PayU has introduced an AI-powered Fraud Liability Protect solution for Indian merchants accepting international card payments, aiming to reduce exposure to fraud and improving payment success rates.
The solution was unveiled at the Global Fintech Fest 2026 and uses artificial intelligence and risk-based decision-making to assess cross-border transactions. The company said the product is designed to address a persistent challenge in international payments, where stronger fraud controls can add authentication friction and affect legitimate transactions, while lighter controls can leave merchants more exposed to fraud and revenue losses.
AI-Based Checks Assess International Transactions
Fraud Liability Protect combines three core capabilities. Its AI and machine learning-powered risk assessment evaluates international card payments using multiple transaction and behavioural signals.
The system also uses dynamic risk-based authentication to determine the level of verification required for a transaction. Low-risk payments are generally processed without additional friction, while transactions considered higher risk are subjected to stronger authentication.
The third component provides fraud liability protection against unwarranted fraud chargebacks, with the aim of protecting merchants’ revenues from international card fraud.
Manas Mishra, Chief Product Officer at PayU and Wibmo, said the system is intended to protect Indian merchants from both human-initiated and AI-enabled fraud while helping distinguish genuine transactions from risky ones.
According to Mishra, merchants using PayU are already seeing an approximately 4 to 5 per cent improvement in international card payment success rates, along with a significant reduction in fraud exposure.
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PayU Reports Higher Payment Success Rates
PayU said the solution is particularly relevant for Indian small and medium-sized merchants operating in areas such as travel, online travel agencies, airlines, e-commerce, quick commerce and food-tech. In these sectors, cross-border payment declines and fraud can directly affect revenue and customer experience.
The company cited the experience of a prominent online travel merchant that adopted Fraud Liability Protect. According to PayU, the merchant recorded a 14 per cent improvement in payment success rates and an 83 per cent reduction in its fraud-to-sales ratio after adopting the solution.
The report also said Zomato uses PayU’s Fraud Liability Protect to provide customers with a more reliable payment experience while maintaining appropriate controls for higher-risk international transactions.
Balancing Fraud Prevention With Payment Conversion
PayU’s approach seeks to balance fraud prevention with payment acceptance as Indian merchants expand across international markets. The company said sophisticated AI-related scams and chargebacks have made this balance increasingly important for businesses handling cross-border payments.
By combining automated risk assessment, transaction-specific authentication and liability protection, the solution is designed to allow lower-risk transactions to proceed with less friction while applying stronger controls where greater risk is detected.
PayU said the system integrates with PayU Checkout and is intended to help merchants protect revenue and reputation while maintaining payment conversion rates as they process international card transactions.
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