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About Disputes

Overview​

Highnote's Acquiring Disputes solution handles the merchant side of payment disputes. Highnote categorizes each dispute into one of four categories: consumer dispute, processing error, fraud, and invalid authorization.

A dispute begins when a cardholder contests a payment, and their bank (the issuing bank) sends a chargeback to the card network. The merchant can accept or challenge the dispute by presenting evidence.

A dispute can resolve at any one of five stages or escalate through representment, pre-arbitration, pre-arbitration response, and arbitration before reaching a final outcome.

Dispute categories​

Highnote disputes fall into one of four categories.

Contest consumer disputes and processing errors with an evidence questionnaire and supporting documents:

  • Consumer dispute: The cardholder recognizes the transaction but disputes what they received—for example, goods or services not received, defective or not as described, a cancelled recurring charge, or a refund never processed. Contest by answering the consumer dispute questionnaire and uploading supporting documents.
  • Processing error: The transaction was processed incorrectly—for example, an incorrect amount or currency, duplicate processing, or the cardholder paid by other means. Contest by answering the processing error questionnaire and uploading supporting documents.

Contest fraud and invalid authorizations with supporting documents only—no questionnaire needed.

  • Fraud: The cardholder claims they didn't authorize or participate in the transaction—for example, a stolen or counterfeit card, or activity flagged by the network's fraud monitoring program. Contest with supporting documents; there is no structured questionnaire.
  • Invalid authorization: The transaction was processed without a required or valid authorization—for example, authorization was declined or never obtained. Contest with supporting documents; there is no structured questionnaire.

Each category maps to a set of network reason codes and, where applicable, a category-specific evidence questionnaire. For network mapping, see Network reason codes.

Dispute stages​

Highnote surfaces each dispute as a CardPaymentDispute object that progresses through a sequence of stages:

  1. Chargeback: The cardholder disputes the transaction with their issuing bank.

  2. Representment: The merchant rebuts the chargeback with a second presentment of evidence.

    The first presentment is the acquirer's original transaction to the issuer for settlement.

  3. Pre-arbitration: Either party—issuer or merchant—challenges the dispute's current outcome.

  4. Pre-arbitration response: The party that did not initiate pre-arbitration responds, partially accepting the claim or contesting it.

  5. Arbitration: The card network reviews the case and makes a binding decision.

Highnote notifies you of dispute activity through the CARD_PAYMENT_DISPUTE_* family of webhook events. See Monitoring Disputes.

For the ways a dispute can resolve at each stage, see How disputes resolve.