Reducing chargebacks: 3 features cardholders want from their digital banking apps
Consumers are gravitating to digital banking for various reasons—from sheer convenience to having access to the latest tools and features that give them more insight into their transactions. However, not all digital banking features are valued by consumers as much as the next. Research suggests that banks offering the latest features consumers want most will help them keep customers and win new ones. On the other hand, banks that don’t offer these features risk losing their competitive edge.
The new 2023 Digital Field Guide from Ethoca, based on a recent survey report from Aite-Novarica, takes a deep-dive look at the features consumers say they want most from their digital banking channels. Issuers and merchants should pay attention, because not only can offering these features greatly enhance their digital customer experience, they can also help significantly reduce disputes and prevent chargebacks. That’s because these features give consumers more control and visibility over their finances that can also minimize purchase confusion—so they’re less likely to dispute charges they don’t recognize.
Here are three key features consumers want in their digital banking apps that can also help prevent disputes, chargebacks and false claims:
Feature #1: Digital receipts
Digital receipts are electronic versions of receipts that can include far more detail about the transaction, such as a description of the item purchased and a breakdown of the total price including taxes and any discounts. When available in customers’ banking apps—where they most often review their purchases—a digital receipt can remind and assure them that they actually made the purchase, so they’re less likely to dispute it. It can also help clarify any questions they have about the total purchase amount.
The Aite-Novarica survey found that 88% of consumers surveyed would prefer getting a digital receipt—or a digital receipt along with a paper receipt—over just getting a paper one. And the majority would like to get it delivered to them through their digital banking apps instead of by text of email.
Takeaway: Both merchants and issuers benefit by working together to provide digital receipts through banking channels. By giving customers more visibility and detail about their transactions, they can reduce the confusion and prevent costly chargebacks.
Feature #2: Subscription management
From online streaming services to home-delivered meal kits, the e-commerce boom has fueled a huge uptick in subscription-based purchases. According to a Forbes article, the global subscription e-commerce market size is expected to grow from $72.91 billion in 2021, to $904.2 billion by 2026.
A subscription management feature can let consumers easily see when their various subscriptions are up for renewal and allow them to make changes to them—right through the digital banking app they use regularly. For example, they can cancel or even potentially change their subscription level.
Eighty-five percent of consumers surveyed said they are interested in digital banking features to help them better manage subscription services.
Takeaway: Due to the big rise in subscription-based purchases, subscriptions have been a growing cause of disputes and chargebacks. Merchants that offer subscription management through digital banking channels could see a significant reduction of chargebacks by giving their customers more insight and control over those payments.
Feature #3: Clear merchant name and logo
Banking transaction statements (online and offline) often include unrecognizable merchant descriptions that can cause confusion, meaning the cardholder might not recall making and authorizing legitimate purchases. By providing customers with clear merchant names and logos right next to the relevant purchases in their digital banking app, merchants and issuers can greatly reduce the purchase confusion that often leads to disputes and chargebacks.
This is especially important for situations where the business name and the digital bank statement might not match. For example, think about a marketplace with multiple sellers or a global brand that has many subsidiaries.
Ethoca gives merchants an easy way to add their name and logo to digital banking apps, so that their customers are far more likely to recognize their purchases, and far less likely to dispute them. In fact, merchants can upload their logo directly through Ethoca’s website.
Takeaway: With consumers making purchases from so many different merchants these days—both online and offline—it only makes sense to give them clarity around their purchases so they are less likely to initiate a chargeback. And providing a merchant name and logo is an easy and highly cost-effective way to do that.
Staying ahead of what consumers want
Paying attention to what consumers want from their digital banking experience—and providing them with the innovative, new features they care about most—will help merchants and issuers not only retain customers but win new ones.
Download the 2023 Digital Field Guide to find out what consumers today say they want most from their digital banking apps.