The entire chargeback lifecycle, from filing to resolution, can often take weeks or even months. Here are the phases involved in a chargeback and what each phase encompasses:

1. Substantiation

This is the initial chargeback stage. This means that the chargeback amount is debited from the merchant's account and returned to the cardholder's account.

The time limit to respond begins once the merchant has received the chargeback notification. PagueloFacil gives 5 business days for the merchant to respond and provide all available evidence and information about the disputed transaction.

PagueloFacil receives the information and in case the information provided is enough to support the claim, the representation will start.

2. Representation

It is the phase in which PagueloFacil must create a response document, and which will depend on the reason code linked to the dispute.

All the response documents must include evidence of the merchant's payment gateway (detail of the transaction provided by PagueloFacil), tracking of the transport service for delivery (if applicable). Other than additional evidence, such as support tickets, screenshots, conversation threads (preferably by mail) and / or publications in social networks.

3. Pre-arbitration

This is when the issuing bank indicates that the evidence presented by the merchant is not sufficient to support the transaction. Pre-arbitration gives the merchant and the issuing bank another opportunity to resolve the acquirer's dispute. This phase does not involve the Card Brands in making a final decision.

During this phase, the merchant will have the opportunity to present new evidence to help support the transaction. The merchant will only have three (3) working days to send the information to PagueloFacil from the notification.

4. Arbitration

This dispute life cycle continues if the issuing bank and the acquiring party (i.e. PagueloFacil and the merchant) did not reach a consensus. Now the card Brands (Visa or Mastercard) is involved to make a final decision on the dispute. Please note that this stage of the dispute life cycle is costly and applies a penalty of $500 and is rarely an opportunity to challenge the decision.

This stage is at the discretion of the trade whether it wishes to continue. Should the merchant choose not to proceed to this stage, the claim will be considered forfeited by default, whereby the transaction amount would be reversed to the cardholder's account. If the merchant chooses not to continue with the dispute, the merchant will assume the penalty mentioned above and the case will be reviewed by the Brand, who will decide in favor or against the merchant.

5. Resolution

The chargeback process will be completed, and a decision will be issued for or against the merchant. The case is closed at this point and neither party may appeal the decision made.

In case the decision is in favor of the merchant, PagueloFacil will release the amount withheld from the transaction in claim.

If the decision is issued in favor of the cardholder, PagueloFacil will discount the amount of the transaction in claim.