From Fraud Exposure to Performance Gains

The challenge

This merchant was categorized as medium or high risk by the card networks, where performance expectations are steep and the consequences of falling short are immediate. Authorization and settlement rates were suppressed, largely because of escalating reported fraud (TC40 alerts) and a growing share of declines reported as potential fraud.

The real problem was friendly fraud. Tools like CE3 were of little use given where in the subscription lifecycle the disputes and fraud originated, and the internal team lacked the payments analytics infrastructure to diagnose the problem at scale.

What SLYCE360 uncovered

Many merchants ignore TC40 alerts, assuming they will become disputes and be handled later. Many never do. In a subscription model, a missed TC40 means the subscription is never canceled, and continued authorization attempts on flagged cards can trigger fraud-related declines that drag down authorization rates merchant-wide.

With SLYCE360’s view across CRM, payments and alert data, the merchant analyzed TC40 data alongside campaign and affiliate sources. A small subset of affiliate-driven campaigns was producing a disproportionate share of fraud alerts. Once Ethoca alerts were ingested alongside Verifi, the data also showed that Ethoca-generated refunds correlated with lower TC40 volume at the Visa issuer in question.

The approach

1. Identify the high-fraud traffic sources and address them while keeping the revenue-driving channels.
2. Optimize alert and dispute mitigation services and refund routing to keep TC40s from triggering at all.
3. Cancel affected subscriptions proactively, then give the strategy time to work, with settlement rates improving steadily over 120 days.