What is a Chargeback

When a customer decides to dispute a charge made to their debit or credit card, it is referred to as a chargeback. The chargeback initially results in the transaction being reversed and the funds that you received for the payment being returned to the customer.

When a dispute is filed, the acquirer will debit the transaction amount from the merchant’s account. The merchant will then need to gather compelling evidence. This will help strengthen their response and prove their innocence from fraudulent activity. The funds will return to the merchant. That is, if the evidence favors an overturn of the cardholder’s dispute. 

Chargebacks were introduced as a form of consumer protection against fraud.

Chargebacks as Payment Facilitator

As a Payment Facilitator, the acquirer will debit the charges from your Operating Account. It is up to you to collect the money from the Merchant. 

Chargebacks within Finix Payments 

Finix Payments takes care of the process of collecting funds from your Merchants when they experience a Chargeback. The acquirer will automatically deduct the chargeback amount from your Operating Account. 

When a chargeback is issued to a merchant, they are automatically debited and that money is placed in the Operating Account. 

If the merchant accepts liability, the amount of the chargeback still resides in your Operating Account.

If you or the merchant decide to represent a dispute, the acquirer will issue a temporary credit to your Operating Account, in turn, we will generate adjustment transfers to credit the amount back to the merchant's account.

The issuing bank can decide whether to accept or decline the representment depending on their analysis of the evidence provided. If the issuer accepts the money will stay in the merchant's account.

If the issuer declines, the process varies between the card networks but in general a second chargeback will be filed, the merchant will be debited and the funds placed in your Operating Account.

If either party disagrees with the resolution up to this point, there is one last stage the chargeback can have called Arbitration. In this stage the card network will appoint a committee to issue a final decision and the losing party is liable for the review and filing fees associated with the Arbitration which can be up to $500 depending on the network. There are also other fees for any technical errors that are assessed by the networks that can cost $100 each and are also charged to the losing party.

Handling Chargebacks in Finix’s Dashboard

1. Under the TRANSACTIONS header, click on Disputes. This displays the disputes on the platform. You can use filters to search for a specific dispute. 

2. Click on a dispute link to view additional details, such as transfer details, uploaded evidence, adjustment transfers. You can also upload dispute evidence. 

If you choose to represent the merchant, either you or the merchant have the ability to upload evidence files for the dispute. Often, Worldpay asks for additional documentation regarding the order or a shipping receipt. Please review the details of the Dispute.

If your processor is Litle (Vantiv eComm), the evidence files will be submitted automatically to Worldpay - this is only available if the chargeback credentials are enabled. The client needs to work with Worldpay to get the credentials and then share with Finix. This way, when dispute evidence is uploaded, it will not fail. 

Note: Current functionality allows you to upload evidence to WorldPay but you still have to send the representment signal directly on WorldPay's dashboard.