Payments Dive Trendline on Embedded payment tools make inroads

Findustry AI founder Jonathan Razi has a new idea for merchants that he says will help them automate management of nettlesome card chargebacks.

Chargebacks have become a headache for merchants with customers increasingly trying to get their money back for purchases, including in cases of “friendly fraud” where they keep goods and services they receive, but dispute the charges.

As a longtime payments professional, Razi, who is also CEO of Findustry AI, had an idea in 2024 to help merchants better manage chargebacks. He also had the industry contacts, thanks to his past experience leading another payments company called CardX, to form a small team in the Chicago area that could create an AI tool to address the merchants’ pain point.

CardX, which helped merchants integrate surcharge systems for payments, was sold in 2021 for an undisclosed amount to payments processor Stax Payments.

Findustry AI was launched last year and rolled out its public-facing brand of agentic chargeback services in June, after Razi raised $2.25 million, he said. He declined to provide financials for the startup, but said it doesn’t need any more funding at the moment. 

For now, he’s only willing to name two clients: Cleveland-based Electronic Merchant Systems, which does business as Kurv, and Indianapolis-based payments facilitator AllPaid. Kurv is using the chargeback agent for its own operations, and reselling to its merchant clients, large and small, Razi said. AllPaid uses the AI tool, which can be embedded in client portals, to handle payments for its municipal and county clients.

In a wide-ranging conversation this month, Razi, who is also a lawyer by training, talked about his new venture and other key topics in the payments realm, including agentic commerce, Visa’s new fraud program and stablecoins.

PAYMENTS DIVE: How did your sale of CardX to Stax go, and what happened for you after the deal?

JONATHAN RAZI: I sold Card X November 5, 2021, which is a date that I mentioned in retrospect, because you know they always say you can't time markets, but actually we did really well with market timing, because if you look back at that date, that continues to be an all-time high for many growth stocks. 

So, what’s your new Findustry AI venture all about?

At the high level, what we're doing is we are building AI agents for payments workflows, and what I mean by that is, we're using generative AI to automate payments workflows that you used to have to have a human employee to do.

On a related note, what’s your view of agentic commerce?

Agentic commerce is very, very early. If you don't mind my saying, I think right now there are more builders than users of agentic commerce. Some of the stuff is a little bit far-fetched. Some of the stuff will happen, probably the least sexy things end up happening. The idea that one day you're going to say ‘plan my whole trip to Italy’ and it books like everywhere you're going, I think that's a little bit far-fetched. We actually kind of like to book our own trips, at least I do.

How does your new chargeback AI business benefit merchants?

The two main benefits are increased win rate [with chargebacks] and labor cost savings. We're typically partnering with growth companies, so instead of laying employees off, I always recommend reallocating them to some other need in your business.

Enterprise can save a lot, but also SMBs can now increase their win rates, fight disputes they didn't have the time to fight before. The small business owner doesn't know the Visa reason codes, the defense requirements and evidence needed. They don't know that the AI agent knows on their behalf.

What’s the situation with chargebacks right now?

Chargebacks are growing across the whole ecosystem, especially in card not present. There's a lot of first-party fraud, so-called friendly fraud, where people say it wasn't me, but they're really just unsatisfied with the purchase, and that creates a lot of time wasted on the part of the merchant responding to these disputes. I'll say recurring membership billing is a great space for a solution like this, because the card brands are introducing powerful tools, but it's just getting more and more complicated.

Visa has introduced its new Visa acquirer monitoring program, known as Vamp for short. What’s your take on it?

Visa really tightened the standards, and now merchants end up in higher risk categories with chargeback ratios that were lower than before. So, this is indicating to merchants they can't afford to let this problem grow and grow in their business, or else they could even have their merchant accounts shut off to really put it in the most extreme way. 

What’s your take on federal or state government regulatory developments for protection of consumers and modernization of payments?

If you're just going to place a bet, your bet should be on more and more dispersion at the state level, meaning more and more states taking it upon themselves to create the rules for consumer protection that they think are right for their states, and others doing it a different way. It's typically that way because it's hard for us to reach the required consensus at the national level.

You have an environment where, if you're a national player, you're really going to have to have a product that sort of keeps up with all of the different state law regimes in all the places where you have customers. It sort of raises the cost of compliance for pretty much every processor, every platform that's out there.