Is Ethoca Pricing Worth It?

Is Ethoca Pricing Worth It?

Ethoca pricing starts with a low monthly fee and also has a low alert fee for successfully preventing a chargeback. There is no contract for the month to month plan so you can discontinue at any time. Before we get into the details of Ethoca pricing, let’s talk about what Ethoca is.

Ethoca is a communication platform enabling merchants to access confirmed fraud and transaction dispute data from card issuers through a real-time secure portal or API. In more simple terms, Ethoca is a company that reduces chargebacks by intercepting disputes at the time it happens with the issuing bank. Then they send an alert to you which gives you a chance to resolve the issue before it gets recorded as a chargeback.

Chargeback Mitigation

No merchant wants chargebacks. Chargebacks are not only costly to your business in terms of fees involved, but chargeback rates over 1% can lead to your merchant account fee increasing, reserve increasing or even getting your merchant account cut off.  If you’re an online business then you simply cannot afford to be without merchant services. What can be done to reduce the chargeback ratio and is there a chargeback mitigation tool?

Credit card fraud and/or friendly fraud is the most common reason for chargebacks, but it is not the only reason. At the current rate, friendly fraud will cost merchants upwards of $25 billion a year by 2020. Customer dissatisfaction with a product or service is another reason. As well as buyer’s remorse can result in cardholders contacting the issuing bank to dispute the charge (chargeback).

Ethoca is a service that will alert your business when a chargeback has been made. Now that you are aware of this chargeback, you are able to take the necessary steps to resolve this issue. Weather that be issuing a refund or resolving the issue all around. They help you fix the problem instead of having the dreaded chargeback being implemented. Ethoca pricing is worth the number of reduced chargebacks. Ethoca reduced 40% of chargebacks in the USA when it was put into practice.

What Are The Effects Of Chargebacks?

The three major credit card networks (Visa, MasterCard, and American Express) track the ratio of chargebacks to transactions incurred by the merchants they work with. If the ratio crosses a certain threshold, your considered “high-risk”.

The acquiring bank may take various actions including; closing your merchant account, restricting the monthly processing volume, holding funds in reserve, and even listing you in a Terminated Merchant File (TMF). If you find yourself in a Terminated Merchant File or on the MATCH list, then it’s going to be extremely difficult to obtain a new merchant account by any bank.

Let’s say you haven’t gone as far as being in a TMF or on the MATCH list, but you have been hit with a couple chargebacks. During a chargeback the consumer is asking the bank to forcibly take the money from the business they want a refund from. Once the cardholder asks the bank to do this, an investigation is done by the bank and the money is removed from your merchant account (if the request is valid). Most of the time, you as the merchant won’t even know a chargeback happened until after the fact.

By the time you find out you’ve been hit with the chargeback, not only is it too late to try and fix the issue but the bank has probably slapped you with a pretty hefty fine. If you go over your monthly chargeback rate, excessive fines (in the ballpark of $10,000) can be levied against you (the business). This is where Ethoca comes in.

How Does Ethoca Eliminate Chargebacks?

Ethoca has built a set of rails for rich data exchange between merchants and card issuers. They have an Eliminator product where extensive merchant data is put into the hands of card issues. This deflects the chargeback before a claim is ever created. If needed, Ethoca then layers in their Alerts Product. The Ethoca Alerts Product relies on confirmed fraud and customer dispute intelligence from our extensive network of card issuers. The alerts are sent to you (the merchant) right away so an immediate refund can be sent to the customer. This process avoids the need for your card issuer to ever raise a chargeback (as seen below).

The Ethoca Alerts Product catches up to 73% of fraudulent credit card transactions leading to 9 of the top 10 online retailers to avail of their fraud prevention services.

How Does Ethoca Eliminate Chargebacks?

Ethoca Pricing

Depending on your individual account, Ethoca pricing will vary. The costs for Ethoca include:

  • Low monthly fee
  • Low alert fee for successfully prevented a chargeback ($25-$40)
  • No contract
  • Discontinue at any time

How much money are you losing from chargebacks and fees? Ethoca pricing is not expensive compared to all the money your losing from chargebacks.

Is your business experiencing chargebacks? Whether you’re a low, medium or high-risk for chargebacks, you must understand where they are coming from, what they’re really costing you, and what you can do to stop them. For more information about getting the right merchant account for your business, schedule a free consultation with our team of experts today!

Ethoca Pricing

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