Chargebacks, Chaos & Customer Trust: A Founder's Guide To Ecommerce Resilience — Conor Lyden | How To Stops Chargebacks, Why Chargebacks Cost More Than Money, What Brands Miss In Calculating Transaction Costs, How Trustap Protects From Chargebacks (#418)

In this episode, we explore how chargebacks hurt online businesses and what smart store owners are doing to fix this problem. Chargebacks mean lost money, wasted time, and damage to your reputation with payment companies. 

Our guest Conor Lyden, founder and CEO of Trustap, shares how his company helps online stores fight fraud and secure payments.  

He explains how one simple solution can replace multiple expensive tools while saving businesses thousands of dollars every month. 

Topics discussed in this episode:  

• Why a ticket scam led to building a global fintech solution. 
• How Trustap protects e-commerce brands from chargebacks. 
• Why chargebacks hurt more than just your wallet. 
• How becoming merchant of record removes liability and tax stress. 
• What makes Trustap a one-stop checkout plugin. 
• Why some brands see up to 18% more profit with Trustap. 
• How Trustap helps brands expand globally without local setup. 
• What merchants miss when calculating real transaction costs. 
• Why high-volume vs. high-ticket stores benefit differently. 
• How onboarding takes just hours, not days. 

Links & Resources 

Website: https://www.trustap.com/
Shopify App Store: https://apps.shopify.com/trustap
LinkedIn: https://www.linkedin.com/in/conor-lyden-442621b1/
X/Twitter: https://x.com/trustappayments

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Transcript

Speaker 1 (00:00)
Most people in any combo know what a chargeback is, even if it is a bad actor on the buyer's side. It's not even worth gathering the evidence and disputing it. The burden of fruit is on you as the brand proved that you actually did deliver the service.

Speaker 2 (00:13)
Another one scammed by buying football tickets. How did that lead into launching a fintech company?

Hello and to another episode of the e-commerce coffee break podcast. If you sell online, you know the pain of chargebacks. It's not just lost money, it's back and forth distress and the risk of your reputation. In today's episode, we're diving into how smart founders are solving these problems at the root by building real trust into every transaction and turning post checkout chaos into an advantage.

For this, joining me today is Conor Lyden. He's the founder and CEO of TrustAp, a fintech platform helping marketplaces and e-commerce stores fight fraud, secure payments. What started out from a personal scam experience has grown into a global solution used by more than 250 platforms and going into e-commerce now. So we have a lot to cover. Let's dive in and welcome Conor. Hi, Conor, how are you today?

Speaker 1 (01:08)
Drago tanks.

Speaker 2 (01:10)
Conor, you were once scammed by buying football tickets. How did that lead into launching a fintech?

Speaker 1 (01:17)
Yeah, it was a couple of years ago now, but my original experience was, yeah, I was traveling over and back to Liverpool to watch football matches from Ireland where I'm here. you know, back then all the tickets were physical tickets. So it was a case of finding somebody on the internet, usually on a marketplace or on social media, sending them money and then hoping that they were legitimate and they would send the ticket afterwards.

Obviously there was issues with that system. So I thought there must be a better way of doing that. And that was the first version of Trustap was a direct to consumer product. that was an app that people could use for all sorts of different types of transactions. And then we realized that, where I did at that point, when people were using it for different things, that there was maybe an opportunity to

used that in other areas as well. And even though it was quite difficult to market it as a standalone product, because people didn't do those kinds of transactions every day. were kind of, you it'd be once a year, twice a year, you might buy something from a complete stranger on the internet. So it made more sense to partner with the marketplaces where those people were finding each other or where those transactions are coming from. Just so happened around that time, especially around COVID, lots of those marketplaces were trying to

They would say, go transactional. So let people buy and sell with each other online instead of having to meet up in person and hand over cash. And we had a way to help them do that out of the box. then, know, fast forward another couple of years, we started getting more inbound from Ecom businesses and VTC brands. And so we started building and extra features and tailoring the product for them as well. when we, you as I sit here today,

customers are made up of lots of marketplaces and lots of e-com stores as well.

Speaker 2 (03:17)
think that's one of the pain points for every DTC business, every e-commerce store out there is chargebacks. It's having not enough trust built up with their customers or they can't recognize the payment and then a chargeback game comes in. Tell me why are chargebacks such a big headache?

