Glossary
Chargeback
A chargeback is the forced reversal of a card payment initiated by the cardholder through the issuer: the issuer takes the money back from the acquirer, the acquirer from the merchant, and the merchant may contest it with evidence through representment. Chargebacks exist only for card payments; bank transfers, instant payments and Open Banking have refunds but no dispute mechanism of this kind. The schemes watch each merchant's chargeback ratio and fine or terminate those above the thresholds.
The lifecycle
The cardholder disputes a transaction; the issuer files the chargeback with a reason code, such as fraud, goods not received or a duplicate; the acquirer debits the merchant and passes the case on; the merchant accepts or contests with evidence; the issuer accepts the evidence or the case goes to arbitration. Timelines run from weeks to months, and the fee is charged whatever the outcome.
Why the ratio matters
Visa and Mastercard run monitoring programmes: a merchant whose chargebacks exceed a share of its transactions in a month enters a programme with fines and, if it stays there, loses its acquiring. High-risk verticals live close to the thresholds, which is why they rely on instant bank methods without chargebacks and on routing that keeps risky traffic where the contract allows it.
On the platform
Tranzify records disputes reported by the acquirers against the payments, debits the merchant’s balance in the ledger, holds a rolling reserve where the client sets one, and shows chargebacks per terminal and merchant in the reports, so a client moves traffic before a programme is triggered.
Updated: 2026-11-08