If you use Airwallex Cards and have a transaction you wish to dispute, please see here: How do I dispute a transaction?
This article will explain how to handle disputes and chargebacks as a merchant, using our Online Payments platform.
- What is a Dispute?
- How can I manage disputes via the web application?
- What are the stages of a dispute?
- What evidence do I need to submit for a dispute?
- How do I calculate my chargeback ratio?
- How can I monitor my dispute history?
- How can I reduce disputes/chargebacks?
- Are there fees associated with disputes?
What is a Dispute?
A dispute occurs when a shopper contests the legitimacy of a payment.
Dispute events generally happen on transactions processed with card-based payment methods, including Apple Pay & Google Pay. The shopper will reach out to the bank that issued their card to contest the payment. The issuing bank will then initiate the dispute flow, which is governed by the card scheme.
At Airwallex, we understand that disputes are a risk to your business and can be a time-consuming exercise to manage. To enable you to effectively manage disputes, we have implemented various features that have been detailed in our product documentation.
How can I manage disputes via the web application?
Airwallex will notify you of any new disputes via email, you can access the dispute details via the details button in the email or by directly accessing the dispute queue on the web application.
Disputes menu on our web application has two tabs:
- Response Queue: This tab lists all the dispute events that are open for your action, the dispute list is ordered based on the due date with the earliest expiring events at the top. You can either view details of the dispute or directly initiate the response (accept or challenge) to a dispute event via this screen. It is recommended to address the disputes before the due date to avoid escalations and higher dispute fees.
- All Disputes: You can access all the historical dispute events via this tab, allowing you to revisit past disputes or to view the details of events auto-resolved by Airwallex on your behalf.
What are the stages of a dispute?
A dispute can go through multiple stages and it can take a long time to finally resolve a dispute. Below are the dispute stages:
- Request for information: A shopper doesn’t recognise a transaction and has then requested more details about it.
- Pre-chargeback: This is an early notification of a chargeback, allowing merchants to refund before a chargeback is initiated.
- Chargeback: The shopper has requested a refund citing the reason detailed in the dispute.
- Pre-arbitration: The issuer has declined the evidence provided by you in the chargeback response, and the case has been escalated.
At any point in time for a dispute, it is crucial for you to understand below:
- What a combination of a dispute stage & status mean to you
- What actions are available to you when the dispute is in a given state
- What the implications are of any action that you take on a dispute
- The financial impact on you
- The potential/applicable fees
We have addressed all these questions in our product documentation.
What evidence do I need to submit for a dispute?
It is highly recommended that you proceed to challenge only when you are convinced of compelling evidence to back your defence. Otherwise, the issuer will decline the response, which will lead to escalation of the dispute and higher dispute charges.
Your evidence may differ depending on the reason why you would like to challenge the dispute. However, in general, some of the evidence you may choose to submit include:
- Proof of delivery
- Description of goods or services
- Invoice/receipt
- Customer communication
- Proof Showing distinct payments
- Refund evidence (if the transaction was refunded already)
- Customer details (billing address, name, email & IP address)
- Shipping information (applicable in case of physical goods)
- Service receipt (applicable in case of offline services)
How do I calculate my chargeback ratio?
Please note that the dispute ratio is different from the chargeback ratio. The dispute ratio includes dispute events in all different stages (see FAQ#3) whereas the chargeback ratio is specific to disputes in the ‘Chargeback’ stage.
Chargeback ratio is defined as the number of disputes in the ‘Chargeback’ stage, divided by the number of successfully captured intents over a given time period. Please note that dispute events escalated beyond chargeback (e.g. pre-arbitration) will also be considered in this calculation.
To calculate your chargeback ratio you will need to calculate:
- The number of successful payment intents for the specified period: you can calculate this by downloading your payment activity for your specified period and using the ‘payment status’ field
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The number of chargebacks: you can calculate this number by exporting your dispute activity under ‘Disputes’ > ‘All disputes’ into a report and filtering for disputes in the “Chargeback” or “Pre-arbitration” or “Arbitration” stage
Please note:
- A shopper can challenge the dispute up to 180 days from the date of payment, but in general this happens within 60 days.
- For determining the fee of a specific chargeback, Airwallex will calculate your chargeback ratio for each card scheme separately (e.g. your chargeback ratio for MasterCard transactions vs. Visa transactions)
How can I monitor my dispute history?
Airwallex enables you to review your dispute history and take necessary actions to optimise. You can find all of your historical disputes by navigating to Payments → Disputes → All Disputes. You can use filter criteria available on the screen to review performance under various filters or just export all the dispute activity for a given time frame and analyse it. The export option on the web portal allows you to add additional columns, providing you with more details on the dispute.
How can I reduce disputes/chargebacks?
There are several ways to reduce the number of disputes on your account:
- Opt-in the pre-chargeback programmes offered by Airwallex, these will help you to resolve the dispute before becoming a chargeback.
- Respond to all RFIs on time as these may turn into disputes.
- Help customers recognise their transactions by using the descriptor field to remind them of the goods or services they have purchased.
- If you are refunding a transaction to prevent a potential dispute, we recommend you use Airwallex’s refund process which ensures that funds are refunded to the same card or payment method used for the original payment.
- Respond to all disputes before the due date. Proceed to challenge a dispute only when you are convinced of compelling evidence to back your defence.
- Provide as many relevant documents as you can in the dispute response (where applicable).
- Ensure that your customers are presented with a full copy of policies/terms and conditions prior to customer purchase.
- Use the risk management settings to minimise fraudulent transactions.
Are there fees associated with disputes?
Yes, there are fees per dispute. See the relevant fee schedule for your region for full information on the pricing: