PayU on Friday launched an AI-powered fraud protection solution for Indian merchants accepting international card payments, as the fintech company looks to shield businesses from rising AI-enabled scams, including fraudulent chargebacks.
Unveiled at the Global Fintech Fest, PayU’s Fraud Liability Protect (FLP) uses AI and risk-based profiling to assess cross-border card payments, identify suspicious international transactions and protect Indian merchants against international card fraud.
According to PayU, Indian merchants are currently in a predicament: tighter fraud controls can add friction at the authentication level, while lighter controls can leave them exposed to fraud and revenue losses.
How PayU’s fraud protection solution works
PayU’s Fraud Liability Protect combines three core capabilities:
- AI/ML-powered risk assessment evaluates every international card payment against multiple transaction and behavioural signals.
- Dynamic risk-based authentication determines the appropriate level of authentication needed. Low-risk transactions are generally processed without friction, while higher-risk transactions are routed through stricter authentication.
- Fraud liability protection covers merchants against unwarranted fraud chargebacks, protecting their revenues from international card fraud.
What they’re saying
“Fraud protection should not come at the cost of payment acceptance, especially as Indian merchants scale across geographies,” said Manas Mishra, chief product officer at PayU and Wibmo.
Mishra said the solution is designed to protect Indian merchants against both human-initiated and AI-enabled scams while improving the success rate of genuine international transactions.
PayU said its merchants are already seeing a 4-5% improvement in international card payment success rates, alongside a reduction in fraud exposure.
How are online travel and food delivery platforms benefiting?
The fintech company said its fraud protection solution is targeted at Indian small and medium businesses in sectors such as travel, online travel agencies, airlines, e-commerce, quick commerce and foodtech, where failed cross-border payments can directly affect revenue and erode customer trust.
In one case, an online travel merchant that adopted FLP saw a 14% improvement in payment success rates, alongside an 83% reduction in its fraud-to-sales ratio, PayU said.
PayU said FLP integrates with its Checkout platform. Foodtech company Zomato is among the merchants using the solution to offer customers a more reliable payment experience while maintaining appropriate controls for higher-risk international transactions.
The launch comes as a number of homegrown fintech companies have received cross-border payment aggregator licences from the Reserve Bank of India. The list includes PayU, Paytm, Razorpay, Juspay and Skydo, among others.
On the one hand, the licences are enabling Indian merchants to accept payments from customers overseas. On the other, criminals are increasingly using AI to create believable IDs, clone faces and voices, and target businesses, further expanding fraud risks.
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