program: Chargeback Handling
- authority: Mastercard SPME §10.1, §10.3, §10.4, and §11.5
+ authority: Mastercard SPME 7 6-9, 
+  10.1,  10.3,  10.4, and  11.5
acknowledgement_business_days: 1
lifecycle_states:
  - first_presentment
  - chargeback
  - second_presentment
  - pre_arbitration
  - arbitration
evidence_requirements:
  first_presentment:
    - transaction_receipt
    - authorization_record
+     - Payment Facilitator ID (if applicable)
+     - MCC code from DE 26
+     - Tax ID number (Brazil-specific, DE 112 subelement 012)
  chargeback:
    - merchant_rebuttal_letter
    - delivery_confirmation
    - customer_communication
  second_presentment:
    - compelling_evidence
    - signed_cardholder_agreement
  pre_arbitration:
    - full_dispute_record
    - prior_correspondence
  arbitration:
    - full_dispute_record
    - arbitration_filing
agent_owner: chargeback_agent
 
- # Added explicit reference to ongoing customer submission responsibilities during investigations and appeals
- # per Mastercard SPME §10.7 update, incorporating continuing obligations under sections 10.3 and 10.4.
+ # Enhanced evidence requirements to include Payment Facilitator ID, MCC, and Tax ID
+ # as per Mastercard SPME 7 6-9 updates affecting transaction data fields relevant to
+ # MCC Performance Program investigations and chargeback disputes.

Chargeback Handling

Chargebacks are cardholder-initiated disputes against a transaction. Halyard Pay, as the acquirer, manages the entire dispute lifecycle for its merchants, from initial first presentment through arbitration, in compliance with Mastercard's requirements.

Lifecycle overview

Disputes move through defined stages: first presentment, chargeback, second presentment (re-presentment), pre-arbitration, and arbitration. Adherence to strict evidence requirements and deadlines at each stage is critical to avoid automatic rulings against the acquirer.

Required actions

1. Acknowledge each incoming chargeback within one business day.

2. Collect the necessary evidence based on the current lifecycle stage. stage, including newly emphasized data elements such as Payment Facilitator ID, MCC as indicated in DE 26, and relevant Tax ID numbers where applicable.

3. Submit second presentments when merchant liability is disputable, providing strong supporting evidence. evidence, including ensuring the MCC provided is appropriate and supported.

4. Only escalate to pre-arbitration and arbitration after issuer rejection of the second presentment.

5. Maintain full case documentation for audits and reporting. reporting, incorporating issuer explanations regarding any MCC discrepancies, critical for investigations of incomplete, invalid, or inappropriate MCC allegations.

6. Continuously provide required documentation and information to Mastercard throughout any investigation or appeal process as mandated by sections 10.3 and 10.4 of the Mastercard SPME.

Monitoring and Risk Factors

Halyard Pay monitors merchant risk factors including chargeback ratios, fraud rates, and financial stability. Updated Mastercard MATCH Listing Reason Codes define specific grounds for elevated scrutiny or match listing, including but not limited to laundering (presentation of invalid transaction records), excessive chargebacks (over 1% chargeback-to-sales ratio with minimum USD 5,000 monthly), excessive fraud (fraud-to-sales ratio of 8% or more including at least 10 fraudulent transactions totaling USD 5,000 or more), questionable merchant classification, and bankruptcy.

These refined definitions inform Halyard Pay's chargeback and risk management policies to ensure compliance and mitigate risk exposure.

Source authority: Mastercard SPME §§10.1, §§6, 10.1, 10.3, 10.4, 10.7, 11.5.