Speaker 1 (03:35)
Yeah, I think it's, you know, first of all, there's a couple of elements to it. there's a financial impact, there's a reputational impact, and there's just the overhead or the hassle of dealing with it all. So, you know, most people in any common know what a chargeback is, but it's when, and there are different types of them, but it would be when, you know, buyer pays for something from your store. And then, you know, maybe

goes directly to their bank or to Amex or whoever it might be and say, you know, I never got it or like, you know, doesn't go through a normal resolution process for you, but just goes directly to their ⁓ bank or payment processor and dispute the charge and they'll notify you then the chargeback has been filed. And so it's more common or it's more of an issue in the US than it would be in Europe. And our

mechanism for dealing with that is by what we call becoming the merchant of records. So we insert ourselves in these transactions, almost like an installation layer for brands. So we then take on the responsibility and the liability of dealing with chargebacks, disputes, but also other things around the transaction, like tax reporting, and all things that the brand would normally have to do themselves, but don't have to do if we're helping them process those transactions.

Speaker 2 (04:57)
I can relate to that. was running an online store for eight years and whenever a chargeback came in as a merchant, you feel bit of ⁓ treated very unfair because you did not have really a chance to reply to the customer because it's already, as you said, with the bank, with the credit card and then you have to deal with this. Talk me to what you have or what you are providing a different solution to that. Talk me through it. How does it work?

Speaker 1 (05:23)
Yeah. So there's a couple of elements to it. think like, you know, the status quo, as you said, as a brand gets a chargeback and a loss of time, it's not even worth gathering the evidence and disputing it because it takes a long time. The burden of proof is on you as the brand proved that you actually did deliver the service, even if, know, it is a bad actor on the buyer's side that has put the charge back in. It takes a lot of time. And if the average order value isn't that high, often it's actually just more efficient to just accept.

the stage and reform the money and move on, you know, and we didn't think that that's fair or good, I suppose. And so how we manage our transactions is a slightly different other solutions out there, but we have what we would call like an end to end transaction app, really. So, you know, we have plugins built for Shopify and commerce or, know, any custom store can integrate directly as well. But the way that it works is that we run the payments through our system.

And in that process, as I mentioned, we become the merchant record. So we provide this like installation layer so that the brands themselves, first of don't have to deal with the chargebacks. Don't suffer the financial losses of receiving them, but also don't suffer the reputational issues that getting lots of chargebacks can give you as well on the card networks and things like that, you know, oftentimes you might, it might, it might affect you long-term if you start getting a lot of chargebacks. So we.

We run all of that through our system. We manage and dispute those chargebacks on your behalf. We gather the evidence, the submitters, a lot of what we've built is an efficient way of doing that. And we, first of all, get less than the industry average and we win way more than the industry average. So ultimately to the bottom line of every brand we work with, there's a large saving there. And as I mentioned, the chargebacks is only a part of that. also

I suppose, provide uplifts in different stages along the transaction too.

Speaker 2 (07:25)
Talk me through this. reputation, you mentioned that, is a problem. If you have too many chargebacks, you might be in trouble with your payment processor. might be Stripe or whatever. They will just either kick you out or increase the transaction fees. So it's very bad for your business overall. if you have bad actors, so means customers who trying to take advantage of having a chargeback and trying to get a product for free. So lots of reasons to find a better solution like yours.

Talk me through the step-to-step process of the implementation and how it looks for the customer.

Speaker 1 (07:59)
Yeah. So like our slogan is very similar to any other payment plugin that a brand might use. So if you're on Shopify or you're on Google commerce, if you're able to install it directly from the app store, if you have a custom site or you're built on some other type of framework, you could just integrate use of the API. But the way it looks from a user's perspective is the exact same as any other payment method would look like. So we also built into our process is the option for

shipping protection or buyer protection. So when people are purchasing, can increase conversion by offering that as part of what we offer. Because the reality is the status quo on lots of high performing brands is they have lots of plugins along the transaction that they use to make a transaction finish successfully. So they'll have, you know, maybe shipping protection tools, fraud prevention tools, they'll have their payment methods.

They might have chargeback management tools, they'll have tax reporting tools, and they have to manage all of these, to pay for all of these. Whereas what we do is just one simple plugin, we do all of that. as I said, key to it is being the merchant of records, so we're able to provide that installation so that the brand is no longer responsible or liable for dealing with chargebacks and disputes and tax reporting. They're the two main areas of liability. And the benefits to the brand are...

increasing conversion or just the uplift by us doing all of those separate steps in the best possible way. And then the savings, I suppose, on the other side of not getting as many disputes and chargebacks as well. So we like to present the business case to the brands we work with and we show them the delta or the amount of money, additional profit basically that they can earn by using our system for managing their transactions. going back to your question, if you're a user,

and you're a buyer on one of these brands, you go to check out, you don't really see anything different than you would see normally. You just check out, you pay credit card, then you pay with Apple Pay or Klarna. But in the background, what happens is that payment runs through our system. If there are no issues, just, you know, the happy path is those funds get released as they already would. But if maybe there's a dispute lodged or there are any issues there, then we would handle it for the brands so that they don't have to handle it a lot.

