program: Chargeback Handling
- authority: Mastercard SPME §10.1, §10.3, §10.4, and §11.5
+ authority: Mastercard SPME Section 10.1, 10.3 (updated August 2024), 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
  chargeback:
    - merchant_rebuttal_letter
    - delivery_confirmation
    - customer_communication
    - fraud_and_chargeback_data_analysis
  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 evidence requirement for fraud and chargeback data analysis to address new MATCH reason codes
- # related to excessive chargebacks and fraud ratios as introduced in Mastercard SPME §11.5 update,
- # supporting compliance with chargeback management standards per Mastercard SPME §10.1 and §10.3.
+ # Note: The updated Mastercard SPME Section 10.3 (August 2024) removes prior requirements
+ # for submissions of preliminary and final forensic reports and restrictions on customer conduct
+ # during investigations. These changes reduce detailed obligations related to forensic report
+ # submissions and investigation cost responsibilities but do not affect overall chargeback handling
+ # lifecycle or evidence types required, which remain aligned with Mastercard SPME sections 10.1, 10.4, and 11.5.
+ # Therefore, existing chargeback handling rules are maintained as is to ensure consistent compliance.

Chargeback Handling

Chargebacks are cardholder-initiated disputes against a transaction. Halyard Pay, acting as the acquirer, manages disputes from initial presentment through potential arbitration, adhering to Mastercard's requirements to protect all parties involved.

Lifecycle overview

Disputes progress through defined phases: first presentment, chargeback, second presentment (re-presentment), pre-arbitration, and arbitration. Compliance with evidence standards and timelines at each step is essential to prevent adverse rulings.

Required actions

1. Acknowledge incoming chargebacks within one business day.

2. Gather necessary evidence relevant to the dispute stage.

3. Submit second presentments when liability is disputable, supported by strong documentation.

4. Escalate to pre-arbitration and arbitration only after issuer rejection of second presentment.

5. Retain comprehensive case documentation for auditing and reporting purposes.

6. Provide all requested documentation promptly to Mastercard during investigations or appeals as governed by sections appeals, complying with section 10.3 and 10.4 of the Mastercard SPME.

Note that recent updates to Mastercard SPME section 10.3 reflect revised obligations relating to forensic investigations, including removal of mandated preliminary and final forensic report submissions and modifications around customer conduct and investigation cost responsibilities.

Monitoring and Risk Factors

Halyard Pay evaluates merchant risk using updated Mastercard MATCH Listing Reason Codes, including new, specific definitions for elevated chargeback and fraud concerns:

• Laundering: Merchant presenting invalid transaction records rather than bona fide sales.

• Excessive Chargebacks: Monthly Mastercard chargebacks exceed 1% of sales transactions with total chargebacks ≥ USD 5,000.

• Excessive Fraud: Fraud-to-sales ratio of 8% or more, with at least 10 fraudulent transactions totaling USD 5,000+ in a calendar month.

These clarified definitions, part of Mastercard's updated SPME MATCH Listing Reason Codes (see section 11.5), guide Halyard Pay’s risk assessments and chargeback management protocols to align with Mastercard’s evolving standards.

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