If you have just received a card dispute notification, here is everything you need to know: how card disputes work, how they affect your revenue, and the steps to resolve them.

To understand disputes across all payment methods, see Understanding Disputes on Monnify.

What is a card dispute?

A card dispute occurs when a customer formally challenges a card transaction through their bank. If the dispute is ruled in favour of the customer, the card network forces a reversal of funds from the merchant back to the customer. This forced reversal is called a chargeback.

A chargeback is a forced reversal, it is not the same as a voluntary refund you initiate yourself.

How Monnify handles your card disputes

We manage card disputes through a structured four-stage process:

1. Notification: We receive the card dispute from the bank and notify you by sending an email to your chargeback email address. We give you a clear explanation of the reason for the dispute, the required evidence, and your response deadline.
2. Review: Once you submit your evidence to us, our team reviews it and determines the most effective way to challenge the claim.
3. Submission: We process your response and submit it to the bank before their strict deadline expires.
4. Execution (Recall) : We handle the final financial outcome with full accuracy, whether that means securing your revenue or processing the refund.

How to respond to a card dispute

When a dispute is raised, you have two options:

1. Accept the Dispute: If the customer did not receive value or service for the transaction, respond to the dispute email stating your acceptance. Your account will be debited immediately.
2. Contest the Dispute: If you have evidence that the customer received value or service for the transaction, respond before the deadline with your supporting documentation. If your evidence is accepted, the dispute is resolved in your favour and you will not be debited.

Note: If you do not respond before the deadline, the dispute is automatically resolved against you. Your account will be debited and the transaction narration will reflect "chargeback."

3 mistakes that cost merchants disputes and how to avoid them

Mistake 1: Missing the deadline

Every dispute comes with a strict response window. Banks operate on non-negotiable deadlines known as SLAs (Service Level Agreement). If you miss your given deadline, you lose the dispute by default, and the customer receives a refund.

What to do: Treat every dispute notification from Monnify as high-priority. Aim to respond within 24 hours of receiving it.

Mistake 2: Submitting weak evidence

A payment receipt alone is not enough. It only proves that a transaction occurred, not that you fulfilled your end of it. You need clear, specific proof of service.

Evidence For physical goods:

1. Signed waybills, delivery confirmations, or dispatch logs showing delivery date and time, tied to the transaction in question.
2. Emails or messages (e.g. WhatsApp chats) where the customer explicitly confirms receipt of the item.

Evidence For digital services:

1. System logs showing the customer accessed your platform, downloaded a file, or used the service, directly linked to the transaction.
2. Proof that the purchase was made by a verified, registered user with a matching email address.

Mistake 3: Poor communication

The most effective dispute strategy is prevention. Resolving a customer complaint directly and quickly, before they escalate it to their bank, is always the better outcome.

Best practice: Don't just manage disputes; learn from them. Review your chargeback patterns regularly, identify gaps in your delivery or communication process, and update your internal procedures accordingly.

Who makes the final decision on card disputes?

Monnify does not make the final ruling on disputes. That authority rests with the card scheme, which operates strictly within CBN regulations.

Monnify's role is to ensure your evidence is packaged and presented compellingly, giving you the strongest possible case.

How chargebacks affect your money

Monnify does not charge you a penalty fee just because a card dispute is filed. The financial impact is determined entirely by the final ruling:

1. You Win: The customer is not refunded, and your revenue remains intact.
2. You Lose: The disputed amount is forcibly debited from your Monnify wallet.

Note:

1. Negative Balances: If a chargeback is upheld but you have already withdrawn your revenue, your wallet will fall into a negative balance. You must clear this through future sales or by funding your wallet directly.
2. Operational Risk: While there are no direct penalty fees, having a high chargeback volume signals risk to regulators. This can lead to stricter account monitoring or penalties over time.