Hello Alex,

Great information in your newsletter as always. I'm working in the chargeback backend process for large bank and we have following additional steps :-

Step 14 : Issuer bank submits a pre-arbitration to the network which gets passed to the acquirer bank and then the merchant.

Step 15 : Merchant either accepts it or sends a pre-arbitration response back to acquirer bank which is passed to network and then to issuer bank.

Step 16 : Issuer accepts the pre-arbitration response or files an arbitration with the network.

Thank you.

Expand full comment

My answer to the chargeback question is: connect the cardholder with the merchant.

✅ If the merchant agrees, the chargeback process starts from the merchant steps, which should cut costs twice;

⛔ if the merchant disagrees, then the standard flow.

Of course, it will work if the merchant and the cardholder are inside one platform marketplace.

Expand full comment

There is a connection from cardholder to merchant prior to chargeback as well called Ethoca. If merchant agrees, settlement happens outside chargeback process. If not, it's the standard flow.

Expand full comment

What if something goes wrong at step 5 such that the message couldn't be enqueued? Wouldn't it be better to make that part async? We could utilise database change stream to do that. What do you think?

Expand full comment

All the process is async monitored by network which happens over period of 90 days or more. If there's no response by acquirer bank due to their fault, they need to compensate the merchant and pay to Issuer bank. They have to write it as a loss.

Expand full comment