Payment disputes arise when a cardholder challenges a transaction made with their card, and funds are returned to them. Cardholders may file a dispute up to 6 months post-charge, depending on the card scheme. Generally, this can be no more than 540 days from the date of the transaction.
Common reasons for disputes include:
The customer does not recognize the payment and suspect it is fraudulent
Services were not provided
Merchandise was not received
Disputes are an essential part of the payment ecosystem. They exist to protect customers from fraudulent transactions or undelivered goods, increasing global trust in online payments. However, they come at a cost to businesses due to fees and the effort required to manage them.
As a payment processor, Mamo can facilitate your responses to disputes, making it easy to submit evidence when needed.
How disputes work
Stage 1: A dispute is issued
A formal dispute is filed with the cardholder’s bank (the issuer) which then gets assigned a chargeback code, describing the type of dispute and reason why they are reversing the payment.
Once the dispute is issued, you will be notified by email, and you can manage the response via your Mamo dashboard.
The disputed amount plus a separate dispute fee of AED 110 immediately gets deducted from your account.
Stage 2: You respond to the dispute
Next, you need to decide how to respond to the dispute:
Accept: If you agree with the dispute and the specific reason given, you may accept the dispute. The funds will remain deducted from your account, and no other action is required.
Challenge: If you want to defend against the dispute, you will need to submit evidence to make your case. The card schemes will review the evidence and decide on the outcome of the dispute.
Ignore: If you ignore the dispute, it will expire after a certain amount of time and you won’t be able to respond to it.
Stage 3: Await the outcome
Finally, if you've decided to challenge a dispute and have submitted all your evidence, you await the outcome.
If you’ve won the dispute, the transaction amount will be credited back to you (excluding the dispute fee).
If you’ve lost the dispute, the funds will remain deducted from your account.
Mamo does not determine the outcome of disputes. Once all evidence has been submitted on your Mamo dashboard, the case will be reviewed by the relevant card schemes. These schemes—not Mamo—are solely responsible for evaluating and deciding dispute outcomes.
Dispute timelines
After a dispute is issued, you have 5-10 business days (depending on the scheme) to respond to the dispute, by either either Accepting, or Challenging the dispute. The time you have will be clearly communicated to you by us.
If you take no action after a certain amount of time, the dispute expires and is automatically lost
After submitting evidence, it takes 30-90 days for the card schemes to review and make a decision on the dispute. Once a decision is reached, it is final and the decision will reflect in your dashboard and you will receive an email notification.
Dispute impact on your settlements
If the disputed amount has not yet been settled by Mamo to your bank account, the amount will be withheld and released if the dispute is won.
However, if the amount has already been settled to you, then it will be withheld from your future settlement and released if the dispute is won.
Dispute fees
A dispute processing fee of AED 110 is applied to every single dispute you receive and is non-refundable, regardless of the outcome of the dispute.
Preventing disputes
Disputes can be challenging because charges for handling disputes and the resources that are required to manage them make it costly for businesses. Also, the rules are typically skewed in the cardholder’s favor, meaning your business practices need to work extra hard to ensure your products and services are received as intended.
While you can't eliminate them entirely, there are practical steps you can take to reduce the likelihood of disputes and minimize their impact on your business:
Add terms and conditions to payment links: Ensure customers accept your website or business terms and conditions before making a payment. This helps you in case of a dispute.
Make refund and cancellation policies clear: Display them prominently at the time of sale to prevent disputes and come to an agreement with your customer.
Confirm orders and communicate well: Keep customers updated about their order status. Share delays or changes early, and offer alternatives if necessary.
Provide accessible customer service: Make contact details easy to find and train your team to resolve issues quickly.
Use a clear business name: Ensure customers can recognize charges from your business on their bank statements.
Delay billing until shipment: Avoid charging before items are shipped to prevent non-receipt claims.
Capture proof of participation: Save signed delivery receipts, tracking info, course attendance, recurring subscription payments, feedback and confirmation of products and services received, or the customer’s IP address, description, date and time of download, if you sell digital services.
Cancel subscriptions promptly: Notify customers of the cancellation date and any terms.
See also: Responding to a dispute, and Managing disputes in your Mamo dashboard