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Chargebacks

Prevent, fight, and understand chargebacks and disputes

Chargebacks, also known as disputes, occur when a customer challenges a transaction with their issuing bank. Common reasons include:

  • Customer was charged twice
  • Customer was charged but did not receive goods or services
  • Unauthorized use of a card (lost or stolen card)
  • Friendly fraud (customer disputes a legitimate transaction)

Safepay has no control over customers lodging chargebacks.

Understanding Chargebacks and Disputes

Safepay actively supports merchants throughout the chargeback and dispute resolution process. Below is a high-level overview of how the chargeback cycle works.

sequenceDiagram participant Customer participant IssuingBank as Issuing Bank participant AcquiringBank as Acquiring Bank participant Safepay participant Merchant Customer->>IssuingBank: Files a dispute / chargeback IssuingBank->>AcquiringBank: Notifies chargeback request AcquiringBank->>Safepay: Forwards chargeback details Safepay->>Merchant: Informs merchant of the chargeback Merchant->>Safepay: Accepts or disputes the chargeback Merchant->>Safepay: Provides supporting evidence Safepay->>AcquiringBank: Shares evidence for review AcquiringBank->>IssuingBank: Passes evidence for review IssuingBank->>AcquiringBank: Makes a decision IssuingBank->>Customer: Informs them of the decision AcquiringBank->>Safepay: Forwards chargeback details Safepay->>Merchant: Marks dispute as Won or Lost

The flow above shows the First Chargeback stage. A dispute can go through up to three stages, though most are resolved in the first.

flowchart LR A[First Chargeback] -->|Issuer rejects evidence| B[Pre-arbitration] B -->|Issuer rejects evidence| C[Arbitration] A -->|Accepted or won| D[Case closed] B -->|Accepted or won| D C -->|Scheme decides| D
StageWho decidesCan you submit evidence?Time to respond
First ChargebackIssuing bankYes10–15 days
Pre-arbitrationIssuing bankYes, additional evidence10–15 days
ArbitrationCard schemeNoDecision in 60–90 days

First Chargeback

When a chargeback is filed against one of your transactions, Safepay notifies you. You can either accept it or fight it:

  • Accept: the case is closed and the disputed amount is deducted from your next settlement.
  • Fight: you reject the chargeback and submit evidence. This response is called the second presentment (also known as representment). If the issuing bank accepts your evidence, you win the case. If not, the case moves to pre-arbitration.

You must respond within 10–15 days of being notified.

Pre-arbitration

If the issuing bank isn't satisfied with the evidence in your second presentment, it raises a pre-arbitration request through the card scheme's dispute portal and asks for further proof. Safepay will email you to collect it.

This is the last chance for you and the issuing bank to settle the dispute between yourselves. As in the first stage, you can:

  • Accept: the case is closed and the disputed amount is deducted from your next settlement.
  • Reject: you submit additional evidence. The issuing bank reviews it and either rules in your favour or escalates the case to arbitration.

You must respond within 10–15 days.

Arbitration

Arbitration is the final stage. If the issuing bank still considers your evidence insufficient, it escalates the case to the card scheme (for example, Visa or Mastercard), which acts as an independent reviewer.

You cannot submit new evidence at this stage. The scheme decides based only on the evidence already provided, so your evidence in the earlier stages is critical. A decision can take 60–90 days.

If you lose at arbitration, you lose the disputed amount and are charged an arbitration fee of up to $500, plus any associated scheme fees.

Responding to a Dispute

As a merchant, if you receive a chargeback/dispute, Safepay will first inform you by email. You can also see any pending disputes on your Safepay Merchant Dashboard.

1

Open Payments 2.0 and click on disputes on the left menu

View your Disputes

2

Click on any dispute to see its details

View the details of the Dispute

3

Decide whether to accept the dispute or submit evidence to fight the dispute.

Accept the dispute by clicking the button
Fight the dispute by submitting evidence

4

If you choose to fight the dispute, submit evidence

Submit Evidence to fight the dispute