Disputes, Chargebacks, Refund and Profitability

Question 1

What is a dispute in the context of card transactions?

Answer 1

When a cardholder complains about a charge, usually because of a mistake, fraud, or not being happy with what they bought. They ask the bank to take the charge off their bank.

Question 2

When a cardholder makes a purchase but later claims it was unauthorized or that they didn’t receive the item, even though they actually did. It’s a type of fraud where the person making the claim is the one who made the purchase.

Answer 2

Friendly Fraud

Question 3

A customer initiated dispute which the customer does with the issuer bank.

Answer 3

Chargeback

Question 4

A customer initiated dispute which a customer does directly with the merchant.

Answer 4

Refund

Question 5

A fee paid by the merchant’s bank (acquirer) to the Cardholder’s bank (issuer) for processing a credit or debit card transaction. This fee helps cover the cost of handling and securing the transaction.

Answer 5

Interchange

Question 6

Are transactions that need special handling because of issues like insufficient funds, disputes, processing errors, authorization declines, or fraud alerts.

Answer 6

Payment Exceptions