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This feature is available in the United States, Canada, and the United Kingdom.
As an embedded payments partner, you can mitigate risk as well as quickly respond to any disputes that arise. Proactive measures can be taken such as enacting processing limits during merchant onboarding or by monitoring the transaction activity of your merchants using our API.
In this overview, we cover the most common scenarios of handling processing limits for your merchants as well as explain the fundamentals of the merchant dispute process and what to expect when it happens.
The following integration options are available for this solution:
Processing limits are a risk protection for you and your merchants against fraud. Limits define the maximum transaction volume a merchant can process in a single transaction or within a calendar month. Merchants are assigned default limits as part of their merchant profile.
As a partner, you negotiate appropriate default limits for your merchants as part of the onboarding process. In most cases, we configure your merchants to default to “soft” limits — that is, if a merchant exceeds their monthly processing limit, they can continue accepting transactions, but funding may be delayed.
Some of your larger merchants will likely require custom limits. To request a limit increase for them, you may need to submit additional documentation. These processes ensure that merchants maintain compliance while scaling their payment-processing capabilities. Limits are a protection tool. If a merchant exceeds their limits, you should review their processing. If valid, you should submit a request for better limits to enable more processing and business.
For the best merchant experience, we recommend gathering accurate information at merchant boarding and monitoring your merchants’ processing throughout the month to proactively increase limits before funding is impacted. This section explains how to best handle the most common scenarios when it comes to handling processing limits.
Scenario 1: You know a newly onboarded merchant will need custom limits:
Scenario 2: You’ve been monitoring your merchant’s processing activity, and although they haven’t exceeded their limit yet, you expect them to soon.
Scenario 3: Your merchant had an unexpected spike in activity and has already exceeded their processing limits.
A dispute (also known as a chargeback) occurs when a transaction’s validity is questioned. It can be raised by the cardholder or the card issuer. In either scenario, the issuer sends the dispute to the acquirer to resolve.
With our API, we make it easy for you to manage disputes automatically. As a partner, you have the ability to get a list of disputes raised against any of your merchants at any time.
When a dispute is received, the disputed amount is debited from the merchant’s Funds Management Account (FMA) balance. If the transaction is later determined to be legitimate, the transaction balance will be restored to the merchant.
If the merchant wants to challenge the dispute, they can provide evidence that the transaction is legitimate. We review the evidence to ensure it meets the necessary association regulations and requirements before sending it to the issuer. The issuer then reviews the evidence provided and makes a decision on the outcome of the dispute. The cardholder and the merchant are then notified of the case decision.
To help you understand the dispute process a little more, we’ve put together this table to explain the most important terms you need to know.
| Dispute Term | Description |
|---|---|
| Retrieval | A request for proof that a transaction was valid (also known as an inquiry), such as requiring a copy of the sales receipt/draft. Funds are not exchanged during a retrieval request, but if the merchant doesn’t respond in a timely manner, they could be liable for a chargeback case. For example, the card brands Amex and Discover might process a “non-response” chargeback, which could mean no further recourse/reversal rights, unless full credit was issued. |
| Chargeback | When the cardholder or issuer is formally disputing a transaction. When a chargeback case is initiated, the disputed funds are usually transferred from the merchant’s account to the issuer. With a chargeback, you can: – Acknowledge it – Challenge it with supporting documentation (contact your account manager to confirm region-specific documentation requirements) |
| Pre-Arbitration / Arbitration | The final stage of the dispute process. In pre-arbitration, we work directly with the card issuer to try to resolve the dispute, helping the merchant provide further evidence if needed. A lost arbitration case could result in added fees, time lost, and potential penalties for the merchant, so it’s best to avoid this stage as much as possible. |
| Compliance / Pre-Compliance | A type of case brought against a merchant for violating the rules of a card brand. For example: – Billing a cardholder for damages inappropriately – Providing inaccurate clearing data for a transaction – Ignoring a retrieval request issued for legal proceedings or law enforcement investigations |
| Good Faith Collection | A request for a merchant to accept liability for a case on a good faith basis, even though the final deadline for resolving the case has passed. Acceptance of this request is completely at the merchant’s discretion. |
To get familiar with the tools to manage risk, follow the steps in these guides.