Card Disputes Guide

Card networks give the user the option to dispute a transaction for alleged fraud, damaged merchandise, and similar reasons. To file a transaction dispute please use our Dispute Transaction API call.

Dispute Process

Initial Response

When a transaction is disputed, in most cases (except for Merchant Disputes) the end user is entitled to a Provisional Credit. Provisional Credit is a temporary credit extended to the end user equal to the amount disputed.

Provisional Credit is applied against your Reserve Account. So there will be a transaction originating from your reserve account, going into the user's deposit account. Provisional Credits post in the following timeframe for the end users:

Age Account


Over 30 days

Three (3) Business Days

30 days or below

Fifteen (15) Days

Both Reg E and card networks require (in most cases) for the card issuer to immediately provide such credit to the card/account of consumer-type users if the investigation is not completed within 5 business days.

We will also send notice of the provisional credit directly to the user, via text message. This needs be sent within 2 business days, as required per Reg E. But we automate notices to the users for all disputes filed via our Dispute Transaction API call.

When will a Provisional Credit be applied?

Provisional credits are automatically created if the disputed transaction meets the requirements. The disputed transaction must be a debit in order to be eligible for provisional credits. Also, the dispute reason must be either MERCHANT|RETURNED_MERCH or MERCHANT|DEFECT_OR_NOT_AS_DESC.

Since filing a dispute costs $25, any disputed transaction that is $25 or less will automatically result in a provisional credit regardless of the aforementioned requirements.


Dispute investigations can take up to 90 days to reach resolution once submitted to the card network. We receive status updates from the card network during the investigation period. These statuses can be viewed through the dispute_meta field on the dashboard or by making a View Transaction API Call.

Please Note: This update was added at the end 2020 and only newer disputes will have this information.


The investigation will conclude when we receive a response from the merchant or network involved in the processing of the transaction. Should the chargeback be honored by the merchant, we will receive funds back in response. These will either be credited to the user’s account (merchant dispute) or to the your reserve (all other disputes) as appropriate.

The funds will be returned to your reserve account if a provisional credit was applied. Otherwise the funds will be credited back to the user's account.

Should the chargeback not be honored by the merchant, or it was determined there were no chargeback rights given the type of transaction or the manner in which it was processed, the provisional credit will be considered final and the user will be notified.

Should the chargeback not be honored by the merchant, but they respond with evidence that the user was in fact involved in the transaction or authorized the transaction, the provisional credit will be rescinded from the user’s account and credited back to the Platform’s reserve.

Should rescinding provisional credit result in an overdrawn account, you may hold the user liable for this amount. Please keep in mind that you will be ultimately responsible for any outstanding balances and negative balances are reconciled on a regular cadence (see: Negative Balance Reconciliation).

Once the investigation has been completed, we will notify the user within 3 business days with its final decision based on the results of the chargeback.

Dispute Lifecycle

Here is the lifecycle of the entire dispute process. Throughout the investigation, the dispute’s status is updated as we get information from the network:

Dispute Statuses

These are the various statuses a dispute might have throughout the lifecycle of the dispute case. Go to Possible dispute_status Values and Possible dispute_status_note Values to learn more.

Dispute Workflow Timing

Disputes Submission

Disputes are batched and submitted everyday at 4:00 PM PST. A response file for the batch is received at 4:30 PM PST each day that will tell us whether the cases are successfully added, updated, or if there was an error.

Dispute Status Updates

There is an incoming file from the card network at 3:30 PM PST each day that notify us of any updates to open dispute cases.

Network Chargeback Credits and Representment Debits

At 6:10 PM PST we start our reconciliation process for the day. During this time, we may process some dispute-related offline adjustments. This can either be a network chargeback credit or representment debit.

When a representment debit is received, our compliance team will review the dispute case and make a decision on whether or not the provisional credit is returned to the platform’s reserve account. Provisional credit should remain with the user unless there is proof showing the transaction is authorized.

Network chargeback credits and representment debits from the network will be directed to the platform’s reserve, if provisional credit was given to the end user, otherwise it will be directed to the end user’s node.


A dispute enters pre-arbitration once a merchant has represented the transaction with compelling evidence and the Platform decides to contest the re-presentment. Generally speaking, it may be prudent to submit a pre-arb for high value transactions when you believe the compelling evidence is insufficient and therefore does not prove that no error occurred.

Pre-arbs may be submitted for the following types of transactions:

  • ATM withdrawals

  • Authorization related chargebacks

  • Chip liability chargebacks

  • Lost/Stolen/Never received related chargebacks

Following is the lifecycle of a Pre-Arb:

What are the costs associated with Pre-Arbs?

Submitting a per-arb can become quite costly should you lose the case. It is important to weigh the costs against the potential benefits before submitting a pre-arb. We recommend establishing a de minimis to help prevent undue costs. Here are the costs of Pre-Arbs:

  • $150 filing fee + $250 administrative fee; the combined $400 fee is paid by the losing party after ruling.

  • $150 filing fee to withdraw from arbitration before a ruling.

How to File a Pre-Arb?

Since Pre-Arbs are manual, please email to create a Pre-Arb dispute ticket.

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