Understanding Mastercard Chargebacks with PbN Payments

When a chargeback occurs, your practice must act promptly and follow the proper steps to resolve the dispute in your favor. Below is an overview of the MasterCard Dispute Process and the actions required at each stage.

1. Notification of Chargeback (NoC)

• What Happens: You will receive a notification that a chargeback has been initiated.
• Action Required: Prepare and submit defense documents to contest the chargeback, or accept the dispute.
• Key Point: The chargeback amount is usually debited from your account a few days after receiving the NoC.

2. First Chargeback

• What Happens: The disputed amount is withdrawn from your account.
• Action Required: Upload defense documents within 40 days, or accept the chargeback.
• Key Point: This is the final step if you either accept the chargeback or fail to upload defense documents within the specified time.

3. Information Supplied

• What Happens: PbN forwards your defense documents to MasterCard.
• Key Point: Once the documents have been submitted, no further modifications can be made.

4. Chargeback Reversed

• What Happens: The disputed amount is temporarily credited back to your account while the issuer reviews your defense.
• Key Point: If the issuer accepts your defense, the chargeback is resolved in your favor at this stage.

5. Pre-Arbitration

• What Happens: If the issuer rejects your defense, a second chargeback will be initiated, and the issuer will file a Pre-Arbitration case within 45 days of the defense submission date.
• Key Point: There is no option to escalate the case to arbitration after this stage.

6. Pre-Arbitration Outcome

• Pre-Arbitration Won: If your defense is accepted by the issuer, the chargeback is resolved in your favor.
• Pre-Arbitration Lost: If your defense is rejected, a second chargeback is processed, and there is no further option for arbitration.

7. Second Chargeback

• What Happens: A second chargeback is finalized if your defense is declined.
• Key Point: This marks the conclusion of the dispute process, with no further recourse through MasterCard.

Submitting Defense Documents: File Formats and Requirements

Ensure your documents meet the following guidelines to prevent delays in processing your defense:

• File Formats:
  • JPG and TIFF (Max size: 10 MB per file)
  • PDF (Max size: 2 MB per file)
• Specific Requirements:
  • For MasterCard disputes, defense documents can contain a maximum of 19 pages.

Essential Documents for a Strong Dispute Defense

Depending on the reason for the chargeback, ensure you submit the following documentation:

General

• Copy of the invoice
• Description of goods/services provided
• Proof that any credits or reversals were not addressed by the issuer
• Evidence that the cardholder used the service and did not cancel in compliance with your policies
• Screenshots of terms and conditions the cardholder agreed to at purchase

Already Paid

• Proof that the cardholder has not yet paid you
• Confirmation of any refunds issued directly to the cardholder
• Email communication or agreements stating the payment status

Canceled Services

• Proof that the cardholder was informed of your cancellation policy and agreed to it at the time of purchase
• Evidence that services were used between the billing and cancellation dates
• Documentation showing a request for cancellation at a different date and that services were provided until then
• Proof that the cardholder did not contact you to resolve the issue (e.g., email or phone logs)

Canceled Transaction

• Invoice and description of services rendered
• Confirmation email sent to the cardholder
• Documentation proving the service was provided (e.g., email or invoice)
• Dates showing when the cardholder began using the service
• Record of previous, non-disputed payments
• Verification details like CVV/CVC check, IP address, or device ID linked to the cardholder’s billing information

Canceled Recurring Transaction

• Proof that the cardholder agreed to your cancellation or return policy at purchase
• Evidence that services were used between the billing and cancellation dates
• Documentation showing that the cardholder requested cancellation for a different date
• Proof that the cardholder remained interested in the service
• Records proving the cardholder did not attempt to resolve the issue