Disputes

Overview

A dispute (also called a chargeback) occurs when a customer contacts their bank or payment provider to challenge the validity of a charge. When a dispute is opened, the disputed amount is held pending resolution. You can contest the dispute by submitting evidence to PayMongo, which forwards it to the relevant financial institution for review.

How disputes arise

Disputes can be initiated for several reasons:

Reason	Description
Fraud	The accountholder denies participation and authorization to the transaction.
Late Presentment	The transaction was not processed within the allowed time after getting initial authorization.
Declined Authorization	The transaction was processed after a declined initial authorization request.
Duplicate Processing/Paid by Other Means	The accountholder alleges a duplicate charge for the same transaction.
Incorrect Amount	The accountholder claims the charge does not match the authorized or agreed-upon amount.
Merchandise/Service not Provided	The accountholder claims non-receipt of the product/service.
Cancelled Recurring Transaction	The accountholder was charged after canceling a recurring subscription or payment plan.
Not as Described or Defective Goods or Service	The accountholder disputes the quality or accuracy of the product/service.
Credit Not Processed	The accountholder alleges a failure to process a scheduled refund.
Cancelled Merchandise or Service	The accountholder disputes a charge for a cancelled or returned transaction.
Misrepresentation	The accountholder claims the transaction was misrepresented by the merchant at the time of sale.

Dispute lifecycle

opened
  → needs_response    [newly opened case; merchant evidence required to build rebuttal]
  → under_review      [merchant evidence received and submitted to bank; awaiting their review]
  → won               [dispute resolved in your favor; funds released]
  → lost              [dispute resolved against you; funds returned to customer]

Submitting evidence

When a dispute is opened, you have a deadline to submit evidence. Missing the deadline results in an automatic loss.

List of compelling evidence required to formally contest the chargeback:

Customer Details — billing and shipping information
Product/Service Details — order description and breakdown of charges, itinerary
Proof of Received Payment — proof of received payment (invoice, e-receipts, payment confirmation)
Proof of Delivery or Service — photo proof of delivery, delivery logs, signed delivery receipt
Properly Disclosed Terms and Conditions — cancellation policy, return & refund policy, no-show policy
Proof of Refund — proof of successful refund, deposit slip, bank transfer
Any additional relevant documentation — customer communication, system logs, shipping arrangements

Submit evidence through the PayMongo dashboard under the Disputes section, or via the Disputes API.

3D Secure and chargeback liability

When a card transaction is authenticated with 3D Secure (3DS), liability for fraud-related chargebacks shifts from you to the issuing bank. This means that if a 3DS-authenticated payment is disputed as fraudulent, the bank bears the loss — not you.

Disputes for reasons other than fraud (product not received, etc.) are not covered by liability shift regardless of 3DS. This is one of the key reasons to enable 3DS for card payments. PayMongo applies 3DS 2.0 automatically where applicable.

Preventing disputes

Send order confirmation emails with itemized details
Clearly state your refund and cancellation policy and require customer agreement before checkout
Respond quickly to customer service inquiries — unresolved complaints often escalate to disputes
Use descriptive payment descriptions so customers recognize the charge on their statement
For high-value orders, use Hold Then Capture to verify before charging

Relationship to refunds

A Refund and a dispute are different:

A refund is initiated by you (the merchant) to return funds to the customer
A dispute is initiated by the customer through their bank

Issuing a refund proactively — before a dispute is filed — can prevent the dispute from being raised. Once a dispute is opened, a refund alone doesn't automatically resolve it; the dispute process must still be followed.