Rupay chargeback Excerpts

Rupay chargeback rules are a mechanism for cardholders to dispute transactions and recover funds
when there are issues with a purchase or when the transaction is fraudulent. A chargeback can be
initiated if a cardholder feels they were charged incorrectly, received a non-delivered or defective
product, or if the transaction was unauthorized.

Here's a more detailed explanation:

1. Reasons for Chargebacks:

 Unauthorised Transactions:

If a cardholder's account is charged for a transaction they did not authorize, they can initiate a
chargeback.

 Merchant Errors:

This includes duplicate charges, incorrect amounts, or other processing mistakes by the merchant.

 Non-Delivery of Goods/Services:

If a cardholder pays for a product or service but does not receive it, they can request a chargeback.

 Product/Service Issues:

If the delivered product or service does not meet the cardholder's expectations or is not as
described, they can dispute the transaction.

 Fraudulent Transactions:

If a cardholder's information was used fraudulently, they can initiate a chargeback.

2. Chargeback Timeframes:

 The cardholder generally has a timeframe of 120 days from the date of the transaction to file
a chargeback with their issuing bank.

 The National Payments Corporation of India (NPCI) has introduced new rules for UPI
transactions, including automatic acceptance/rejection of chargebacks based on Transaction
Credit Confirmation (TCC) and return requests.

3. How a Chargeback Works:

1. 1. Initial Dispute:

The cardholder contacts their issuing bank to dispute the transaction.

2. 2. Bank Investigation:

The issuing bank investigates the claim and may request additional information or documentation
from the cardholder or the merchant.

3. 3. Merchant Response:

The merchant can respond to the chargeback by providing evidence or challenging the cardholder's
claims.
 4. 4. Bank Decision:

The issuing bank reviews the evidence and decides whether to uphold or reverse the chargeback.

5. 5. Resolution:

If the chargeback is upheld, the cardholder's account is credited, and the merchant is liable for the
transaction amount. If the chargeback is reversed, the transaction remains on the cardholder's
statement.

6. 6. Arbitration:

If either party disagrees with the bank's decision, they can appeal through arbitration, and the card
network (RuPay, Visa, Mastercard) can help resolve the case.

4. Who Pays for a Chargeback?

 When a chargeback is approved, the merchant usually bears the cost, including the
transaction amount and potentially additional fees from their bank.

 A high number of chargebacks can lead to banks holding remittances for the business and
potentially even a ban on online payment services.

5. Chargeback Reason Codes:

 There are various chargeback reason codes that are used to categorize the reason for the
dispute.

 These codes help to streamline the chargeback process and ensure that all parties involved
are aware of the nature of the dispute.

6. NPCI's Role:

 The National Payments Corporation of India (NPCI) is the regulatory body for RuPay and plays
a crucial role in setting and enforcing chargeback rules and guidelines.

 NPCI has implemented new rules for UPI transactions to automate the chargeback
processing.

7. Importance of Chargebacks:

 Chargebacks are an important mechanism for protecting consumers from fraud and ensuring
that they receive the goods or services they pay for.

 They also encourage businesses to maintain transparency and ensure a smooth customer
experience.

RuPay Card Chargeback System and Reason Codes Explained:

A chargeback is a process whereby a customer can dispute a credit or debit card transaction and
have the charge reversed. The cardholder contacts their card issuer and requests a chargeback, and
the issuer debits the merchant’s account for the full amount of the transaction. The merchant then
can present evidence that the transaction is valid, or the chargeback will be sustained.

A chargeback reason code is a numerical code that indicates the reason why a customer has disputed
a charge on their statement. The chargeback reason code is associated with a brief description that
provides the merchant with more information about the dispute.

RuPay is a domestic card payment network launched by the National Payments Corporation of India
(NPCI) in 2012. It is the Indian version of international payment networks like Visa and Mastercard. If
you get a chargeback from RuPay, you can use this guide as a quick resource to identify the reason.

RuPay clears the card transactions through RuPay Global Clearing and Settlement System (RGCS)
designed to process, clear and settle online transactions passing through NPCI’s central switch and to
facilitate the RuPay members(Issuing/Acquiring) in raising and resolving a dispute on a transaction
which had previously been cleared by RuPay it has defined the rules and guidelines for the dispute
management process and facilitates this process through RGCS system(Web UI/File staging) for card
transactions and URCS (UPI Real time Clearing & Settlement) for UPI Chargebacks dispute resolution.

RuPay Card holder Dispute Chargeback Reason Codes:

1) Retrieval Request Reasons and Reason Codes

A dispute or chargeback retrieval request is a request from a cardholder to the card issuer for a copy
of the original transaction receipt. The request is usually made when the cardholder is disputing a
charge on their credit card statement. The request is made to the card issuer, who then contacts the
merchant to obtain the receipt. The card issuer then forwards the receipt to the cardholder.

Retrieval Request/ Copy request Reason Codes

1001- Cardholder does not recognize the transaction

1002- Cardholder disputes billed amount

1003- Transaction Supporting Document (TSD) needed for cardholder’s personal records expense
reporting

1004- For fraud /dispute investigation or legal/ regulatory issues

2) Goods & Services Related Issues

1061 - Credit not processed for cancelled or returned goods and services

This code is issued when a customer has returned goods or services, and the merchant has not
credited the customer's account. The merchant must issue a credit to the customer's account in
order to resolve the issue.

