A refund is when the merchant voluntarily returns money to the customer, including situations where the merchant believes the customer has been charged twice or when the customer is not satisfied with the service provided. It is initiated by the merchant and processed through the dashboard or API, with the refunded amount deducted from the merchant’s available balance. Chapa’s fees are not refunded, and no dispute or investigation is involved.

A chargeback, on the other hand, is a forced transaction reversal that does not come from the merchant. It is handled and processed by Chapa based on instructions from external authorities. Chargebacks occur when a customer disputes a payment with their bank, when the bank reverses the transaction after an investigation, or when a government or court orders the funds to be returned during a legal or fraud investigation. In all cases, the amount is automatically deducted from the merchant’s balance. Chargebacks are initiated by the customer’s bank or by a government or court order, and the merchant may be required to provide evidence during customer disputes. Chargebacks can also affect the merchant’s risk score and overall account standing.