PayU has launched an AI-powered Fraud Liability Protect tool to enhance secure cross-border transactions for Indian merchants, promising increased success rates and reduced fraud losses amid growing digital commerce challenges.
PayU has launched an AI-powered Fraud Liability Protect tool for Indian merchants taking international card payments, a move aimed at cutting fraud exposure without slowing legitimate transactions. The company unveiled the product at Global Fintech Fest 2026, saying it is designed to address a familiar trade-off in cross-border commerce: tighter controls can block genuine customers, while lighter checks can leave merchants open to losses.
The system combines three layers of protection. It uses artificial intelligence and machine learning to score international card payments against transaction and behavioural signals, then applies risk-based authentication that adjusts verification to the threat level. Lower-risk payments can pass with less friction, while higher-risk transactions face stronger checks. PayU also says the product includes liability protection against unwarranted fraud chargebacks, which the company argues should help safeguard merchant revenue.
Manas Mishra, PayU’s chief product officer, said the service is intended to protect merchants from both human-run and AI-enabled fraud while separating genuine activity from suspicious transactions. PayU said merchants already using the system are seeing an improvement of about 4% to 5% in international card payment success rates, alongside a meaningful fall in fraud exposure.
The company said the tool is especially relevant for smaller merchants in travel, online travel agencies, airlines, e-commerce, quick commerce and food delivery, where failed cross-border payments can quickly affect sales and customer experience. PayU pointed to one online travel merchant that it said recorded a 14% rise in payment success rates and an 83% drop in its fraud-to-sales ratio after adopting the product. It also said Zomato uses the service to make international card payments more reliable while keeping stronger controls in place for riskier transactions.
PayU said the product integrates with PayU Checkout and is meant to help merchants preserve conversion rates as they expand abroad. The broader pitch reflects a wider challenge in payments: as AI-driven scams and chargebacks become more common, firms are looking for systems that can block bad actors without creating unnecessary friction for customers.
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