Understanding card chargebacks

A chargeback occurs when a cardholder disputes a payment made on their debit or credit card, and asks for it to be reversed, on the basis that it was invalid or unauthorised.

The cardholder’s bank will decide whether the disputed payment should be reimbursed, based on rules set out by the card schemes. Macquarie only acts as an intermediary in the process and doesn’t decide the outcome.

If a chargeback is received, the cardholder’s bank will take the funds from Macquarie and we’ll debit your account for the disputed amount.

For more information on the risks associated with chargebacks and your responsibilities as a DEFT biller, please refer to the DEFT Biller Agency Agreement.

A chargeback can occur for several reasons, mainly if a cardholder notices a transaction which they haven’t authorised or don’t recognise.

With DEFT, the most common reason for chargebacks is when a payer has used someone else’s card, or stolen card details, to pay you.

They may also occur if:

• a payer has fallen victim to a scam, where a scammer uses an innocent third-party’s stolen card details to pay DEFT
• a payer acknowledges they authorised a transaction, but believe the goods and services paid for have not been provided as per your agreement with them
• there has been a technical processing error causing unintended payments from their card.

1. The cardholder initiates the chargeback by disputing a payment made on their debit or credit card with their bank
2. The cardholder's bank will process a dispute through the card provider (Mastercard, Visa or American Express) and Macquarie is notified of the chargeback
3. Macquarie will contact you via email to notify you of the dispute 
4. The disputed amount will be debited from your account.

DEFT uses 3D Secure (3DS) technology to protect your business from card fraud. 3DS provides an additional layer of authentication, by asking your payers to verify the transaction via their own bank. This may be in the form of a one-time code or by authenticating the transaction in their own banking app.

Where 3DS authentication occurs, the liability for any fraud-related chargebacks shifts from you to the cardholder’s bank.

It's important to know that not all card payments are protected by 3DS. If you prefer not to accept card payments, you can ask us to switch off this payment method at any time.

We’ve observed several scams affecting clients that have led to card chargebacks, including:

• refund scams
• intermediary ‘discount’ scams.