Fraud and Disputes Guide

Overview

Managing payment risk is a critical part of running an online business. This guide outlines how PayMongo protects your transactions, how you can proactively identify suspicious activity, and the standard process for handling payment disputes (chargebacks).

Purpose

The goal of this guide is to equip you with the operational knowledge to:

1. Minimize Risk: Identify and prevent fraudulent transactions before they are processed or fulfilled.
2. Manage Disputes: Understand the official dispute lifecycle and how to respond effectively if a cardholder challenges a charge.
3. Secure Revenue: Operationalize best practices that protect your business from unnecessary losses.

Use Case

This guide is intended for Operations Managers, Finance Teams, and Business Owners who need to:

• Assess whether a specific high-value order is safe to fulfill.
• Respond to a "Dispute Notification" email from PayMongo.
• Understand why a transaction was flagged or declined.
• Configure internal workflows to handle potential fraud alerts.

Setup and Prerequisites

Before managing fraud and disputes, ensure your team has access to the following:

• PayMongo Dashboard Access: To view transaction details and dispute statuses.
• Order Management System: To cross-reference customer data (shipping address, contact details).
• Communication Channels: A verified email address to receive alerts from [email protected] and [email protected].

Step-by-Step Implementation: The Dispute Lifecycle

When a dispute occurs, it follows a strict banking protocol. Below is the sequential process you will experience.

Phase 1: Notification

When a cardholder files a dispute, the disputed amount is temporarily debited from your account. PayMongo will notify you immediately via email with the transaction details and the reason for the dispute (e.g., "Unauthorized Transaction" or "Goods not received").

Phase 2: Assessment

You must decide whether to Accept or Contest the dispute within 5 working days.

• Accept: If the claim is valid (e.g., you did not deliver the item), accept the dispute. The funds remain with the customer, and the case is closed.
• Contest: If the transaction was valid and you have evidence, you can submit a defense.

Phase 3: Submission

To contest, you must submit compelling evidence via the Dispute Contest Submission Form (linked in your notification email). Evidence may include proof of delivery, signed receipts, or communication logs.

Phase 4: Resolution

The cardholder's bank reviews the evidence.

• Won (Your Favor): The disputed amount and the PHP 800.00 dispute fee are credited back to your account.
• Lost (Customer's Favor): The funds remain with the customer, and the dispute fee is not refunded.

Operational Workflows (Tips & Explanations)

While there is no "code" to implement for disputes, your team should "program" these operational checks into your daily fulfillment process.

1. The "Pause and Verify" Workflow Trigger: You receive a high-value order from a new customer with expedited shipping. Action: Do not ship immediately. Delay fulfillment by 12-24 hours and verify the customer's identity.

2. The Evidence Repository Trigger: A transaction is successfully processed. Action: Automatically archive the following data points for at least 120 days:

• Proof of Delivery (Waybill/Tracking #)
• Customer IP Address
• Conversation/Chat Logs

Related Resources

• Disputes & Chargebacks Process
• Fraud Protection Basics
• Fraud Prevention Strategies

Troubleshooting and Common Errors

Below are common scenarios regarding disputes and their operational resolutions.