The Chargeback Crisis

Not as flashy as a data breach or as dramatic as ransomware, chargebacks remain the slow burn of the payments industry, and now they are more clearly the consequence of growing challenges within the FinCrime landscape.

Monica Eaton, CEO of Chargebacks911, said:“Economic stress often changes consumer behaviour. We’re seeing more cardholders exploit chargebacks not because they didn’t receive the product or service, but because they’re looking for ways to manage financial strain. Unfortunately, it’s the merchant who foots the bill.”

Over the past decade, we’ve seen a surge in what’s called “friendly fraud.”It’s not friendly. It’s not even neutral. It’s a nightmare for merchants, and now, financial institutions have a lot more to consider than ever before.

Blame it on the tech, the pandemic, or the Amazonification of consumer habits, the result is the same = a steady rise in disputes that shouldn’t be disputes at all.

What’s rarely said out loud is that the pain doesn’t stop at the merchant. Financial institutions are feeling it too.

Before, you only needed to worry if you were servicing high risk, high dispute merchants. Now, even seemingly low risk merchants are finding themselves with high volumes of chargebacks and disputes. And its most recent effects on FIs are starting to show.

Gone are the days when chargebacks were a merchant issue. Their chargebacks are now your scheme violations.Their negligence now becomes your compliance issue.

As you know, Visa and Mastercard don’t really care if you’re two or three steps removed. If a merchant is racking up disputes, the spotlight turns on everyone in that chain. And as of April 2025, the thresholds are clearly defined, with Visa’s new VAMP threshold at a 1.5% dispute-to-transaction ratio (to be reduced to 0.9% in 2026).

If your merchants exceed these thresholds, you may find you are no longer just facilitating payments. You’re now explaining yourself to the card schemes.

You're on a watchlist.

You're in a programme.

You're being billed.

You’re under review.Not a great place to be.

Yet many institutions leave this on the back burner. They onboard merchants with fast paperwork and faster promises, but when the disputes roll in and the chargeback rates spike, it becomes a scramble to defend what should have been de-risked from day one.

They forget about the operational drag.They forget about the reputational drag.Because nobody wants to be the FI tied to that merchant in the news for selling fake supplements.

The thing with chargebacks is they seem small at first, a few disputes here, a spike in ratios there. But they’re signals. And if you’re enabling the growth of high risk merchants without managing their risk properly, you’re not just complicit, you’re exposed.

The myth that chargebacks are just a “merchant issue” has to go.

This isn’t about complaints anymore. It’s about compliance. It’s about systemic risk. It’s about institutional responsibility.

So the question isn’t whether chargebacks will affect you, they already are.

To strengthen your personal and commercial defences with tailored solutions, I welcome the opportunity to connect.

JOA Solutions

Clarity. Compliance. Confidence.