Transaction Dispute Management Glossary of Terms
Collection of terms from a real-world example of a concert ticket purchase to equip you with the vocabulary to navigate Transaction Dispute Management.
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- Cardholder
- The customer who holds the debit or credit card that’s used for purchasing the concert ticket.
- Transaction
- The initial purchase of the concert ticket. A transaction involves the movement of funds from the cardholder's account to the merchant's account.
- Merchant
- The business that accepts your customer's payment for the concert ticket. The business is the seller in the transaction.
- Transaction Enrichment
- The process of adding details or context to a transaction to improve dispute resolution. The details can include information about the merchant's location, business category, and so on.
- Dispute
- A disagreement between the cardholder and the merchant regarding a transaction. For example, your customer can claim they never received the ticket after the purchase.
- Dispute Item
- The specific details of the disputed transaction. The transaction includes details, such as date, amount, merchant name, and a description.
- Dispute Deflection
- Rules that you can set up to resolve transaction disputes without any further investigations.
- Reason Code
- A specific code assigned to the dispute that categorizes the reason for the disagreement. Payment networks often standardize these codes.
- Chargeback
- A process that begins when a cardholder disputes a transaction and requests a refund. The card issuer investigates the dispute in collaboration with the payment network, for example, Mastercard. Based on the outcome, the issuer reverses the transaction and return the funds from the merchant's account to the cardholder.
- Issuer
- The bank that issued the cardholder's debit or credit card (your bank, in this example).
- Acquirer
- The bank that processes payments for the merchant (the concert ticket seller’s bank).
- Merchant Alert
- A notification that's sent through the Ethoca Collaboration network to the merchant, informing them of the cardholder's dispute. After the merchant receives the notification, they can investigate and potentially resolve the issue directly with the customer.
- Provisional Credit
- A temporary credit that the card issuer provides to the cardholder's account while they investigate the dispute. This credit doesn't guarantee a permanent refund.
- Second Presentment
- A process where the merchant challenges the chargeback and provides evidence to support their case. The issuer reviews the merchant's response and investigates the claim. If the merchant's evidence is sufficient, the issuer can recollect the disputed amount from the cardholder.
- Pre-arbitration
- The final opportunity for the issuer and merchant to settle the dispute without involving an arbitrator. In this step, the issuer can respond to the merchant after reviewing the documentation submitted as part of the merchant’s second presentment response.
- Dispute Case Owner
- The individual within your bank responsible for managing a specific dispute case.
- Payment Network
- The network that facilitates electronic payments. For example, Visa or Mastercard. These networks provide rules and regulations for dispute resolution.
- Dispute Outcome
- The final resolution of the dispute. Either the customer wins and receives the chargeback, or the merchant wins and retains the funds.
- Chargeback Queue
- A holding area for transactions that customers dispute. This queue holds all incoming chargebacks until a dispute case owner reviews them. Different queues exist based on the stage of the dispute process.
- Assessment
- The set of questions asked to the cardholder during the dispute intake process. This questionnaire helps gather the necessary facts to determine if the dispute is valid and which reason code and reason subcode applies.
- Write-off
- A business decision wherein the bank decides to refund the customer and absorb the loss rather than processing a chargeback. A bank takes this decision when the transaction amount is too low to justify the operational cost of processing the dispute.
- Mastercom
- The dispute resolution platform provided by Mastercard. Transaction Dispute Management integrates with Mastercom to exchange documents and status updates for chargebacks.
- Arbitration
- If the issuer and acquirer can’t agree, arbitration represents the final stage of a dispute. The payment network acts as the judge, reviewing the evidence from both parties to make a final, binding decision.
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