A perpetual bane of payments, chargebacks create issues for merchants and their payment providers. Now, Findustry AI Inc. hopes its new artificial intelligence-enabled Chargeback Agent product will help ease the work of complying with card-brand dispute processes.

Led by Jonathan Razi, who sold CardX, a surcharging-services provider, to Stax in 2021, Findustry AI is pitching Chargeback Agent as intelligent enough to  automatically resolve most chargebacks.

“The pain of chargebacks is going up,” Razi tells Digital Transactions News. “There’s more card-not-present volume than before,” he says in explaining why this is an opportune time to combine artificial intelligence with the dispute-resolution process. Issuing banks also are making it easier for cardholders to initiate a dispute, and the card networks, specifically Mastercard Inc. and Visa Inc., have updated programs for handling disputes, with an emphasis on the acquiring role in monitoring them.

Findustry AI’s services are available via payment facilitators and acquirers, Razi says. Kurv is a client, as is payfac Allpaid.

On the merchant side, large merchants often have teams of employees managing disputes, but smaller ones do not, Razi says. Chargeback Agent is for merchants of all sizes, he says, but may benefit smaller ones the most. “Often they are not even responding to disputes by deadline,” Razi says. Small businesses are drawn in multiple operational directions daily, and payments is just one piece of their oversight duties.

“The benefits are [that Chargeback Agent] has the intelligence to match the evidence to the card-network rules,” he says. Chargeback Agent, the first of other expected AI-enabled services from Findustry AI, is built on so-called foundation models of AI engines and then tweaked for the payments space. “You have to build all the payment workflow and the proprietary data that makes it even more accurate and high performing,” Razi says.

Because AI services are known to have varying capabilities, Findustry AI accesses multiple ones as warranted. “In a workflow we make multiple calls to multiple models,” Razi says. Each model is good at different aspects and Findustry AI has mapped out these differences.

Once a merchant is alerted to a new dispute, staff enter the Findustry AI portal, which can be built into an acquirer’s portal, and view it. Chargeback Agent collects the evidence from the merchant, and, because the AI service has been trained on the card-network dispute rules, it knows the specific evidence to collect for each reason code, eliminating the manual-review step. Findustry AI uses APIs, a programming code to enable disparate platforms to exchange data, to supply transaction data to Chargeback Agent.

From there, the agent drafts a response letter using text that has been proven to produce favorable outcomes. Merchants can review, edit, or approve the response with one click. Submitting the response is the third step. Findustry AI says every human-made edit to all the responses is fed back into the AI engine so it can learn.

Merchants can customize how much autonomy they want to give Chargeback Agent, Razi says. For example, a merchant can designate Chargeback Agent to handle all elements of disputes of less than $300, but require a human review for those of more value.