Disputes Overview
Topics covered on this page
Sometimes, transactions don't run smoothly, and a cardholder files a dispute for a given charge, requesting the card issuing bank to reverse the paid amount. This is also called a chargeback.
🧾 Reasons cardholders file disputes
Some common reasons for cardholders to file a dispute include:
- The item was not received
- The item received was not as described
- The recurring charge was not canceled as requested
- The charge was duplicated, or the product/service was paid for by other means
These are all reasons for a commercial dispute — cases where the customer approved the charge but is not happy with the service provided or goods received.
If the cardholder did not authorize the charge (for instance, because the card was lost or stolen), it's called a fraud dispute. Fraud is one of the most common reasons for disputes.
Cardholders often initiate disputes. However, when it comes to lost or stolen cards, the bank may automatically file a dispute on behalf of the cardholder.
📋 Omise and merchant responsibilities
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🛡️ Fraud monitoring and control
Every charge processed by Omise is assessed, controlled, and monitored.
- Onboarding: Where fraud is more likely — for example, if you are selling items that can be resold easily — Omise requires cardholder authentication (3DS) for all charges.
- Pre-authorization: To ensure the customer has the card, Omise authenticates the card number using the card's CVV value and billing address, if available. For US, UK, or Canadian cards, this uses the Address Verification System (AVS).
- Tokenization: Omise tokenizes credit cards to reduce the risk of credit card numbers being disclosed, which could enable further fraud.
- In-transaction risk analysis: Omise analyzes multiple factors for all charges to determine if they are likely fraudulent. Depending on the analysis, this could block the charge or dynamically require 3DS. Charges blocked this way will show the error code
failed_fraud_check. The analysis considers factors such as:- Velocity check of charges from the same card, since criminals often reuse a stolen card rapidly to drain its available balance before it's blocked.
- Velocity check of charges from the same IP address or IP geolocation.
- Charge amounts that are higher or lower than expected.
- Risk scores based on transaction behavior analysis.
- Transaction review: Omise employs additional measures to detect potentially fraudulent charges after they've been captured. This ongoing review improves risk controls and thresholds over time, and can result in specific abusive cards or customers being blocked from using Omise. These measures include failure pattern detection and anomaly detection. Settings and thresholds vary from merchant to merchant and are set at the discretion of Omise. Settings are monitored and regularly updated.
❓ FAQ
What's the difference between a commercial dispute and a fraud dispute? A commercial dispute is when the cardholder approved the charge but is unhappy with the goods or service received. A fraud dispute is when the cardholder never authorized the charge at all — for example, because the card was lost or stolen.
Who decides whether to accept or decline a dispute? The merchant. Omise monitors dispute rates and provides tools and evidence-submission support, but the decision to accept or decline any individual dispute is the merchant's.
Does every merchant need 3DS on all charges? Not necessarily. Omise requires cardholder authentication (3DS) for all charges during onboarding specifically for merchants in higher-fraud-risk categories, such as those selling easily-resold items. Other merchants may not have this blanket requirement.
What is AVS, and when is it used? The Address Verification System (AVS) compares the billing address provided at checkout with the address on file with the card issuer. Omise uses it for US, UK, and Canadian cards as part of pre-authorization checks.
What happens if a charge is blocked by risk analysis?
It's declined with the error code failed_fraud_check.