1062 - Goods and services not as described or cardholder received defective goods or services
Cardholders may submit a chargeback to indicate that the goods or services purchased with a Rupay
card were not as described, or the cardholder received defective goods or services.

1063 - Paid by other means or card account was also billed for the same transactions

Cardholders can raise a chargeback if they paid for goods or services using another mode of payment
(e.g., cash, vouchers, cheque), yet their card was still charged in addition to the original transaction.
This often happens when the cardholder initially chooses to pay with cards but then changes their
mind and selects an alternate payment option; however, merchants fail to void out the previously
created card transaction which subsequently results in two payments being taken from both options.

1064- Goods or services not provided/not received-Services were not provided or goods not
received by cardholder

This chargeback can be raised under any of the following conditions: 1. Merchant Establishment was
unable or unwilling to provide goods or services. 2. Cardholder or authorized representative did not
receive goods or services at the agreed upon location or by the agreed upon date.

3) Processing Error Related Issues

1081 - Transaction not settled within the specified timeframes

This chargeback is the result of a transaction settling more than seven days after its initial date, as
well as not being processed within required timelines and an account in bad standing on processing
day.

1082 - Credit posted as debit

The chargeback arises from a mismatch between the transaction code or keying error and what
actually occurred - such as when Merchant Establishment credited an account instead of making a
purchase.

1083 - Transaction detail incorrect - The account number or transaction amount unutilized in the
transaction was incorrectly entered

When an incorrect transaction amount is calculated, a change to the original figure is made without
cardholder consent or transactions are processed with an inaccurate account number - all of these
can lead to chargeback scenarios.

1084- Duplicate Processing

This chargeback arises when the same transaction is processed more than once.

4) Copy request related Issue

1101 - Illegible Fulfillment

If the issuing institution is unable to retrieve legible documentation when requested, they may raise
a chargeback against you.

1102 - Retrieval Request not fulfilled

A chargeback may be initiated if the acquiring institution fails to address a retrieval request within its
allotted timeframe or responds with an unfavourable outcome.

1103 - Invalid fulfillment

Consumers can raise a chargeback if they receive invalid documents in response to their retrieval
request, or the applicable response code conditions were not met.

1104- Cardholder does not recognize the transaction

The cardholder does not recognize the transaction appearing on the cardholder’s statement.
Additional information is required by cardholder in identifying the transaction.

5) Authorization Related Issues

1121- Transaction received declined authorization response

This chargeback can be raised by the issuing institution if the Merchant Establishment completed a
transaction after an authorization request received a decline or pickup response.

1122 - Transaction not authorized

Credit card institutions may initiate a chargeback when the merchant establishment fails to acquire
required authorization, uses improper data for processing approval, or processes offline transactions
with an expired card.

1123 - Transaction was processed with invalid card number and authorization was not obtained or
credit is processed with invalid card number

When a transaction is not authorized or the account number does not match with one that exists on
an issuing institution's master data file, it may be met with a chargeback by said issuer. To ensure
accuracy and enhance security measures, double-checking against any discrepancies in authorization
status and records within their system should always be practiced.

6) Fraud Related Issues

1141 - Fraudulent card present transactions

In order to initiate a chargeback, there must have been unauthorized transaction activity in either a
card-present (involving the actual use of an account number or physical card) or chip card
environment. If applicable, it may also be due to no EMV compliance and/or falling back on non-EMV
transactions as outlined by Section 15.6 regulations.

1142 - Fraudulent card not present transactions

Issuing institutions may consider raising a chargeback if there are signs of unauthorized or fraudulent
activity, such as an invalid account number being used for 'Card Not Present' transactions.
Furthermore, any suspected absence of cardholder authorization in these scenarios could be
grounds to justify the action.

1142 - Fraudulent multiple transactions

The issuing institution can raise a chargeback if multiple transactions have been made with the same
card at the same Merchant Establishment outlet without explicit permission from the cardholder. For
this to be applicable, all requirements must met: that all disputed transactions occurred in one
location; that it is accepted by both parties (the cardholder and merchant) that there was
participation of some kind on behalf of said holder for one transaction; as well as their denial when it
comes to other contested ones; finally offering proof such activity took place while they were in
possession of said physical device.

Disclaimer:

These are excerpts from the complete guide : Procedural Guide from NPCI for Rupay transactions

Major differences between Rupay and global networks like Visa, Mastercard, Amex, etc.

Rupay Global Networks

Applicable only to Indian Issuers Applicable to Indian and global issuers
Simplified process of chargeback with lesser A more defined and complex process of
documentation asks chargebacks
Chargeback raising TAT customer is 90 days Chargeback raising TAT for customer is 120 days
Issuer filing chargeback is not charged Issuer filing chargeback is charged 5 USD per
anything chargeback filed
Penalty or fine is very less than global Penalty or fine is more and arbitration is
networks and local rules like Harmonization complicated and takes a longer time.
TAT apply if merchant accepts chargeback
and does not refund within stipulated time.
Arbitration is closed typically within 3-6
weeks of raising chargeback
Rupay transactions in India are 3D secure, Liability shift depends on ECI indicator, though for
2FA where liability shifts to Issuing bank and India, even these transactions are 3D secure and
thus arbitration cases noted for Rupay 2FA protected.
transactions are fewer.