Sift Science Inc. has agreed to acquire Chargeback Inc., a specialist in applying dispute-resolution technology to help merchants resolve chargebacks. Terms were not announced. The deal comes as card-not-present fraud in particular is soaring as consumers over the past year have adopted online shopping, many for the first time. U.S. fraud losses in this channel totaled $7.2 billion in 2020, up 29% from 2019, and are expected to reach nearly $8 billion this year, according to estimates from Aite Group, a Boston-based consultancy.
Ten-year-old Chargeback, based in Salt Lake City, Utah, applies a software-as-a-service model to allow merchants in real time to untangle cases in which buyers apply for chargebacks on claims they never ordered the goods or the goods came damaged or otherwise not as presented. For its services, the company charges a minimum annual fee of $8,000 to small merchants, and $30,000 to mid-size sellers, according to information on its Web site.
“Sift will continue to be the first line of defense against fraudulent activity with the added benefit of Chargeback’s experience in the downstream effects of fraud, like disputes,” said Marc Olesen, San Francisco-based Sift’s chief executive, in a blog post Tuesday announcing the deal.
Chargeback and Sift have been working together for some time, with Chargeback having already established a so-called pre-built connector within Sift’s integration hub. “As a longtime Sift partner, we’ve seen how effective full fraud coverage has been for joint customers using Chargeback’s integration with Sift,” said Chargeback’s chief executive, John Munro, in a statement.
In another deal announced Tuesday, GreenBox POS said it has acquired Northeast Merchant Services, an independent sales organization processing card transactions for more than 700 merchants, mostly in New England and upstate New York. Terms include a payment to Northeast of $2.5 million in cash, with a $500,000 earnout over one year if specified revenue targets are achieved.
The announcement comes one day after GreenBox said it has established a BIN (bank identification number) sponsorship with South Jordan, Utah-based Merrick Bank, smoothing the way for San Diego-based GreenBox to recruit merchants for its blockchain-based transaction platform. A bank sponsorship enables nonbank processors to handle payments that rely on bank networks like Visa and Mastercard.