How does the chargeback process work?

When a customer disputes a transaction, it can trigger a chargeback—a formal reversal of the payment. Here's how the process works and what you can expect at each stage.

Step 1: Chargeback Initiation

The process begins when a customer contacts their bank to dispute a charge. The issuing bank deducts the transaction amount via the card network and acquiring bank, ultimately debiting your account through Paysafe. You’ll receive a notification with details about the dispute.

At this point, you must decide whether to accept the chargeback or challenge it by providing supporting documentation.

Step 2: Representment  

If you choose to dispute the chargeback, you’ll need to submit evidence (e.g., receipts, delivery confirmation, communication records) within the required timeframe.

Paysafe then forwards your documentation to the acquiring bank to contest the chargeback.

Step 3: Chargeback reversal  

If your representment is accepted, the chargeback may be reversed.

In some Visa fraud cases, even if documentation is submitted, liability may remain with you if the cardholder does not accept the outcome.

At this point, the cardholder must decide whether to accept the outcome or continue the dispute.

Step 4: Pre-Arbitration

If the cardholder continues to dispute the transaction after reviewing your evidence, they may initiate Pre-Arbitration.

You must then decide whether to:

• Accept the case, which results in a debit to your account and ends the dispute, or
• Decline the case and submit additional documentation to continue contesting it.

Step 5: Arbitration

If you decline the Pre-Arbitration, the issuing bank may escalate the case to Arbitration with the card network. This is the final review stage, and a decision will be made by the respective Arbitration committee.

At this point, all previously submitted documentation is reviewed by the card network and no new evidence can be added.

The Arbitration committee doesn’t have a certain timeframe to make a decision, and it may take several months before receiving final ruling.

Compliance Review

In some cases where chargeback rights don’t apply, a Compliance case may be raised if there’s a suspected violation of card processing rules.

A Pre-Compliance must be raised before escalating the case to the Compliance stage. You’ll be notified accordingly and asked to provide specific documentation required for defending the case.

Arbitration and Compliance cases are the final stages of the dispute process. Additional fees will apply if the case is ruled in favor of the other party.

Are there any fees associated with arbitration?

There is a Case Filing Fee of $575, paid by the filing party.

If you lose the case, you’ll be responsible for the filing fee, any applicable penalties, and the disputed transaction amount. All fees are determined by the card network and are subject to change.