Pegasystems Unveils AI-Infused Solution to Expedite Retail Bank Chargebacks

Low-code platform provider Pegasystems has integrated its Pega Process AI technology into Pega Smart Dispute, a move set to aid retail banks in optimizing their chargeback processes.

Chargebacks, which occur when consumers dispute card transactions, have been on the rise worldwide, often due to increasing instances of fraud. These disputes necessitate thorough investigations by card-issuing banks to determine refund validity, navigate complex payment network regulations, and process transactions.

Steve Morgan, industry market leader at Pega, noted, “The increase in chargebacks is causing more strain to bank staff who are already overwhelmed with increasing amounts of regulation and fraud in the post-pandemic world.”

With the incorporation of Pega Process AI, Pega Smart Dispute can now predict the likelihood of a transaction dispute’s approval through network validation rules such as Visa’s. This prediction helps banks efficiently resolve disputes by automating high-probability cases and assigning more resources to low-probability ones, thereby reducing labor costs and expediting resolutions.

Pega Process AI, combining workflow automation with real-time AI-powered decision-making, NLP, and complex event processing, simplifies complex, real-time decision-making with data-driven AI-enhanced arbitration. It continuously learns from previous predictions and decisions to enhance accuracy and effectiveness over time.

In addition to Pega Process AI, the updated Pega Smart Dispute includes several other enhancements:

• Expanded Payment Type Support: The solution now provides improved workflow templates for managing new payment types, building on its existing support for Visa, Mastercard, and American Express.
• Regulation II Support: It is compliant with new Regulation II rules from the US Federal Reserve System regarding card-not-present transactions.
• Updated Compliance Rules: The software receives updates in chargeback rules from Visa and Mastercard twice annually, aligning with their April and October releases.

Pega Smart Dispute unifies dispute and fraud claim operations across all channels, streamlining the payment dispute process and boosting efficiency, customer satisfaction, and compliance for issuers. It is built on Pega’s low-code platform, enabling rapid adaptation to changing conditions and new payment types.

By integrating Pega Process AI, Pega aims to help banks navigate the complexities of chargeback resolution in an increasingly digital and challenging financial landscape.