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I'm asking for some input from any of you that have ever been a victim, or know someone that has been a victim of chargeback fraud, and can let me know under what circumstances it occurred.
I've built a money transmission app for virtual goods, and the core focus (other than the fact that it is for virtual goods) is chargeback fraud prevention. I applied to YC with my app.
Some background:
I used to flip video game items in high school, and this was a big problem I and many others faced. People would send you money through an app like PayPal and you'd give them the goods. A couple of days later, you'd get a chargeback. Unless you gathered some kind of transaction proof yourself, you'd be out of the money as well as your goods. This led to many subpar solutions, like dealing with trusted middlemen with high transaction fees.
Here are the most common chargeback scenarios that I am aware of and have provided solutions for/working on providing a solution for in my app:
1. Buyers remorse
2. A family member stealing from another (a form of identity fraud)
3. Elaborate reseller scams
4. Infected computers which are used to make payments through some kind of remote-controlled software like TeamViewer, or other remote administrative tools
5. Dishonest buyers claiming it was not them that made the purchase (another form of identity fraud)
Thank you in advance for your input. Feel free to give some really constructive criticism as well.