What is arbitration in a chargeback?

In short

Arbitration is the final stage of a card chargeback, in which the card scheme itself, not the issuer or the acquirer, decides which of the two bears the loss on a disputed transaction. Arbitration follows a failed pre-arbitration attempt, and the scheme's decision binds both members and carries a fee for the loser.

Also called: Chargeback arbitration, Arbitration case, Dispute arbitration
Family: Fraud and disputes
Facts checked: 13 October 2026

How arbitration works

A dispute reaches arbitration only after the issuer and the acquirer have exchanged their evidence and one has refused the other's last request, the pre-arbitration. The side that still disagrees files a case with the scheme. At Visa, a member may not send the scheme anything that the other member has not already seen.

In the Visa Core Rules of 18 April 2026, a case is filed within 10 calendar days of the pre-arbitration response, and Visa may assign full liability to one member or split it. In Mastercard's Chargeback Guide of 13 May 2025, an issuer files its arbitration case within 45 calendar days of the acquirer's second presentment.

What an arbitration decision means

The decision is final. Visa allows an appeal only with new evidence that was not available before and a disputed amount of at least USD 5,000, filed within 60 calendar days of the decision.

The merchant is not a party: its acquirer files or defends the case and passes on the result and the cost. Because the loser pays the scheme's fee on top of the transaction, acquirers tend to go to arbitration only for large amounts and strong evidence.

Arbitration, pre-arbitration or compliance?

Pre-arbitration: The last exchange between issuer and acquirer, in which one asks the other to accept liability. Arbitration starts only if that request is declined.
Compliance: A separate scheme case for a breach of the rules that caused a loss where no chargeback right exists. Arbitration settles a dispute that went through the chargeback stages.

Where arbitration shows up in a platform

Modules that do the work

Platforms that need it

Guides that go deeper

How to become a PSP or a payment facilitatorGateway, acquirer, payment facilitator or payment institution: where the licence line falls, how the card schemes register payment facilitators, what merchant KYB demands, and the UK and UAE rules.

Where it is written

The laws and standards this page's facts come from.

General information, not legal advice: what applies to you depends on your services and your market.

Every term

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