Grow your business! Enjoy one year fee waiver.

image/svg+xml

Chargeback Insurance Terms

Last updated on 7 May 2021

The First Party uses proprietary machine learning algorithms and heuristics to help you identify and prevent fraud when using the First Party’s credit card payment channel. You may choose to enroll in our Chargeback Insurance Product (as defined in the terms below) which provides you with enhanced fraud detection as well as coverage for any costs and fees which may be incurred due to fraudulent transactions

1. Features of the Product

The eligible Second Party would be able to activate the chargeback insurance product via the dashboard or through email. The Second Party’s eligibility depends on underwriting by the First Party’s compliance team which looks at criterias such as transaction history / chargeback history / industry risk etc.

The chargeback insurance product covers only credit card charges that we receive via our API gateway or checkout/invoices. A charge will be considered protected if:

(A) The Second Party subscribed to the chargeback insurance product;

(B) The Second Party is not in breach of any of the terms here and/or T&C and/or this Confirmation

(C) The Second Party provide the First Party with complete and accurate information for the chargeback, including any other relevant informations that the First Party may request 

(D) The protected charge does not exceed the annual protection limit as described in clause  2 below

(E) The protected chargeback occurred after the date where chargeback insurance is already active or prior the date where chargeback insurance is deactivated

(F) Protected charge must not have been overridden with any fraud rules. 

the First Party will leverage our proprietary risk scoring engine to determine the likelihood of a protected charge being fraudulent. A transaction that has a high likelihood of fraud (defined solely by the First Party) will be blocked by default. The First Party may allow the Second Party to override the decision and allow the transaction to proceed using the First Party’s allow lists or future rules that the First Party may implement. However, these charges will no longer be protected by the First Party and any protection defined in clause 2 below will not apply.

2. Chargeback Insurance Coverage

If a protected charge results in a fraud dispute (as solely defined by the First Party), then the First Party will cover the amount of the protected charge as well as any associated costs/fees imposed by the card schemes (VISA, Mastercard etc.) as long as the criterias in clause  1 above are met entirely.

the First Party will cover the financial losses caused by the fraudulent disputes up to an annual protection limit. The annual protection limit will be described on our website, via the First Party dashboards or via contracts that require the Second Party’s approval or confirmation in order to subscribe for chargeback insurance. The First Party may modify the protection limit and in such scenarios the First Party will notify the Second Party on the changes/modifications to the protection limit via email and on the First Party’s website as well.

The chargeback insurance product will only cover chargebacks that have been raised due to fraud. When the First Party refers to a fraud dispute, the First Party refers to chargebacks whereby the cardholders did not authorize the charge. This does not include scenarios whereby a product is not as described, not received, counterfeit etc. The First Party uses the chargeback reason codes assigned by the card networks to determine whether or not a chargeback is due to fraud (refer to Appendix 1 for list of reason codes).

In the scenario where there is a fraudulent dispute, the Second Party authorizes the First Party to be able to challenge the dispute on behalf of the Second Party, as your approval/subscription of this insurance also constitutes the power of attorney from you to the First Party. The Second Party will continue to be covered by this chargeback insurance product regardless of the status of the dispute. However, the Second Party hereby agree that the Second Party releases all entitlements to any proceeds or refunded amount that the First Party receives from a chargeback that has been won, of which amount will be earned and collected fully by the First Party.

Even though the Second Party is protected from the losses due to fraud, any chargebacks raised against the Second Party will still contribute to the chargeback rates tracked by the card schemes. If the Second Party exceeds the threshold set by the card schemes, the Second Party may be placed into one or more of their monitoring programs. The Second Party may be required to take action (as solely defined by the First Party) to reduce the Second Party’s chargeback rates if the First Party determines that the Second Party has a high chance of being placed in such a programme.

3. Eligibility of the Second Party

The Second Party (as determined by the First Party) that has activated chargeback insurance will have to go through a probation period whereby the First Party will not provide immediate coverage for the fraudulent disputes. The First Party will hold the costs/fees associated for the fraudulent disputes during the probation period until the Second Party has been approved by our internal risk team. The First Party will refund these amounts to your balance if the Second Party has been approved by our risk team. However if our risk team deems your business to be high risk and ineligible for chargeback insurance, the First Party will terminate your subscription to chargeback insurance and the Second Party will not be entitled to any amounts held by the First Party as a result of fraudulent disputes.

4. Fees / Pricing

The fee / pricing for Chargeback Insurance should be communicated to Second Party via First Party’s website, dashboard, or via Second Party’s account managers. The Chargeback Insurance fees only apply to protected charges (refer to the criteria in clausen 1 above) and not to charges that are not protected.

5. Term and Termination

The Terms of Chargeback Insurance mentioned here commences on the day that the Second Party is successfully enrolled for Chargeback Insurance through email to fraud@xendit.co or contact your account managers. The Terms of Chargeback Insurance will continue to apply unless it is terminated by either Party, irrespective of the effectiveness or termination of this service.

Either Party may terminate the Chargeback Insurance Services at any time by providing written notice to the other Party. Termination can be done through agreed address email. Chargeback Insurance may be suspended if the Second Party is in breach of any of the Terms of Chargeback Insurance. The will automatically terminate when the service is terminated.

APPENDIX 1
FRAUD DISPUTE REASON CODES

Visa

10.4 Other Fraud – Card Absent Environment

Mastercard

4837 No Cardholder Authorization

4840 Fraudulent Processing of Transactions

4863 Cardholder does not recognize – Potential Fraud

6321 Cardholder does not recognize

JCB

546 Unauthorized Purchase

American Express

F29 Fraudulent Transaction – Card Not Present

4540 Card Not Present; Card Member denies participation in Charge