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What is a Chargeback?

A chargeback is a card payment dispute raised by a cardholder and lodged by their issuing bank.

They occur when the cardholder believes a transaction is fraudulent, unauthorised, or otherwise incorrect, and the bank requests that the transaction amount be returned.

If a chargeback is successful, the disputed funds are refunded to the cardholder and debited from the merchant responsible for the transaction. Depending on how your platform is set up, this merchant may be:

  • you, as the platform or marketplace
  • a sub-merchant operating on your platform
  • or Zai

The responsible party depends on how chargebacks are managed within your platform configuration.

The merchant is given the opportunity to respond to a chargeback by submitting supporting evidence. The issuing bank reviews this evidence and may accept or reject it in favour of the cardholder. If the evidence is rejected, the dispute can be escalated to arbitration through the relevant card scheme.

For ways to reduce the occurrence of chargebacks, see our guide to Managing Chargebacks here.