Payment processing technology startup Stripe Inc. today launched a new feature that is sure to be popular with its business users: Chargeback Protection.

A chargeback is a demand by a credit card provider for a retailer to make good the loss on a fraudulent or disputed transaction. Often a bane of any business that accepts card payment, chargebacks can be costly as well, particularly given that a business has provided the good or service without knowing a transaction was fraudulent, and has little to no redress available.

Stripe’s new service is insurance for business users of its payments service should and when a chargeback occurs. In the event of a chargeback from a credit card provider, Stripe business users will be automatically reimbursed for both any disputed payments and any associated fees, no evidence submission required.

The offer of the new service is part of its Stripe’s machine learning-based fraud detection tool Radar. Radar is claimed to prevent fraud and protect sales against future chargebacks. Stripe said it’s confident that its detection level is so high that offering chargeback protection is potentially a small financial burden.

For smaller businesses, Chargeback Protection will help smooth cash flow by removing the unpredictability of disputes, according to the company.

“Fraudulent disputes represent a painful and growing issue for companies of all sizes,” Stripe said in a statement. “These disputes often have a material impact on a business’s cash flow, as funds are pulled from their account while the dispute is assessed. This can take up to three months, during which time the disputed funds remain unavailable to the business, even if they ultimately win the dispute.”

The announcement, one that will likely be welcomed by Stripe users, comes as the company inches closer to a potential initial public offering. After having raised $245 million on a $20 billion valuation in September and an additional $100 million on a $22 billion valuation in January for a total of $785 million, the nine-year-old company is ripe to go public.

Officially, though, Stripe has denied that it has any plans to go public. Although the traditional model of venture capital investors looking for an exit in around three to five years has fallen by the wayside in the 2010s, nine years without acquisition or IPO to provide investors an exit is still fairly rare for tech startups.

The new Chargeback Protection feature is available to Stripe users in both the U.S. and Europe from today. The feature is optional and does come at a cost with pricing starting at 0.4% per transaction on top of Stripe’s existing transaction fees.

Image: Stripe