Speaker 2 (10:15)
I think that sounds like a very good solution. It takes so much up from your plate. I think that you said that usually brands and I can relate to that as well. There's a lot of plugins going on, a lot of different apps that you have to manage. That's all taken away from you. Now, if a dispute comes in, if a chargeback request comes in and you kick in, you start working on that. I am as a merchant, how much am I involved? What's my part in this?

Speaker 1 (10:44)
In an ideal circumstance, you wouldn't be involved at all. We'd be able to get all the information necessary, but often that does depend on what way it's set up or the type of service you're offering. So if it's something like, you know, physical products that are being shipped, often we can get all the information we need automatically and we don't have to, you be in consultation with the brand. But sometimes when it's services or digital services or more complex products where maybe they're custom built or there's certain elements, then we sometimes need to liaise with the brand to make sure we have

gathering all the correct information. But I would say for the vast majority of cases, it's information that we can gather ourselves and file and dispute on the brand's behalf so that they don't have to be hands on at all.

Speaker 2 (11:28)
That's a huge time saver. I have dealt with chargebacks and they take really like, I don't know, 20 minutes, half an hour if you have everything together and it just takes so much time away from your day.

Speaker 1 (11:37)
Yeah, there was a couple of reports released recently, one by Shopify themselves that showed that on average it's actually closer to four or five hours that brands take per chargeback by the time that they gather all the information together. it's not just the cost of losing the chargeback, it's the opportunity cost of having to spend hours on that. think going back to your earlier point, nowadays I think it is possible to build massive, massive businesses.

hopefully billion dollar businesses in some cases, with just a handful of people. It's not only one person. so what you don't want as a brand is lots of different plugins, lots of different services that you have to use and manage and you need to employ lots of people that have an I6 cost base to manage and deal with all of these. And that's kind of part of our hypothesis is that we're able to combine all of that into one simple system that

essentially lets you focus on the important stuff like marketing and growing the business and not having to deal with annoying time consuming stuff like managing chargebacks and disputes, like optimizing your checkout or even tax reporting. They're just annoying things that brands don't really want to do.

Speaker 2 (12:46)
couldn't agree more. Can you tell me some kind of case study or examples of companies of brands who have worked with what kind of results they saw?

Speaker 1 (12:54)
Yeah. So in, in probably the best case that we've, ⁓ this year we have a brand that we were able to increase in, in, in total baby, basically uplift profit by 18%. So that was a combination of, ⁓ increasing some conversion on the checkout side and then saving money by reaching, by, ⁓ handling and managing the charge backs better on the other side. So normally it's a, it's an, it's a business case. There's lots of elements to it. There are.

fraud tools that some brands use that charge per screened transaction. you know, if you're getting a high, if you're a high volume of transactions, you know, you'd be paying quite a lot of these fraud tools, but those fraud tools aren't necessarily incentivized to let every single payment through. They're really just trying to stop any payment that looks fraudulent in some cases. And so we would like to say that our, I guess we're aligned with

the brand a bit better there because we only make our money where the brand makes money. And so we'll optimize it to try and get as much sure as possible and reduce those false positives, which has an impact on conversion, but also has an impact on ultimately the bottom line and profit too. So yeah, I think the value that we provide depends a little bit on the type of business. So in some cases, if it's a high volume

brand with lots of transactions and maybe a lower AOV that might struggle with chargebacks. Then a lot of the value we provide is more on the back end of the transaction on managing chargebacks. And that's the thing. Whereas if it's a high average order value or priced items that are being sold, maybe lower volume conversion is what they care more about and optimizing the start of the transaction is maybe more of an important aspect. it depends a little bit what the brand is doing, but

And we'd like to think that for the most part, when we run the business case and we crunch the numbers basically, that there's a really compelling difference in the way they're currently set up versus ⁓ swapping to the TrustApp transaction process basically.

Speaker 2 (15:10)
Who's your perfect customer? You give some examples.

Speaker 1 (15:14)
Yeah, I think any modern ⁓ e-comm brand that's built on Shopify, RooCommerce, or even the scale where they've kind of custom built themselves and isn't fully satisfied with how efficient they're running the checkout process. And by the checkout process, I mean everything from the very beginning of the journey and conversion from the cart.

all the way through to payment authorization and acceptance and fraud management and chargeback management and the reporting of that afterwards. If they feel like they're not doing things in an absolute quarter class way or to the best of their ability, then I think we'll be able to add value there. So most of the time our sweet spot would be brands that are doing anywhere between say like a hundred K and 10 million, which is obviously quite a wide range. But if they're very, very small,

might not be able to show the impact as easily as if they have a little bit more volume. And if they're absolutely enormous, like doing hundreds of millions a year, then they likely have a lot of resources and systems in place and are going to be slower to move as well. we're kind of in that middle range that I was mentioning.

