In this guide you will find an overview of what a dispute is, why they exist, and frequently asked questions. For more information see our help guide on the most Common dispute types and prevention strategies.
What is a dispute?
Disputes (commonly known as ‘Chargebacks’) happen when a cardholder (your client/customer) queries or reports a payment with their card issuer/banking institution. This can happen for several reasons, such as:
- Fraudulent: The payment looks like it was made illegally or without the card owner’s permission.
- Product not acceptable: The amount of service charged doesn’t match what was originally agreed.
- Product not received: A cardholder believes they did not receive what they paid for.
- Credit not processed: The customer didn’t receive a refund as agreed.
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Duplicate: The payment was a duplicate and occurred more than once.
This process helps to maintain trust in card payments by giving consumers a formal way to dispute charges when something hasn’t gone to plan. For business owners, understanding how disputes work allows you to balance protecting your revenue while maintaining fairness, transparency, and strong customer relationships.
For more information see our help guide on: Common dispute types and prevention strategies
Timely note: Cardholders always have the right to dispute any card payment. This is a standard industry practice, and is not unique to Timely. Other payment providers will also follow this process.
How do disputes work?
A dispute starts by the cardholder contacting their bank because they don’t recognise the payment (fraudulent), expected a refund (credit nor processed or product not received), were double-charged (Duplicate), or generally don’t agree with part or the full payment because they feel the service they received was not as advertised or was overcharged (e.g. Product not acceptable).
Their card issuer/bank then raises a dispute with the corresponding dispute reason to Stripe, who is our payment processor, who will then notify both yourself and Timely.
Important disclaimer: While Timely is here to support you through this process, as the receiving merchant of the funds and dispute - it is your responsibility to respond to the dispute by either accepting or compiling evidence to counter.
If the dispute has been countered, the issuing bank will review the submitted evidence and make a decision within 3 months. Stripe and Timely will then notify you of the outcome once it’s been determined.
If you win the dispute, nothing changes for you: no money is taken and no fee is charged. If the cardholder wins instead, you will be charged a dispute fee and the disputed amount will be taken from your TimelyPay/Stripe account and included in your next payout.
When a bank rules on the dispute, that ruling is final for all parties. There isn’t an option to challenge the outcome through Stripe. This is an industry standard and not unique to Timely/Stripe.
Important disclaimer: Timely isn’t financially responsible/liable for any disputes made against your TimelyPay/Stripe account. Timely is also not involved in the decision-making process of the dispute outcome.
Frequently asked questions (FAQs)
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What are my responsibilities as a business owner?
While Timely will guide and support you, the responsibility to respond to disputes sits with you as the recipient of funds. This includes deciding whether to accept the dispute or submit evidence to contest it.
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How long will the investigation take?
If you contest a dispute, the issuing bank will usually make a decision within up to 3 months after the deadline or submission.
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I lost a dispute, but the loss was higher than the disputed amount – why?
If the dispute is decided in the cardholder’s favour, a dispute fee will apply in addition to the reversal of the disputed payment.
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What are the dispute fees?
The dispute fee is a standard fixed amount fee that depends on your currency and regardless of the disputed amount: $25 AUD, $25 NZD, $15 USD, £15 GBP, €15 EUR.
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Will I be charged the dispute fee when I accept the dispute?
Yes, the dispute applies to every dispute unless the bank decides the outcome in your favour.
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How do I prevent receiving disputes in future?
Patterns in disputes can highlight opportunities to improve your business practices - such as clearer communication, adjusted policies, or additional setting enablement. Making proactive changes can significantly reduce future disputes and improve customer confidence.
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I use Timely Payments, shouldn’t Timely wear the cost of the dispute?
Timely is not financially responsible for disputes raised against your Timely Payments account and is not involved in the final decision-making process. Our role is to notify and support you through the process.
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Can I respond to disputes from my mobile device?
Yes, you certainly can! However, we do recommend using a Laptop or PC if available to make it easier for yourself to compile and upload evidence.