How a dispute proceeds
The cardholder contacts the issuer, by app or by phone, and says what is wrong. The issuer checks the claim against the scheme's dispute categories, may credit the cardholder provisionally, and decides whether a chargeback right exists.
Before filing, the issuer may look up the merchant's order details or send an alert, and many disputes end there with an explanation or a refund. If not, the issuer files through the scheme's system, the acquirer is debited, and the merchant accepts the loss or answers with evidence.
What the word dispute covers
Usage differs by speaker. Cardholders and banks say dispute for the complaint, and merchants say chargeback for what reaches them. Mastercard's Chargebacks Made Simple Guide of July 2025 describes a dispute as a disagreement between issuer and acquirer, handled as a chargeback or, where no chargeback right exists, as a compliance case.
Other payment methods have disputes of their own. Direct debit schemes, wallets and buy now, pay later providers each run a separate process, with separate rules and time limits.
Why disputes matter to a payments product
Every dispute costs staff time and usually a fee, whoever wins, and the schemes monitor how many a merchant generates. A gateway or acquirer therefore needs dispute handling as a function: notifications to the merchant, deadlines, evidence upload, ledger entries for the debit and any reversal, and reporting by reason code.
Dispute, chargeback or refund?
- Chargeback
- The forced reversal that follows when the issuer files the dispute with the scheme. Not every dispute reaches that stage.
- Refund
- Money the merchant returns by its own decision. A refund made in time removes the reason for a dispute.
- Compliance case
- At Mastercard, the procedure for a financial loss caused by a rule violation where no chargeback right exists.
Where a dispute shows up in a platform
Modules that do the work
- Card acquiringCard acceptance on the phone, in store and online, through the acquirer you choose.
- Fraud & riskReal-time fraud scoring, limits and case management, with the risk engines you already trust.
- LedgerThe double-entry book of record behind every balance, fee and transfer.
- NotificationsEmail, SMS, push and in-app messages in your brand, through the providers you choose.
Platforms that need it
Guides that go deeper
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.