As a Payment Facilitator, you will need to deal with chargebacks or inquiries from your merchants.
How do Inquiries and Chargebacks Happen?
When a customer of your merchants has an issue with a charge on their credit card, they can contact their bank to dispute the charge.
The bank then makes a formal chargeback or inquiry for more information. As long as the transaction was processed in some way by your system, the chargeback will be associated with you as the PayFac and directly associated with your sub-merchant.
Also known as a Retrieval Request, it's an optional stage of a dispute where the issuing bank asks for evidence that the transaction is valid without asking for the money back from the merchant. If the merchant fails to respond or the evidence provided isn't enough the inquiry will turn into a first chargeback with financial impacts.
If the cardholder's bank makes a formal chargeback, then the processor takes the disputed amount from your Operating Account and we create adjustment transfers to retrieve the money from the merchant and put it back in your account.