Chargeback

When a Chargeback occurs, a credit card transaction is reversed (Reversal): a customer has ordered the card issuing bank to credit back to the card the value of the purchases made. The issuer, then, in turn, bills the payment provider (acquiring bank), where the cost of the chargeback is borne ultimately by the merchant.

Chargebacks occur in case of unauthorized activity on a given card or when the customer is dissatisfied with product or service obtained. Chargebacks may also arise from technical deficiencies – duplicate purchases, failure to credit back accounts for product returns/ cancellations and unapproved authorizations by the merchant bank.