Understanding Disputes
What is a dispute?
Dispute is a forceful reversal of payments requested by the account owner/cardholder and occurs when an account owner/cardholder questions a transaction with their issuing financial institution (issuer) and requests their money back. When this request is raised, an investigation will start for the said transaction. The disputed transaction amount will be held while the investigation is ongoing. Not every payment channels has a dispute flow; you can follow the Dispute Guidelines section for a detailed explanation.
Dispute vs Chargeback
The terms "dispute" and "chargeback" are often used interchangeably, typically a chargeback specifically refers to the process of returning funds to an account owner/cardholder after a successful dispute.
Refund vs Dispute
Understanding the difference between a refund and a dispute is essential for your operations:
Who initiates: Refunds are initiated by you (the merchant) directly to the account owner/cardholder. Disputes are initiated by the account owner/cardholder through their issuer up to 540 days post transaction
Processing time: Refunds typically take 14 business days (depending on the issuer). Disputes processing time can take between 30-180 days or more
Associated fees: Refunds have no additional fees. Disputes can incur some cost.
Impact: Refunds are a normal part of business. Disputes can affect your dispute-to-sales ratio and may result in enrollment in applicable monitoring programs.
Dispute Lifecycle and Timeframe
Stage | Cards | QRIS |
|---|---|---|
Dispute raised This is a deadline for an account owner/cardholder (through the issuer) to submit a dispute | 120 calendar days from transaction date up to 540 calendar days from transaction date (for non-fraud reason code) | 90 calendar days from the transaction date |
Re-presentment This is a deadline for you, the Merchant (through Xendit), to submit the evidence to fight the dispute | 7 calendar days from the 1st dispute notification Note: Failing to respond within this 7-days window typically results in an automatic loss of the dispute. | Typically 7 calendar days from 1st dispute notification or as stated on the email notification Note: Failing to respond within this 7-days / due date window typically results in an automatic loss of the dispute. |
Dispute Review & Decision (2nd Chargeback) This is a deadline for the Issuer to reject the evidence provided by the Merchant (through Xendit) | 30 up to 45 calendar days after the representment date | 7 calendar days after the representment date |
Arbitration This is a deadline for you the Merchant (through Xendit) to re-challenge the Issuer at their discretion | 7 calendar days from 2nd Chargeback notification / re-presentment outcome Note: Additional fee of USD 500 up to USD 600 applies on top of the disputed amount for the losing party | 5 calendar days from 2nd Chargeback notification / re-presentment outcome Note: Additional fee of IDR 500,000 applies on top of the disputed amount for the losing party. Eligibility for this stage applies to transactions starting from IDR 500,000 and above |
Cards dispute lifecycle and timeline
Cards dispute lifecycle
QRIS dispute lifecycle and timeline
QRIS dispute lifecycle
When an account owner/cardholder disputes a charge to their issuing financial institution (issuer), Xendit will:
Send you an email containing the information about the incoming dispute
The reason of the dispute will be shown, and you will be able to submit the evidence to fight the dispute by replying to the same email before the due date
Hold the disputed amount from your Xendit Balance as the payment network will pull funds for the disputed amount (hold will be temporary if you win the dispute)*
* for QRIS, deduction will be made in bulk once the dispute is lost