The chargeback process is a confusing subject, however a basic understanding of the workflow is important. If you are familiar with how the process works, you can manage chargebacks with high ROI. But if you don’t fully grasp how a dispute unfolds, your bottom line could take a hit.

NOTE: The chargeback process differs slightly for Mastercard®, American Express®, and Discover®. Check this help center article to learn more.

People Involved in the Chargeback Process

In any chargeback situation, there are five main people involved:

  • The cardholder is a consumer who has been issued a credit or debit card. Unless the transaction is fraudulent, the cardholder is the person who makes the purchase.

  • The issuer is the cardholder’s bank.

  • You, the merchant, are a business that has been approved to process credit and debit card purchases.

  • The acquirer is the merchant’s bank.

  • The card brand (Mastercard®, Visa®, etc.) acts as the go-between, facilitating messages and activity between the issuer and acquirer.

These people have different roles to play at each stage of the chargeback process.

The Visa Chargeback Process: Collaboration and Allocation

Unlike other card brands (Mastercard, American Express®, and Discover®), Visa uses two different workflows to manage disputes.


The collaboration process is essentially the same workflow that the other card brands use to manage chargebacks. Check this article for a detailed overview of that process.

The issuer submits a dispute to the acquirer via Visa’s online portal. The acquirer passes the dispute to the merchant. The merchant can challenge the validity of the dispute, if desired. Pre-arbitration and arbitration may follow.

NOTE: For collaboration disputes, we encourage you to accept liability if a case advances to pre-arbitration. We do not recommend that you continue fighting.

The reason is because Midigator helps you create the most compelling dispute response possible with all the evidence that is available — we don’t hold any information back. So unfortunately, if you respond a second time, your argument won’t be any more compelling than it was the first time. This means a pre-arbitration response simply increases your costs without increasing your odds of winning.

Instead of using your resources to fight pre-arbitration cases, spend that time analyzing your chargeback data. What are the most common characteristics of winning responses? What elements are missing from responses that result in a loss or pre-arbitration? How can you optimize your response strategy so you win more and lose less?

Our help center has tutorials that explain how to use Midigator’s reports and charts to make this analysis more effective. If you’d like additional help, contact our support team. We’re happy to help you take a deep dive into your data.


Allocation is a newly adopted management style that takes advantage of Visa’s internal data and automated technology.

Visa consults internal data in an effort to assign liability to either the issuer or merchant.

If liability is assigned to the issuer, the case is closed and the bank or cardholder is responsible for paying the transaction. If liability for the dispute is assigned to the merchant, the merchant can either accept responsibility or respond.

However, because liability has already been assessed for allocation disputes, there technically isn’t a dispute response opportunity for merchants. Instead, the response is considered pre-arbitration.

NOTE: For allocation disputes, we do encourage you to advance the case to pre-arbitration since it is your one and only chance to prove your case. In these situations, gather up all your available compelling evidence — just like you would for any other chargeback — and respond to the dispute.

Pursuing pre-arbitration for allocation disputes does not automatically advance the case to arbitration (this is a common myth that is, fortunately, not true!). You are the one to decide if an allocation case should advance to arbitration — not the issuer. So you won’t have to pay any additional fines for simply stating your case through pre-arbitration.

Want to learn more? Check out this article on the Midigator blog. It provides a detailed overview of the two workflows and why Visa has opted for this strategy.

We know how complex fighting chargebacks can be. That’s why we’re here to help at every step along the way. Reach out to our support team if you have any questions. You can use the live chat in Midigator or email

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