Eliminating Chargeback Liability

The chargeback mechanism was designed in the 1970s for a mail-order catalog world. In modern digital commerce, it represents a structural asymmetry that penalizes merchants.

The Anatomy of a Dispute

When a consumer initiates a chargeback (e.g., Reason Code 1040: Fraudulent Transaction), the burden of proof falls entirely on the merchant. You must provide IP logs, delivery receipts, and AVS matches. Even with compelling evidence, the issuing bank—who represents the consumer—acts as the judge and jury.

How A2A Solves This Cryptographically

Payment initiation via Open Banking (PSD2) requires Strong Customer Authentication (SCA) to occur within the user's native banking environment (e.g., authenticating via FaceID in the Monzo or Chase app).

Because the bank itself performs the authentication before the funds are pushed via SEPA Instant or Faster Payments, the authorization is irrevocable. The concept of a 'chargeback' does not exist in a push-payment network. If a user claims fraud, their grievance is with their bank's authentication security, not the merchant.

Vector	Card Network	A2A (Pisria)
Authentication	16 digits + CVV (easily stolen)	Biometric SCA at bank level
Dispute Window	120 - 180 days	N/A (Irrevocable)
Reserve Requirements	5% - 15% rolling reserve	0%

Common Mistakes in Fraud Management

• Over-tuning 3D Secure: Triggering 3DS on low-risk transactions harms conversion more than it saves in fraud loss.
• Ignoring Friendly Fraud: Accepting chargebacks as a 'cost of doing business' artificially inflates your dispute ratio, threatening your MID.

FAQ

Can a bank reverse a SEPA Instant payment?

Under the SEPA Instant Credit Transfer scheme, payments are final and irrevocable once settled. Exceptions only apply in cases of technical duplication.

What if the customer wants a legitimate refund?

Refunds are initiated programmatically by the merchant via the Pisria Payout API, entirely separate from a dispute network.