Payment Dispute

A Payment Dispute occurs when a cardholder questions a transaction with their card issuer. The issuer initiates a dispute on the cardholder’s behalf, and the merchant is required to respond with evidence to support the legitimacy of the disputed transaction.

If the dispute is not resolved in the merchant’s favor, the transaction amount is returned to the cardholder in a process known as a chargeback.

Payment disputes can be initiated for various reasons, such as unauthorized charges, incorrect amounts charged, or dissatisfaction with the goods or services received. Merchants need to have proper procedures in place to handle payment disputes and minimize the occurrence of chargebacks. This includes the following:

  • keeping detailed records of transactions
  • providing clear and accurate descriptions of goods or services
  • maintaining good communication with customers

It’s also important for merchants to understand the dispute resolution process of the card networks they work with, as each network may have its own rules and procedures.