Arbitration chargeback

An arbitration chargeback is the final stage in the chargeback process, and it happens when the customer and their bank have rejected your ‘decline’ response at the pre-arbitration stage.

At this stage, all the parties involved — the cardholder, the bank, and the business — cannot resolve the dispute on their own, so a representative of the card scheme intervenes and makes a judgment. No new evidence is provided at this stage; the card scheme representative reviews the receipts you provided in the previous chargeback stages.

When your business receives an arbitration chargeback, we'll notify you about it via email. In this email, we'll explain why the customer took the chargeback to arbitration.

To ensure that you don’t miss notifications about arbitration chargebacks, it’s important that all the email addresses you set as your chargeback emails on your Paystack account are those that do not get too many inbounds or are closely monitored. You can review the email address set as Disputes email on your Dashboard.

The chargeback journey always ends at arbitration. The card scheme will either rule in your favour or the customer's favour. No debit will be passed to your account if they rule in your favour.

However, if they rule in favour of the customer, you will be debited for the arbitration fee and the full transaction amount. Mastercard charges up to $640 for each arbitration chargeback, while VISA charges up to $750.

Most businesses choose not to go into arbitration because of the fees, time, and potential penalties if you lose your arbitration case. Arbitration chargebacks mostly favour the customer, so it is not advisable to let chargebacks get to this stage.