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Learn what a dispute is and how to handle it.

If you are new to online credit card payments, please read about transactions before continuing.

If you are a developer, see our documentation on disputes.

A cardholder can dispute a transaction for up to 14 months after it was captured through the bank that issued the card (issuing bank). The issuing bank has a formal process where they:

  1. ask the cardholder for the reason of the dispute
  2. investigate if the cardholder's claim is legitimate.

Since the cardholder is a customer at the issuing bank, the latter tends to give the cardholder the benefit of the doubt to make sure their customer is happy.

If the cardholder is simply in doubt about what the transaction covers the issuing bank will sometimes first file a retrieval request to get documentation (e.g. a receipt) for the transaction. Most often, though, they will initiate a chargeback (refund of the transaction) right away.

When you receive a dispute, the transaction amount will be added to your account reserve. You can then:

  1. respond to the dispute and prove that the transaction was valid and that the cardholder is not eligible for a refund (learn how to respond to disputes here)
  2. accept the dispute and agree to the cardholder's claim.

No matter what type of dispute you receive you should always contact your customer to understand the situation and try to resolve it. You can even ask the customer to tell the bank to cancel the dispute in the case of a misunderstanding. If they do so, you still have to respond formally to the dispute as described below (if you do not respond, you will lose the dispute).

In the case you win the dispute, the transaction amount will be released from your account reserve to your available balance.


A chargeback reverses a transaction and refunds the transaction to the cardholder. There are many chargeback reasons. The most common ones are:

  • Fraud
  • The cardholder claims not to recognise the transaction
  • The card used was lost or stolen
  • Product or service problem. The cardholder claims:
  • the service or goods has not been delivered
  • to have asked for a refund, but did not receive one
  • the good or service was not as described (e.g. broken)
  • the wrong amount was charged
  • the subscription was cancelled
  • the amount was charged twice

Challenging a chargeback

In most cases, you can challenge a chargeback by submitting proof that the cardholder is, in fact, your customer and that you have delivered the goods or services in the quality and delivery time that was agreed.

Sometimes the case is clear, and you can see that the transaction was fraudulent. In this case, there is nothing to do but to accept the chargeback.

When challenging a chargeback, the response must include:

  • your argumentation for why the chargeback is illegitimate
  • proof (compelling evidence) that you have delivered the goods or services.

When you receive your first chargeback, the Paylike team will reach out to you and help you create the response to challenge the chargeback (representment). Depending on the chargeback reason code, different types of proof are considered compelling evidence.

Once you have submitted your representment, the issuing bank has 50 days to either accept or decline your representment.

Winning a chargeback

You win the chargeback if the issuing bank does not decline your representment within the 50 day period. When winning the chargeback, the transaction amount is released from your account reserve.

Losing a chargeback

In the case that the issuing bank does not accept your proof, the chargeback is lost, and the transaction amount will be returned to the cardholder and deducted from your account.

If you are absolutely certain that the cardholder is your customer and that you have delivered the goods or services as agreed, you have the option to challenge the chargeback a second time in Visa and Mastercard's Arbitration. Contact us if that is the case.

Retrieval requests

An issuing bank can make a retrieval request to get documentation (compelling evidence) for a transaction. Most often an issuing bank will make a retrieval request when a cardholder can not recognise a transaction.

If you do not respond to a retrieval request, the issuing bank will in most cases initiate a chargeback (refund of the transaction).

Responding to a retrieval request

The response to a retrieval request is the same as when you respond to a chargeback. You must prove to the issuing bank that you have delivered the goods or services in the quality and delivery time that was agreed.

We always recommend that you respond to retrieval requests to stay compliant with the Visa and Mastercard rules and avoid chargebacks.

The transaction you received a retrieval request for has a high risk of turning into a chargeback. Therefore the transaction amount is added to your reserve to cover a potential chargeback.

If the issuing bank does not initiate a chargeback within 50 days of your reply to the retrieval request, the transaction amount is released from your reserve.

Further reading

Chargebacks and retrieval requests can be a complex area, but luckily most ordinary merchants will never receive one. You are always welcome to contact us for more information and help about a chargeback case. Below you can find the official guidelines from Visa and Mastercard on chargebacks and their general merchant rules.