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What happens when a chargeback occurs? What does the process look like?

Here is an overview of the chargeback process at Payyo:

Chargeback Lifecycle

  1. Payyo receives a notification from the acquirer that the cardholder has opened a chargeback. 
  2. The money is immediately returned to the cardholder’s bank. The transaction amount will be deducted from the merchants balance.
  3. Payyo notifies the merchant by email to contact the customer and send us any relevant information and correspondence that could be used to help dispute the claim.
  4. Payyo will forward any relevant information to the issuing bank for their review.
  5. The issuing bank may request more information to help confirm that the transaction was legitimate. 
  6. Payyo notifies the merchant of the outcome

If the merchant does not reply within 3 days, the chargeback is treated as accepted and the dispute is marked as “lost”.

There are two possible outcomes of the dispute:

LOST: If the decision is closed in the cardholder’s favour, chargeback will be marked as lost and the money will be returned to the cardholder’s account

WON: If the information provided was sufficient to dispute the cardholder’s claim, the case will be marked as won and the funds will be returned to the merchant’s balance.

Updated on July 7, 2020

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