Credit Chargebacks
Credit Chargebacks
PayCredit applies the financial treatment associated with chargebacks across the credit lifecycle. When a cardholder disputes a transaction, PayCredit processes the applicable credit account adjustments based on the transaction's lifecycle stage, the programme configuration and the final dispute outcome.
PayCredit is not a dispute management system. Dispute investigation and scheme processing are managed by the client, a third-party provider or Paymentology's Disputes & Chargebacks operations.
PayCredit is responsible for applying the relevant financial treatment to the credit account, including principal, interest, eligible fees, available credit, statement obligations and delinquency calculations where applicable.
How chargeback processing works
- Identify the disputed transaction. Match the chargeback to the original transaction using the supported scheme or client integration process.
- Determine the financial treatment. PayCredit evaluates the transaction's lifecycle stage and the configured Direct Chargeback Credit setting.
- Apply provisional credit where configured. Eligible settled disputes may receive provisional financial relief while the dispute remains open.
- Record the final outcome. The dispute is resolved in the customer's favour, the merchant's favour or partially in the customer's favour.
- Apply final financial adjustments. PayCredit calculates and posts the applicable principal, interest, fee and account balance adjustments.
- Reconcile the results. Validate the customer account position and associated ledger adjustments.
Chargeback operating models
PayCredit supports two operating models:
| Operating model | Responsibility |
|---|---|
| Client or third-party managed | The client or third-party system manages dispute investigation and provides the required dispute information and final outcome through supported processes. |
| Paymentology-managed | Paymentology Disputes & Chargebacks manages the operational dispute process, while PayCredit applies the financial treatment. |
In both models, PayCredit is responsible for financial calculations and credit ledger adjustments.
Provisional credit
The Direct Chargeback Credit configuration determines whether eligible settled disputes receive provisional financial relief before the final outcome.
| Configuration | Behaviour |
|---|---|
| Y: Enabled | Eligible settled disputes receive provisional credit. Applicable interest and delinquency treatment are adjusted while the dispute remains open. |
| N: Disabled | No provisional credit is applied. Financial adjustment waits for final resolution, and interest continues according to programme rules. |
Contact your implementation manager to confirm the configuration for your programme.
Chargebacks across the credit lifecycle
The financial impact of a chargeback depends on when the original transaction is disputed.
PayCredit distinguishes between:
- Pre-settlement / authorisation: An active hold exists, but no settled receivable has been created.
- Post-settlement / pre-statement: A settled transaction exists but has not yet been billed.
- Post-statement / unpaid: The transaction forms part of a billed obligation that remains unpaid.
- Post-statement / paid: The transaction has already been paid and may result in a credit balance, refund position or future-cycle offset.
- Instalment plan: Chargeback treatment depends on the configured instalment capability.
For billed and unpaid transactions, chargeback processing can affect the remaining payment obligation and applicable delinquency calculations. It does not automatically clear all delinquency.
Implement chargebacks
Follow these guides to configure, integrate and validate chargeback processing for your programme.
| Guide | What you will achieve |
|---|---|
| Configure Chargebacks | Choose the operating model, configure provisional credit and complete go-live checks. |
| Integrate Chargeback Processing | Understand Mastercard and Visa dispute intake, transaction matching and required integration data. |
| Apply Chargeback Outcomes | Apply customer-win, merchant-win and partial-win financial treatment. |
| Understand Credit Lifecycle Impact | Understand how chargebacks affect balances, statements, interest, available credit and delinquency at each lifecycle stage. |
| Validate Adjustments and Resolve Exceptions | Reconcile financial adjustments and handle unmatched transactions, unsupported scenarios and processing exceptions. |
Important implementation considerations
- Final dispute outcomes must be recorded through the supported operating process.
- Chargeback financial treatment depends on the transaction lifecycle stage and programme configuration.
- Historical statements and closed ledger periods are not rewritten. Retrospective adjustments are posted in the current active period.
- Instalment-plan chargeback treatment is dependent on the configured capability.
- Rewards and cashback adjustments are only applicable where the required programme capability is configured.
Confirm supported integrations, required data fields and programme-specific financial treatment with your implementation team before go-live.
Updated 1 day ago