How to manage disputes and chargebacks on your Online Payments

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? 

A dispute is where a cardholder will challenge a transaction on their account with a merchant. At this stage you as the merchant have the choice to either accept or to challenge the dispute. Note that in this case you are strongly advised to provide evidence and there is no guarantee that you will win the dispute. A dispute being raised will result in a chargeback or funds being reversed from your merchant account.

Note that there are strict timelines with regards to disputes that you will need to adhere to. 

General Statement on Disputes and Chargebacks

At Airwallex we know that disputed transactions and chargebacks are a risk to your business and can be a time consuming exercise to manage. Subsequently, we have implemented several mechanisms to assist you in preventing and managing disputes and chargebacks.

Dispute Management Dashboard

To assist you with timely and effective dispute management, Airwallex has created the ‘Dispute Management Dashboard’ which you can view in the webapp - see ‘Payment Acceptance Section’. 

There are two tabs. 

  1. Response Queue: This is where you can see all disputes awaiting action. Note that there is an expiry date which needs to be adhered to. It is sorted for you by expiry date to help you prioritise disputes. Note that you have several options View Details, Accept Dispute, Submit Evidence.
  2. All Disputes: This allows you to see all dispute history including those which are won, lost and need a response. You can also see what stage a dispute is at. 

What are the stages of a dispute? 

There are a number of stages that a dispute will go through as listed below: 

  1. Dispute Raised by Cardholder: A cardholder will dispute a transaction with you as the merchant through their bank (the issuing bank). 
  2. Merchant Decision: This is the stage that you as the merchant can decide to either accept or defend the dispute. 
    1. Accept the Dispute: You accept the dispute. 
    2. Defend the Dispute: In this case, click the ‘submit evidence’ button and choose the dispute reason and ‘type of product’. Though it is optional, it is highly recommended that you submit evidence. Examples of evidence are provided in the next section. It is important to note that once you submit the evidence, it is not possible to change evidence. This will change the status of the dispute to ‘Under Review’
  3. Dispute Challenge Process: If you have chosen to challenge the dispute, a review will be conducted by the issuing bank. The case will be closed either in your favour as the merchant or the issuer may require more evidence. 
  4. Arbitration: This is where the scheme will review the transaction and make a ruling. 

It is important to note that it can be expensive to challenge a chargeback. The following is where you can be charged. See ‘Are there fees associated with disputes?’ for more information.

What evidence do I need to submit for a dispute? 

It is optional, however strongly encouraged for you as a merchant to submit evidence if you challenge a disputed transaction from a cardholder. Some of the evidence you may choose to submit include: 

  1. Proof of Delivery
  2. Description of Goods or Services
  3. Invoice/receipt
  4. Customer Communication
  5. Proof Showing Distinct Payments

How do I calculate my chargeback ratio?

Chargeback ratio is often defined as the number of chargeback requests, divided by the number of successfully captured intents over a given time period.

To calculate your chargeback ratio you will need to calculate:

  1. 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
  2. The number of chargebacks - you can calculate this number by exporting your dispute activity under ‘Disputes’ > ‘All disputes’ into a report and filter for disputes in “Dispute” or “Arbitration” stage

Please note:

  • It may take up to 30 days for a cardholder to challenge a transaction before it will show as a ‘disputed’ payment
  • 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 empowers our customers to review your dispute history. To do this, ‘Dispute Management Dashboard’ which you can view in the Webapp - see ‘Payment Acceptance Section’ and navigate to ‘All Disputes’.

From here you can view your dispute history and filter based on certain criteria. We also enable you to export disputes from Airboard. 

How Can I Reduce Disputes/Chargebacks?

There are several ways that you reduce the number of disputes: 

  1. Integrate Airwallex with external dispute resolution tools like Visa’s Rapid Dispute Resolution (RDR) to resolve disputes with automated dispute resolution rules before they become chargebacks.
  2. Respond to all RFIs in a timely manner as these may turn into disputes.
  3. Help customers recognise their transactions by using the descriptor field to remind them of the goods or services they have purchased.
  4. If you are refunding a transaction to prevent a potential dispute, we recommend you to use Airwallex’s refund process which ensures that funds are refunded to the same card or payment method used for the original payment.
  5. Respond to all disputes within the requisite time frame (you can do this through ‘Dispute Management Dashboard’ which you can view in the Airwallex WebApp - see ‘Payment Acceptance Section’).
  6. Ensure that your customers were presented with a full copy of policies/terms and conditions prior to customer purchase.
  7. Use the risk management settings to minimise fraudulent transactions. Using the ‘View Details’ on the ‘Dispute Management Dashboard’ you can also see the geolocation of the device, billing and shipping address to help you determine if a dispute is likely to be fraud.

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: