What is a pre-chargeback program?
With pre-chargeback programs, Airwallex is helping you to resolve disputes before they become chargebacks.
This is primarily useful for businesses with increased dispute ratios. Card schemes monitor chargeback ratios on merchant and acquirer level and may impose restrictions or fines for businesses with increased chargeback ratios. By resolving disputes before they become chargeback, these cases will not count into your business' chargeback ratio.
To resolve the disputes before they become chargeback, the dispute is typically automatically refunded in pre-chargeback stage based on pre-configured rules.
What’s changing?
Visa and MasterCard are significantly increasing the fees for disputes resolved in the pre-chargeback stage. To help your business maintain low dispute costs, Airwallex will stop auto-enrolling customers onto a pre-chargeback program.
With this, disputed Visa and MasterCard payments will follow the regular dispute flow and will no longer be automatically accepted on your behalf. You can find more information on this in our product documentation.
The unsubscription will happen over the next few weeks, from 30th December 2024. Until then, you may still see some disputes being accepted in the pre-chargeback stage as per your previous enrolment.
If you would like to remain enrolled in the pre-chargeback programs, you can reach out to your account manager or reach out to our support team.
Due to price changes from Visa and MasterCard, we are updating the fee schedule for pre-chargeback related fees. This fee schedule will be effective on your account on February 1st 2025. Please note that this will only apply to disputed payments. You can find the details in our fee schedule.
FAQs
Why was I enrolled in this previously?
With pre-chargeback programs, Airwallex helped you to resolve disputes before they become chargebacks - the dispute was typically automatically refunded in pre-chargeback stage based on pre-configured rules. Under Visa and Mastercard’s previous fee structure, pre-chargeback programs helped merchants save cost, because despite refunding the transaction amount ,the saving on the fees could offset this.
With Visa and MasterCard significantly increasing the fees for disputes resolved in the pre-chargeback stage, for merchants with low dispute rates, these programs are no longer cost-effective. In future, if your business faces scrutiny from card schemes due to heightened chargeback ratios. Airwallex will notify you and help you to re-enrol into pre-chargeback programs.
What happens to disputes during the unsubscription period?
Unsubscription is not immediate and will happen over the next few weeks, beginning from 30th December 2024. In the meantime you may still see some disputes being accepted in the pre-chargeback stage as per your previous enrolment.
Are these programs still cost-effective despite the price increase?
For merchants with low dispute rates, these programs are no longer cost-effective. For merchants with higher dispute rates, the programs can still help to reduce scrutiny from card schemes and avoid potential fines at a relatively low cost.
What happens if I choose to opt in?
If you choose to opt in, you’ll be agreeing to the pre-chargeback fees outlined by Visa and MasterCard, which may not be cost effective if your business does not have a high chargeback ratio.If your business faces scrutiny from card schemes due to higher chargeback ratios, Airwallex will notify you and help you to re-enroll into pre-chargeback programs.
Some customers with a high chargeback ratios will be required to enroll into the pre-chargeback program. To reduce your dispute rates, you can find helpful tips in our Help Center.