Top Merchants Maintain 95%+ Approval AND Low Fraud. Here's Their Playbook

Payment fraud costs global merchants hundreds of billions annually, yet the merchants with the lowest fraud rates rarely have the lowest approval rates. They maintain both. The question for any head of payments is not whether to prioritize fraud prevention or conversion. It is how to find the platform and the approach that does not force that choice.

This post compares the strategies and tools top merchants use to hold approval rates above 95% while keeping fraud and chargeback rates under control. If you are evaluating the best platform to reduce fraud and chargebacks without sacrificing revenue, this is the playbook.

Why Most Merchants Cannot Have Both High Approval Rates and Low Fraud

The conventional approach to fraud prevention is blunt. Apply 3DS to everything. Block any transaction that looks unusual. Expand the deny list. The result is predictable: fraud rates fall, but so do approval rates, and with them, revenue.

The core problem is that most fraud tools operate in isolation. A 3DS provider does not know what your PSP's risk engine just flagged. Your chargeback management workflow does not feed back into your fraud rules. Each tool makes decisions with partial information, and the cumulative effect is friction that hits legitimate customers as often as bad actors.

Merchants using a single-PSP setup face a compounding problem. When that PSP's fraud logic is too aggressive, there is no routing alternative. Transactions decline, customers abandon, and the only lever available is loosening fraud rules across the board. That is not risk management. That is guesswork.

How Top Merchants Approach Fraud Without Killing Conversion

High-performing merchants think about fraud prevention in layers. Each layer handles a specific type of risk, and together they create a system where good transactions flow through cleanly while bad ones are stopped early.

Layer One: Rule-Based Pre-Filtering

The first layer catches known bad actors before they reach any payment processor. Custom allow and deny lists, velocity checks, and behavioral rules handle the majority of clear-cut cases without adding friction to the checkout flow.

This does not require an enterprise fraud platform. Merchants with well-defined customer profiles often find that a lightweight rule engine covers most of their exposure. The key is configurability: rules need to reflect the specific business model, not generic industry patterns. A subscription platform faces different fraud vectors than a travel booking site or an online marketplace.

Pre-filtering also protects conversion directly. When known-good customers are on an allowlist, they skip downstream checks entirely. That means faster checkouts, fewer false declines, and higher approval rates for the customers who matter most.

Layer Two: Conditional 3DS Logic

3DS applied universally is a conversion problem disguised as a security feature. It adds steps to the checkout flow for every customer, including the vast majority who pose no risk. Top merchants apply 3DS conditionally, based on real signals.

Effective conditional logic considers transaction size, geography, user history, and the output of pre-filtering rules. A returning customer with a clean transaction history buys in one step. A first-time high-value transaction from an unfamiliar location triggers additional verification. The friction is proportional to the actual risk.

This approach also supports PSD2 and SCA compliance in European markets without applying SCA logic globally. Merchants operating across regions can apply the right authentication standard in each market, without forcing the most restrictive ruleset onto customers where it is not required.

Layer Three: Multi-PSP Routing With Fraud Awareness

Routing decisions and fraud decisions should not be made independently. When a transaction carries elevated risk signals, routing it to the PSP with the strongest fraud controls in that market is a better outcome than routing purely on cost or approval rate history.

This is where merchants on single-PSP setups face a structural disadvantage. With one provider, routing is not a variable. With multiple providers connected through a unified layer, the payment infrastructure can factor in both performance data and risk signals to make smarter decisions on every transaction.

Merchants using smart routing with fraud awareness through Yuno's infrastructure see an average 8% authorization rate uplift. That is not achieved by loosening fraud controls. It is achieved by making more precise decisions about which transactions need intervention and which should move directly to approval.

Layer Four: Automated Chargeback Management

The fourth layer addresses what happens after a dispute is filed. This is where many merchants lose recoverable revenue. Manual dispute workflows are slow, evidence is often poorly structured, and response windows close before teams can act.

Automated chargeback management changes this by ingesting dispute notifications directly from providers, guiding merchants through evidence collection, and submitting structured documentation within required timeframes. Win rates improve not because the underlying cases change but because the response quality and speed improve.

For merchants with high transaction volumes, the compounding effect is significant. Each percentage point improvement in dispute win rate translates directly to recovered revenue that would otherwise be written off.

Comparing Approaches: What the Best Platform to Reduce Fraud and Chargebacks Actually Looks Like

When evaluating platforms, heads of payments typically encounter three types of setups. Each has a distinct tradeoff profile.

Single-PSP With Native Fraud Tools

Most PSPs offer some form of native fraud detection. For merchants early in their payment journey, this is often sufficient. The limitations appear at scale.

Native fraud tools are calibrated to that PSP's transaction network. They cannot incorporate signals from other providers. They apply the same logic to all merchants on the platform, which means the rules reflect aggregate risk patterns rather than the specific merchant's customer base. And when the PSP's fraud logic produces false positives, there is no fallback route for the declined transaction.

The deeper problem is conflict of interest. A PSP optimizing its own fraud metrics may make decisions that protect its network at the cost of your approval rate. Routing advice from a provider with its own acquiring business is never fully neutral.

Point Solutions Stitched Together

The alternative many merchants try is assembling best-of-breed tools: a dedicated fraud platform, a separate 3DS provider, a chargeback management service, and one or more PSPs. Each tool is strong in its category. The integration challenge is the problem.

When fraud signals do not flow into routing decisions, and chargeback outcomes do not feed back into fraud rules, the system is less than the sum of its parts. Every tool operates with an incomplete picture. Operational overhead rises as teams manage multiple dashboards, multiple vendor relationships, and manual handoffs between systems.

