| What is a Chargeback? |
 A Chargeback occurs when a customer successfully disputes a transaction with their issuing bank and has the transaction reversed. This process is initiated by the customer contacting their issuing bank and demanding a refund for a purchase appearing on their credit card statement. The card issuer interprets the Card Scheme regulations to decide how to proceed with the disputed transaction. The card scheme regulations define the rules that govern chargebacks and these favor the customer. These regulations are set by Visa, Mastercard and JCB.
The Internet Merchant Account agreement with your acquiring bank allows them to transfer the liability for chargebacks back to the merchant. In the case of a Payments Bureau there is a longer settlement period. This means they will hold the funds for a longer period of time after the payment has been processed. In some cases your acquiring bank or the Payments Bureau may require you to pay a Bond at setup time. The size of this bond is based on a number of factors such as the your average transaction amount and your level of risk in relation to fraud and chargebacks. Certain industries and products are more prone to fraud than others. One method of reducing your exposure to chargebacks is to have a detailed terms and conditions displayed on your website. When considering with an acquiring bank and a PSP or a Payments Bureau you should investigate their approach, fee's and handling of chargebacks.
Costs & Fees << Index >> Payment Methods and Currency Conversion |