Speaker 2 (16:30)
I think a lot of our listeners will fall into this bracket and I think that's a perfect solution for them. Walk me through the typical onboarding process for a new customer. What steps are involved? How long does it take to get up?

Speaker 1 (16:42)
So it's very, quick to get up and running. In fact, a lot of the time what some brands will do is they will basically just add the plugin to their existing checkout and they might run it alongside what they're already doing and just maybe testing it at the start. And we encourage that as well because it has to work for both sides. it's as simple as adding any plugin basically toggling all the payment method. That's if you're using Shopify or WooCommerce or basically you can download the plugin.

a custom build side, it takes a little bit longer, but you're still only talking a couple of dev hours, hopefully nothing longer than that.

Speaker 2 (17:20)
When it comes to ⁓ internationalization, selling into different countries, different languages, do you support this as well?

Speaker 1 (17:29)
Yeah, absolutely. And that's one of the other advantages of using what we are, which is kind of like, know, merchant of record service, but like one with extended benefits is that, know, if you're a, let's say a German brand, you want to start selling in the U S if you don't want to get crippled with like international fees and very expensive payment processing, then you have to incorporate it in the U S and set up an entity there and a bank account there and, and, know, run your payments to the U S. Whereas by using TrustApp,

don't have to do that because we can do that on their behalf. So we can kind of localize for them and offer those payment methods. that's another benefit that we would offer to any brands that have those kind of international ambitions. And so a lot of the e-comm customers would be US based and kind of primarily selling the US, but for European businesses, it can be a difficult barrier to navigate to get into the US. So that's definitely an area that we can provide lot of value.

Speaker 2 (18:27)
That's a huge benefit. again, can talk from experience here specifically with US customers, they might not have international credit cards. So they only can pay on their local market in the US. And then if you're coming from the outside, that might give you issues just as a tip here for our listeners.

Speaker 1 (18:45)
Yeah. And to be honest, there's often a misconception or like what we've found is that brands themselves don't always know what the true cost of processing a transaction is because they'll see the headline payment processing rate from PayPal or from, know, Shopify payments or Striper, whoever it might be. they'll see that it's, you know, let's say 1.4 % or 2.9 % in the US, whatever it might be. And I think that's the only fee, but actually when you add in all the different, you know,

line items in a transaction in the checkout, the effective rate that they're paying could be closer to 6%, 7 % because once you add in the couple of cents you pay for your fraud screening, once you add in any other tools that you're running alongside the checkout, and then you add in maybe that it was an international card or there was a currency conversion that took place, all of these elements basically. ⁓

combined together to give an effective rate that is obviously a lot higher than most brands think. So when we run the business case, that's part of what we're showing is that you're actually losing this much every transaction and there is a way to optimize that.

Speaker 2 (19:55)
That's very important to highlight there. How does your pricing structure work? How do you judge?

Speaker 1 (20:00)
It's the exact same as a normal payment processor charge. So we just charge a simple per transaction rate that varies a bit depending on what country you're in. But that's it. We charge just the rate per transaction. So it's all bundled in. It's an effective rate that's charged for all the different things I mentioned, like the international localization piece, but also the wire protection, the shipping protection, the fraud prevention, chargeback management.

⁓ merchant records piece, which essentially means you do the tax reporting and all that. So it's all bundled into one effective rate. And as I said, the Delta is usually a couple of percent lower than the status quo that the brand is already using. So when you multiply that across the, that's between thousands of transactions a month, can be a big number that's added to the bottom line at the end of the month.

Speaker 2 (20:52)
Yeah, I think there's a lot potential of savings for a of merchants out there and obviously also streamlining operations. Before our coffee break comes to an end today, is there anything you want to share with our listeners that we haven't covered yet?

Speaker 1 (21:05)
No, I guess I would just encourage any brands that are listening to really dive into, you know, trying to figure out exactly how much they're paying for every transaction and to add in, you know, the time that they're spending on doing that as well. And if it's something that they're interested in, you know, getting help making that calculation or seeing what are options are there, I'd love if they would reach out, you know, directly to me, I'm sure, to make my email available there after the show and, else just reach out to Trusthub directly and we'll.

going through that with you and maybe it's something that's suitable for your brand.

Speaker 2 (21:37)
I will put the links in the show notes, then you just want to click away. Conor, thanks so much for giving us an overview. I think that's a very important topic for every merchant out there. And with very small profit margins of a lot of DTC brands, I think it's even more so important to optimize this part in their business. Thanks so much for your time today.