What is dispute management and how does it help to protect merchants? | Swipe
Blog on payment dispute and merchant protection from disputes with clients.

What is dispute management and how does it help to protect merchants?

Dispute management is the protection of your revenue from the so-called friendly fraudsters to help you recover your funds when illegitimate chargebacks are filed. It’s a process to recover any discrepancies that arise in incomplete invoices, billing, past debts or any other customer disputes.

With increased digital transactions, the need to manage chargebacks has also increased. Chargebacks and disputes put a negative impact on the company and customer experience. These friendly frauds result in loss of product, increased processing costs, transaction fee etc. Chargebacks diminish your profit, time and business. 

“According to Mastercard, worldwide chargeback volume is expected to hit 615 million in 2021. Other studies suggest that global chargeback costs may reach $117.47 billion by 2023.” 

Accounting for chargeback fees and other related revenue drains, the average chargeback will cost merchants $3.60 for every $1 in direct transaction costs.  

“Chargeback Fraud threat growing as 65% of Chargebacks911’s Respondents Reported an Increase in 2022”

-The Fintech Times

With Dispute Management, you can create and manage disputes from your business partners regarding incorrect invoices, credits or missing invoices as dispute cases. Dispute Management is done in case your company meets one or more of the following conditions:

  • Your communications structure is complex and has unreliable customer service.
  • You create numerous recurring invoices or bills for your customers.
  • You have longer processing times for invoice-related and payment-related complaints.

One of the many ways to protect merchants from these friendly frauds is the use of authentication codes and transaction passwords. A strong identity verification system can help prevent more fraudsters from making purchases that may end up as chargebacks. On other hands improving customer service and better. Have a clear dispute and return policy for your business. Forgetting about their purchases or having trouble understanding why their accounts were charged is not uncommon for cardholders.

Whenever a customer cannot understand a charge on their account statement, it creates a situation of confusion that results in a dispute. The merchant then has 7 days to challenge the dispute claim. A thorough research is done to investigate the dispute. The funds from the merchant are then returned to the cardholder. If the dispute case awards in the favor of the merchant, no funds will be granted to the cardholder. The funds will be released to the merchant’s settlement account, and the admin fee reversed to the merchant.

Automated reconciliation has helped Asia-Pacific Companies to improve accuracy and reduce costs by folds. It provides daily reconciliations of bank statements against its internal ledger, and fast-track identified exceptions while prioritizing ageing and as well as expired items. 

Payout Reconciliation report assists you in tallying the payouts in your account statement with the transactions. It provides you with all the breakdown of your opening and closing balance while matching the transactions with Swipe and hence looking out for any abnormalities. It is fully customizable to check for any specific date range.

Swipe wants to help you create intelligent, effective strategies that will lead to a significant improvement in your dispute resolution.

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