Chargebacks & Dispute Management

This document sets out FLOWA PAY INC.'s policy position and control objectives, published for transparency and to support institutional due diligence. It is reviewed periodically and does not constitute legal advice. FLOWA PAY INC. makes no representation that it holds any licence, authorisation or certification except the FINTRAC Money Services Business registration expressly stated in the Regulatory Disclosures.

This policy explains how disputes raised against payments processed on the Flowa Pay platform are handled, what is expected of merchants, and how dispute exposure is monitored. It covers card-scheme chargebacks and the equivalent processes on non-card rails.

A chargeback is a reversal of a card payment initiated by the cardholder's issuer under card-scheme rules. It is not a refund: a refund is given by the merchant, whereas a chargeback is imposed through the scheme process and carries additional cost and reputational consequences for the merchant.

Common reasons include the cardholder not recognising the descriptor, goods or services not received or not as described, a cancelled recurring payment that continued to charge, processing errors, and fraud.

Non-card rails behave differently. Account-to-account and most instant payments carry no scheme chargeback right. Disputes, errors and recalls on those rails follow the rules of the relevant scheme, and recovery generally depends on the cooperation of the receiving party.

• Notification. The issuer raises the dispute and the acquiring route notifies Flowa Pay, which notifies the merchant.
• Provisional debit. The disputed amount is typically withheld from or deducted against merchant settlement while the case is open.
• Evidence. The merchant submits evidence within the deadline set by the scheme. Deadlines are short and are not extendable by Flowa Pay.
• Representment. The evidence is presented to the issuer through the acquiring route.
• Outcome. The dispute is resolved in favour of the merchant or the cardholder. Some scheme processes allow further stages, including pre-arbitration and arbitration, which carry their own fees.

Flowa Pay surfaces each stage and its deadline, and links the dispute to the original transaction and to the settlement line that carried the deduction.

Disputes are won on records, not explanations. Merchants should retain and be able to produce:

• proof of delivery or of service provision, with dates and recipient;
• the customer's order, the terms accepted and the time of acceptance;
• authentication results, including 3-D Secure outcome where applicable;
• the refund and cancellation terms shown to the customer before payment;
• support correspondence, including any refund offered or declined;
• for recurring charges, the record of the customer's agreement to be charged again.

Because disputes can arrive months after the payment, retention policy must reflect the dispute window rather than the fulfilment window. See our Record Keeping Policy.

Chargeback liability sits with the merchant unless a scheme rule assigns it elsewhere, for example where a successful 3-D Secure authentication shifts liability for certain fraud-related reason codes. Scheme fees associated with a dispute are also charged to the merchant.

Where chargebacks exceed amounts due to be settled, the shortfall is payable by the merchant under its agreement. Where underwriting has determined that a reserve applies, it may be used to cover this exposure; reserve balances, holds and releases are visible on settlement statements rather than applied silently.

Card schemes and acquirers monitor chargeback counts and ratios, and merchants exceeding programme thresholds can face additional fees, remediation requirements or termination of acceptance. Flowa Pay monitors dispute volume and ratio at merchant level and raises a deteriorating trend early, because the trajectory is easier to correct than the breach.

Where a merchant's dispute performance presents unacceptable risk, we may require remediation, apply additional controls, adjust settlement terms, or suspend acceptance under the merchant agreement and our Acceptable Use Policy.

Most avoidable disputes come from a small number of causes: an unrecognisable billing descriptor, unclear recurring terms, slow or refused refunds, and delivery that does not match what was promised. Clear descriptors, published refund terms, responsive support and proportionate authentication reduce dispute volume more reliably than contesting disputes after the fact.

Dispute notifications are delivered through the dashboard and by webhook. Questions can be sent to hello@flowapay.co.