides to charge an amount even after announcing another.”, explains Sergio.

“Considering that, today, treatments are performed manually, it becomes unfeasible to analyze them, talk to the store about them, receive the answer of what they are going to do or return this answer, especially if the company has a high volume of daily sales”, considers Sergio.

The solution’s architecture was based on a framework in which the processing and handling of chargebacks is as automatic as possible, parameter-oriented, prioritizing friendly interaction with the responsible analysts, always seeking the best performance. “The faster he treats a process, the less money he will lose”, ponders Sérgio, while ensuring the efficiency of the system for cost reduction.

The performance rates that Kstack expects to achieve are in the order of 70 to 75% in the automation of treatment and 90 to 105 cases per day to be treated by analysts.

“Given my experience in the chargeback treatment development network, I understood that today the Brazilian market is already prepared to receive a robust system that was worked on and designed by user personnel and experts on the subject. He will have greater control of this treatment, with the best use of his knowledge and skills, resulting in better numbers for the company, for example”, adds Sérgio.

“There was no company in Brazil that sold a solution and could make it so that the accrediting and payment facilitator companies did not need to develop professional systems responsible for taking care of it until this year. Now they will”, concludes the executive.

The solution will be sold as a license in the SaaS model, along with a monthly subscription, which can also include managed services. Kstack also offers all the support for training and strategic and operational consulting.

About Kstack

Consulting specialized in Hunting services and professional services for the tech market. Provider of digital solutions for the business, means of payment, agribusiness and health fronts. For six years in the national and international market, the company has already allocated more than 300 professionals in more than 50 companies such as: VELOE, ACI, MOBLY, ZURICH, UHG, Magalu Lab, Dock.

Kstack connects opportunities to drive digital transformation.