PayU introduces Fraud Liability Protect, an AI-powered solution designed to enhance transaction success and reduce chargebacks for Indian merchants accepting international card payments, with added fraud coverage and smarter risk assessment.
PayU has launched an artificial intelligence-based fraud tool for Indian merchants taking international card payments, in a move aimed at lifting conversion rates while trimming losses from disputed transactions.
The new service, called Fraud Liability Protect, was unveiled at Global Fintech Fest 2026 and combines machine-learning risk scoring, variable authentication and cover for eligible fraud chargebacks. PayU says the system examines cross-border card transactions using payment and behavioural signals, then adjusts how much authentication is applied to each payment.
The company argues that this kind of risk-based approach is meant to solve a familiar problem in online payments: tighter controls can block genuine customers, while looser checks can leave merchants exposed to fraud and chargebacks. PayU said merchants using the service have seen international card success rates improve by about 4% to 5%, although the company did not provide independent verification of those figures.
PayU also cited one online travel merchant that reported a 14% increase in payment success rates and an 83% decline in its fraud-to-sales ratio after using the product. The company did not name the customer or disclose the sample size, testing period or baseline behind the figures.
Manas Mishra, PayU’s chief product officer, said the aim was to make fraud controls more selective so they do not harm payment acceptance as merchants expand into overseas markets. He said the service is designed to separate genuine transactions from risky ones and to address both human-driven and AI-enabled fraud.
The liability element is a key part of the pitch. In PayU’s model, qualifying fraud cases can be covered by the company rather than left with the merchant, subject to the terms of the programme. That matters because chargebacks can force merchants to absorb the cost of disputed card transactions even after a payment has gone through.
Fraud Liability Protect is being positioned mainly for small and medium-sized businesses in sectors such as travel, online travel agencies, airlines, e-commerce, quick commerce and food technology. PayU said Zomato is among the businesses using the service for international card transactions.
The launch reflects a wider shift across payments providers towards machine-learning systems that try to balance fraud prevention with checkout completion. That balance is especially difficult for card-not-present transactions, where merchants cannot physically verify the cardholder and must rely on transaction data, device signals and authentication tools to make risk decisions.
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