This is the setup that produces the scenario most payment leaders recognize: fraud rates are acceptable, approval rates are acceptable, but neither is optimized, and the engineering effort to improve either is significant.

Unified Financial Infrastructure With Layered Controls

The third approach integrates fraud prevention, authentication logic, routing, and dispute management into a single stack. Rules configured in one place apply consistently across all providers. Fraud signals inform routing decisions in real time. Chargeback data feeds back into fraud rules without manual intervention.

This is the architecture that enables merchants to hold high approval rates and low fraud simultaneously. The best platform to reduce fraud and chargebacks is not the one with the most sophisticated fraud AI in isolation. It is the one where every control layer shares data and acts on it consistently.

Yuno's financial infrastructure connects these layers through a single API. Risk Conditions, 3DS logic, smart routing, and Chargeback Manager operate from shared transaction data, without requiring custom integrations between them. Merchants configure rules through a UI without engineering involvement, and performance metrics track approval rates and fraud rates together so tradeoffs are visible.

What Real Merchants Achieve With This Approach

Reserva, a Brazilian fashion and e-commerce merchant, implemented smart routing alongside fraud orchestration through Yuno. Within three months, approval rates increased by four percentage points. As Reserva's product manager Clara Farias noted, "In an operation of our size, even one percentage point would be a huge win for the bottom line. Four points are a remarkable boost. I think Yuno provides the perfect balance between security and approval rates."

The result illustrates the core principle: better fraud control and higher approval rates move together when the underlying infrastructure is designed for both.

Livelo, a Brazilian loyalty rewards platform with over 400 partner companies, achieved a five-percentage-point improvement in approval rates alongside 50% recovery of previously failed transactions. The improvement came from unified routing and fraud controls working from the same transaction data, not from relaxing fraud standards.

Rappi, operating across nine countries and 35 million users, reduced the time analysts spent resolving payment disruptions by 80%. The previous setup required five to ten minutes of manual intervention when a provider issue emerged. With real-time anomaly detection integrated into the payment infrastructure, the response dropped to milliseconds. Fewer disruptions reached customers, and fewer disruptions became chargeback exposure.

How Yuno's Fraud Tools Work Together

Risk Conditions

Risk Conditions is a lightweight rule engine that lets merchants configure allow and deny lists, velocity checks, and custom fraud rules directly through a UI. No code is required. Rules apply across all connected PSPs, so a blocked card is blocked everywhere, not just on one provider.

The tool is designed for merchants who understand their customer base and want control without the overhead of an enterprise fraud platform. It filters traffic before external checks run, which reduces costs on third-party fraud tools and 3DS challenges by removing clear-cut cases before they reach those systems. Merchants using Risk Conditions see up to 29% fraud reduction.

3DS Authentications

Yuno's 3DS product applies authentication conditionally, based on configurable logic. Merchants define the conditions: transaction size, geography, user classification, or the output of Risk Conditions rules. Trusted users bypass 3DS. Suspicious transactions trigger it. The logic is consistent across all markets and all connected providers.

For merchants operating in Europe, the product supports full PSD2 and SCA compliance without forcing European authentication standards onto non-European traffic. Performance is tracked by segment so merchants can see exactly where 3DS is helping, where it is adding unnecessary friction, and how to adjust.

Chargeback Manager

Chargeback Manager centralizes dispute workflows behind a single dashboard and API. Notifications arrive automatically from providers. Guided workflows structure evidence collection and submission. Real-time status updates arrive via webhooks, so payment teams track outcomes without logging into multiple provider portals.

The product is built for merchants with recurring dispute volume, where the cumulative time cost of manual workflows is significant and where response speed directly affects win rates. Faster responses with better-structured evidence improve win rates without changing the underlying merits of the dispute.

The Practical Checklist for Evaluating Your Current Setup

Before selecting a platform, heads of payments should audit their current fraud and chargeback infrastructure against these questions.

• Do your fraud rules apply consistently across all PSPs, or does a blocked card on one provider still process on another?
• Does your 3DS logic apply selectively, or does it run on every transaction regardless of risk profile?
• How long does it take your team to respond to a chargeback notification, and what percentage of disputes receive fully structured evidence submissions?
• Can you see approval rates and fraud rates together in a single view, or do you reconcile those metrics across separate dashboards?
• When a routing decision is made, does it incorporate fraud signals, or does the fraud layer and the routing layer operate independently?

If the answer to most of these is no, or if answering them requires logging into four different systems, that is the gap the right platform closes.

The Takeaway for Payment Leaders

The merchants holding approval rates above 95% while keeping fraud rates low are not using more aggressive fraud tools. They are using smarter ones, connected to each other, and applied with precision rather than uniformly.

The best platform to reduce fraud and chargebacks is the one where pre-filtering, authentication, routing, and dispute management share transaction data and act on it consistently. Point solutions running independently cannot replicate that. Single-PSP setups with native fraud tools cannot route around the gaps.

Start by auditing your top three markets. Map where fraud rules apply inconsistently across providers, where 3DS runs without conditions, and where dispute response times exceed 48 hours. Those are the three highest-leverage areas where a unified infrastructure approach recovers both revenue and fraud performance simultaneously.

Yuno connects all four control layers through a single API across 200+ countries and 1,000+ payment methods, with no conflict of interest in how transactions are routed. If that audit surfaces gaps, it is worth seeing what the infrastructure looks like when the layers are working together.