A dispute (also known as a chargeback) occurs when a cardholder questions your payment with their card issuer. The card issuer creates a formal dispute which immediately reverses the payment. The payment amount, along with a separate dispute fee levied by the card network, is deducted from your account balance.
There is a dispute resolution process through which you can respond and submit evidence to make your case that the payment was valid. If the dispute is found in your favor, the disputed amount and fee is returned back to you. If a dispute is upheld, the card issuer’s decision is final and the cardholder’s payment remains refunded.
When a dispute is opened by a customer with their bank, the following events occur (in order):
- The customer’s bank notifies Payrexx of the dispute.
- The bank automatically deducts the disputed amount and a dispute processing fee from Payrexx.
- Payrexx pauses the payouts and removes the funds from the merchant’s Payrexx account balance to cover the dispute deduction.
- Payrexx notifies the account owner of the dispute, passing along all information received from the bank related to the dispute via the Dashboard and over email.
Once the dispute is opened and the funds have been deducted, the merchant has the opportunity to submit evidence in order to prove the charge was legitimate and potentially overturn the dispute.
If you believe the dispute is in error and want to challenge it, you can upload evidence supporting why the payment was valid using our Dispute Form. When you formally submit evidence, Payrexx will immediately send the evidence to the cardholder’s bank for review.
Some things to keep in mind about submitting dispute evidence:
- Banks only review evidence once, so evidence can only be submitted once.
- The bank will make a decision somewhere between 60-75 days after the evidence due date. The decision is the bank’s alone and the outcome is final.
- If the dispute is decided in your favor, the funds will be returned to your Payrexx balance, including the dispute fee.
The dispute process is highly formalized and rigid, so banks will not communicate about a dispute in any manner beyond the evidence submission process. The only way to resolve a dispute is to submit evidence showing the charge was legitimate, or working with the customer to withdraw the dispute.
We will inform you by email about everything necessary. If you have any questions about the dispute process, feel free to contact us at any time.