Casap, a cutting-edge disputes automation and fraud prevention platform, recently secured $8.5 million in funding to expand its AI-powered solution tailored for banks, credit unions, and fintech companies. The round of funding was spearheaded by Lightspeed Venture Partners, with contributions from Primary Venture Partners, Commerce Ventures, Curql, Alloy Labs, as well as prominent figures from leading fintech firms such as Chime, Robinhood, and Square. This financial boost will enable Casap to further develop its AI decision-making capabilities, assisting financial institutions in reducing operational expenses, minimizing fraud-related losses, and enhancing the overall customer experience.
According to Shanthi Shanmugam, the co-founder and CEO of Casap, the exponential increase in first-party fraud and dispute volumes has placed immense strain on financial institutions. By utilizing intelligent automation, Casap’s platform empowers banks, credit unions, and fintech firms to efficiently address these challenges, streamlining dispute resolution processes while significantly reducing costs. Shanmugam emphasized that Casap’s goal is to transform what is typically viewed as a cumbersome customer service experience into an opportunity to cultivate consumer loyalty.
Financial institutions are currently grappling with the task of resolving the staggering 238 million chargebacks reported annually, a process that typically takes between 45-90 days to complete. First-party fraud has become a growing concern, especially in the wake of the COVID-19 pandemic, with more consumers disputing legitimate charges in efforts to evade payment obligations. This spike in fraudulent activities, coupled with a shift towards filing disputes directly with payment providers instead of merchants, has led to a significant uptick in case volumes and substantial financial losses for institutions. Despite efforts to outsource chargeback operations and adhere to complex regulations, many financial entities struggle to meet consumer expectations, resulting in a potential 50% attrition rate for those dissatisfied with the level of service provided.
Casap’s innovative approach, incorporating AI-powered automations and a proprietary “first-party fraud score,” offers a comprehensive solution to dispute resolution without the need for human intervention. The platform leverages advanced algorithms to analyze evidence, predict outcomes, and automate essential actions such as issuing credits, pursuing chargebacks, and responding to merchants. By utilizing its fraud score to identify suspicious individuals and entities proactively, Casap aims to reduce disputes significantly within the financial ecosystem.
Aaron Frank, a Partner at Lightspeed, expressed admiration for the expertise brought by Shanmugam and Saisi Peter to address this widespread issue across multiple industries. The company’s early success serves as a testament to the transformative technological innovation that Lightspeed seeks to support.
Casap sets itself apart with its transparent chargeback model, which includes publicly available weights, setting a new industry standard for transparency and innovation. With a focus on regulatory compliance and seamless integrations, the platform’s advanced decision-making processes utilizing AI technology can drastically reduce resolution times from days to minutes, resulting in substantial cost savings and operational efficiency improvements for financial institutions.
The feedback from clients has been overwhelmingly positive, with institutions across the payments landscape benefitting from Casap’s services, including major fintech companies and established entities like Chartway Credit Union. Karin Collier, Director of Card Services at Chartway Credit Union, highlighted the transformative impact of partnering with Casap, emphasizing the improved dispute resolution processes, enhanced member experiences, and cost-saving measures resulting from the collaboration.
Looking ahead, Casap remains dedicated to providing a top-tier solution for resolving disputes and chargebacks, committed to delivering results up to four times faster than its competitors. By offering financial institutions the tools needed to address genuine disputes promptly while mitigating fraud-related expenses, Casap aims to redefine how trust and loyalty are fostered in the midst of evolving fraud threats.
The expertise and industry recognition garnered by Casap’s co-founders, Shanmugam and Saisi Peter, demonstrate the company’s commitment to innovation and excellence in the realm of financial technology. Their collective experience in enhancing consumer-centric experiences within the fintech sector has propelled Casap’s rapid growth and solidified its position as an industry leader.
Lastly, Casap has received accolades from industry leaders, securing the prestigious NACUSO 2024 Next Big Idea Competition. This recognition underscores the company’s commitment to driving innovation and excellence in the realm of disputes automation and fraud prevention.
In conclusion, Casap’s funding milestone, coupled with its innovative AI-powered solutions, signals a promising future for financial institutions seeking to streamline dispute resolution processes, reduce fraud-related losses, and enhance overall operational efficiency. As the company continues to expand its reach and deliver tangible results for its clients, Casap remains at the forefront of reshaping the landscape of financial technology and setting new standards for transparency and innovation in the industry.