chargeback
A chargeback is the reversal of a card payment by the cardholder's bank under card scheme rules, after the cardholder disputes the transaction. The acquirer debits the business, which can contest the chargeback by submitting evidence. It is a scheme process, not a legal judgment.
When a cardholder tells their bank that a payment was not authorised, that goods did not arrive or that a subscription was cancelled, the bank can raise a chargeback under Visa's or Mastercard's rules. The acquirer takes the amount from the business, usually with a fee, and the business has a fixed window to respond with evidence: a signed delivery, a log of the customer using the service, proof that 3-D Secure authenticated the payment. The schemes decide. Chargebacks are a scheme procedure; they do not settle who was legally in the right, and they sit alongside statutory protections such as section 75 of the Consumer Credit Act on credit card purchases.
Why it matters: chargebacks cost more than the refund. There is a fee, the time to respond, and the ratio. An acquirer watches the share of a business's payments that end in chargebacks, and a ratio above the schemes' thresholds brings monitoring programmes, fines and, eventually, termination.
For a software platform, the record that wins a chargeback usually already exists inside the product: the booking, the login, the delivery note. Surfacing it in the dispute response is one of the quieter payment products that keeps customers on built-in payments. On a split payment, decide before launch who bears a chargeback and whether the platform's fee is clawed back.