Burbank Raises $6 Million to Tackle Online Fraud and Chargebacks

Welsh FinTech Burbank has raised $6 million to bring “tap and PIN” payments online.

The company’s funding round, announced Tuesday (March 25) on its LinkedIn page, will help Burbank develop its “Card Present over Internet” (CPoI) tool, which it calls a first-of-its-kind technology aimed at addressing fraud and chargeback issues.

The tool lets users make payments by tapping their cards against their phones and entering their PIN number, similar to the way they’d pay in store.

“The payments experience should be the same for everyone, regardless of channel,” CEO Justin Pike said in the company’s announcement. “In-store we pay by tap and PIN, which is globally trusted and familiar, and now, for the first time ever, we’re enabling the same process in online channels. Simple, secure, and scalable.”

Writing about the issue of chargebacks earlier this month, PYMNTS argued they are a “fact of life” in the commerce world.

“Customers dispute transactions, money is kept back from merchants amid the dispute, and the card issuer determines whether the money should be kept by the merchant or returned to the cardholder,” that report said. “But for merchants, and specifically eCommerce firms, the specter of increased chargebacks hits the top and bottom lines and limits visibility into operational cash flow.”

In addition, there are also the issues of damaged customer relationships and fees incurred in tandem with chargebacks. An overabundance of chargebacks can cause payment processors to levy fines or penalties.

Research by PYMNTS Intelligence focused on Australia said that eCommerce firms in that country want their payment service providers (PSPs) to help mitigate the impact of chargebacks.

For middle-market eCommerce businesses — ones whose revenues are $1 billion or less — widespread improvements are being seen with checkout, as a relatively small number of merchants compared to other countries said they face roadblocks in that area.

“Limiting chargebacks was a key driver for 44% of merchants, which indicated that there is a real and lasting concern that the appeal of card-not-present transactions (that are easier for consumers) and the volume of those transactions must be balanced against the risks of chargebacks and disputes,” PYMNTS wrote. “Focusing on higher conversions addresses one of the most immediate business goals — ensuring more shoppers finalize their purchases — but it can open the door to chargebacks after the purchase is completed.”