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What is a Chargeback?

Chargeback refers to a situation whereby a customer disputes a credit card transaction and tries to get their money refunded. In this case, the customer is able to request a chargeback directly to the issuing bank rather than to the merchant, and is still able to raise chargeback 6 months after purchase.

What can cause a chargeback?

The circumstances usually involves identity theft, unauthorized transaction, or fraud. Chart below provides typical scenarios for a chargeback and describes the process in dispute of a chargeback:

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The merchant needs to contact the customer, and clarify regarding the chargeback reason, which can be either:

  1. Buyer does not recognise Xendit in their Bank Settlement Report
  2. Buyer does not want to use the Product
  3. The product does not meet the expectations of the buyer
  4. Buyer is not happy with the service of the merhant

When a customer raises a chargeback to the bank, Xendit will get a notification from the acquiring bank about the chargeback. And we'll let you know about the chargeback details.

Chargeback Prevention Methods

Chargebacks are a pain point when having credit cards as a payment option. There will always be some users who do not pay attention to their transaction details when checking out, and ends up submitting chargeback.

Here’s how you can prevent this from happening:

  • Make sure customers are aware of their billing details: name of charge source, amount, and date before they proceed to charge the card.

  • Respond to customers’ inquiries ASAP

  • Have a clear return - refund policy in your Terms and Conditions

  • While it might reduce customer experience, having 3DS authentication enabled before charging gives you more protection from chargeback liability.

Chargeback Timeline

A Cardholder can issue chargeback until H+120 from the date of transactions.

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  • Retrieval Stage : H+30 start from Acquirer receive the chargeback case, inform Xendit, and until submit the evidence to Issuer.
  • Chargeback Stage : H+30 start from Acquirer receive the news of Retrieval Stage, inform Xendit, and until submit the evidence to Issuer.
  • Arbitrage Stage : H+30 start from Acquirer receive the news of Chargeback Stage, inform Xendit, and until submit the evidence to Issuer.

How to Fight Chargebacks

So, you've received a chargeback, what can you do about it? There are three possible actions that you can do:

Provide Chargeback Evidence

When determining a judgement for a chargeback, transparency will prevent you from losing. Transparency means that you have recorded and maintained all interactions with the user, details of the transaction, and anything that will confirm that the user acknowledged/aware of the product that they were purchasing.

  1. Screenshot of the Account that the cardholder used
  2. Screenshot of the invoice of product that the cardholder bought + screenshot of the product
  3. Screenshot of Payment Detail (with masked card number, name, email, phone number, shipping address, etc.)
  4. Screenshot of the Invoice / Payment reference from Xendit (external ID/ order ID) with reference detail from merchant database (needs to be matched)
  5. Screenshot of shipping proof
  6. Screenshot that the cardholder has received the product
  7. Screenshot that the cardholder has used the product

The evidence can be sent to The more relevant evidence that you can send, the more you are likely to win the chargeback. If Xendit does not have enough evidence that can support a successful reversal of the chargeback, we will request additional documentation. Certain period of time will be given (depends on the issuing bank) to submit all documentation to us.

Request Chargeback Cancellation

If you've communicated with the user, and they've agreed to cancel their chargeback, we'll need to submit a report to the bank, Xendit will need to have the following information:

  1. Full Name
  2. Date of Transaction
  3. Amount of transaction
  4. Reason of chargeback cancellation
  5. A scanned identity (KTP)
  6. A scanned front side of the credit card
  7. Confirmation that the user have informed the issuing bank about the chargeback cancellation.

Kindly download the form in the following link, and provide it to the user. For the purpose of information privacy of the cardholder, please direct the customer to send it to

We'll use the information as the evidence for the bank to cancel the chargeback.

Lose the Chargeback

This is the least favorable outcome, and we'd like to avoid this if possible. But here's what might cause you to lose a chargeback:

  1. Not enough evidence

    The acquiring bank considers there are not enough valid evidence of transactions.

  2. No authentication process using 3ds.

    Certain acquiring banks require this step as a way to hold a merchant liable for chargeback. If you're skipping 3ds with Xendit, make sure you have all the other supporting evidences.

If the acquiring bank deems that the supporting evidence to be not enough, Xendit will be informed, there will be additional time to gather more evidence.


What's arbitration and how to fight it? After two steps of evidence verification from the bank, there is a possibility where the bank is not decline the evidence provided to be enough. If so, the issuing bank can then raise the chargeback to arbitration. Xendit will be informed about the arbitration step, and you'll need to make the decision whether you want to challenge the arbitration or not. If you are, then we'll require to collect further evidence, send it to the acquiring bank, then the issuing bank. If you win, you'll win the chargeback. However if you lose, you'll have to pay for the chargeback and the arbitration fees ($500).

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Fraudulent Cases

How do you know if you're facing fraud cases? There's several types of fraud that you might encounter in cards transaction. Below are the types of fraud that are documented (so far).

  1. Merchant Fraud

    • If you're e-commerce that onboards merchants/sellers, please be aware the potential of merchants who abuses promo/cashback/points by buying back their own goods
    • Certain cases might occur where staffs take hold your system system, and making fake purchases for their own benefit
  2. Buyer's Fraud

    • Marketplace refund policy, where you don't have a clear refund policy in the terms and conditions, and buyers abuse this buy raising a chargeback. Especially if your product are digital goods/services where the product is intangible.
    • Identity fraud -> people who steal the credit card information from another person, and makes the purchase under their name, with a different address than their registered address.
    • Friendly Chargebacks -> people who are aware of how online transactions work, and abuse merchants that do not have 3ds authentication by requesting chargebacks and claiming they are not aware of the transactions.