In the current shift towards a digital-first economy, payment methods are evolving. The Q4 2025 Digital Trust Index by Sift suggests a significant surge in global chargeback volumes. The report anticipates a 24% increase by 2028, driven by the rising trend of card-not-present transactions.
Card-not-present payments, which occur when the cardholder doesn’t physically show the card at the transaction time, account for 63% of all transactions. Online shopping and digital services contribute to this large share of payments. With technology’s steady advancement, this percentage will likely rise.
However, the increase in card-not-present transactions also escalates financial risk. Chargebacks come into play here. A chargeback happens when a cardholder disputes a transaction, reversing the transaction and refunding the customer. This process can cause substantial losses for businesses, particularly if the disputed transaction is fraudulent.
Anticipated Losses from Chargeback Growth
According to the Sift report, the surge in chargeback volumes will likely result in significant losses. Given the upward trend of card-not-present transactions, businesses should be aware of this potential financial risk. Regrettably, the report doesn’t specify these anticipated losses. However, the financial impact could be substantial.
An increase in chargebacks can greatly affect a company’s profitability. Therefore, businesses should proactively manage this risk. This might involve investing in fraud detection and prevention technologies or enforcing stricter verification processes for card-not-present transactions.
In conclusion, as the digital economy evolves, businesses must adjust and prepare for potential risks. The forecasted surge in chargeback volumes illustrates the importance of effective risk management in the digital era.
