Chargeback is a consumer protection mechanism allowing customers to dispute transactions directly with their bank, resulting in a reversal of funds.
Why Chargebacks Exist?: Chargebacks play a pivotal role in maintaining trust and safety in financial transactions..
Consumer Protection: They safeguard consumers from fraud, errors, or unauthorized transactions, providing a safety net for buyers.
Merchant Impact:
a) Financial Impact: Chargebacks pose significant financial challenges for merchants, leading to revenue loss due to reversed transactions and additional chargeback fees.
b) Operational Challenges: They create administrative burdens, necessitating resources and time to handle disputes, impacting daily operations.
Wider Financial Ecosystem:
a) Industry Implications: Chargebacks affect the broader financial ecosystem, influencing consumer confidence, merchant trust, and overall financial stability.
b. Collateral Effects: High chargeback rates can lead to increased scrutiny from payment processors and card networks, potentially impacting a merchant’s ability to transact