There can be many benefits to your business when you accept payments by card. The payment process is faster, it is convenient for your customers, and you spend less time and expense counting, sorting and transporting cash.
If you already accept card payment transactions, we understand there is one area that can sometimes cause our customers confusion – chargebacks.
A chargeback occurs when the cardholder (or their bank/financial institution) raises a dispute in connection with a card transaction. From time to time, you may receive notifications of a chargeback request.
The below information will help you understand more about chargebacks and how disputes are resolved, as well as what you can do to reduce chargebacks.
WHAT YOU NEED TO KNOW ABOUT CHARGEBACKS
What is a chargeback?
If a cardholder sees a transaction on their credit card that they don’t believe they have made, or if the customer was charged the incorrect amount, they can dispute that transaction with their bank or financial institution.
How the chargeback process works:
- A dispute is raised by the cardholder or the cardholder’s bank against a NAB merchant
- NAB receives the chargeback notification, and notifies you, the merchant, via email, letter or secure channel
- If you, the merchant, disagree with the dispute claim, you can respond to NAB
- If you, the merchant, are found to be liable for the dispute, then the transaction amount will be debited from your settlement account and a chargeback fee will apply
What does ‘chargeback liability’ mean?
Visa and MasterCard rules request that a PIN or ‘signature’ (signed card imprint) be obtained during a transaction, except for some transactions performed by tapping a card near a contactless card reader.
For eCommerce transactions, standard security measures in identifying cardholders (such as chip cards) are not available and therefore not as secure. The liability of accepting these transactions rests with the merchant.
Common chargeback reasons and how long merchants have to respond
You will always be provided with the opportunity to respond to a dispute that has been raised against your business.