Customers can sometimes dispute previously made payments to attempt to recover the funds. Disputes are also known as “chargebacks”.
Even if you deem your customer doesn't have a legitimate claim for a potential dispute, you should still attempt to resolve the situation proactively. Disputes must be seen as a "last resort" that you'll want to avoid at all costs.
Fortunately, disputes are practically rare in the normal course of business in B2B so you shouldn't worry too much about them.
If your customer disputes a payment before you are able to engage with them, or if they choose to follow through with it, you may be able to file a counter. The exact underlying dispute mechanics vary by payment network but here's the important main distinction you should be aware of:
- direct debit disputes, like ACH or SEPA, are final. This means that you cannot counter the dispute and your customer will always recover their funds from you. You need to resolve the situation with your customer directly.
- card disputes are generally not final and can be countered by submitting evidence, which results in funds being returned to you automatically if won.
If one of your payments is disputed, Upflow will notify and work with you to file a counter if possible. The high level resolution process is as follows:
- whenever a payment is disputed, funds are immediately recovered by the payment network which results in funds being pulled from your account balance (or bank account if insufficient).
- if the dispute is eligible for a counter, Upflow contacts you to gather evidence and file a counter on your behalf.
- the issuing bank reviews the counter filing, and resolves the dispute either in your favor or your customer's favor. Their decision cannot be appealed or influenced by Upflow.