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Chargeback Ratio Meaning

The chargeback ratio is a metric used by payment processors and card networks to measure the frequency of chargebacks relative to total transactions for a merchant. A chargeback occurs when a cardholder disputes a transaction and the issuer reverses the payment. This ratio is calculated by dividing the number or amount of chargebacks in a given period by the total number or amount of processed transactions.

A high chargeback ratio can indicate issues such as fraud, poor customer service or misrepresentation, and may lead to higher processing fees or merchant account termination. Card networks establish maximum allowable ratios—often around 1 % of total transactions—and monitor merchants for compliance.

Merchants can manage their chargeback ratio by using clear billing descriptors, providing responsive customer support, implementing fraud detection tools and maintaining accurate product descriptions. Reducing chargebacks helps preserve revenue and maintain access to payment processing services.

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Important Disclaimer:

Finery Markets BVI Limited (“Finery Markets”) provides software, technology infrastructure, and related Information and Communication Technology (ICT) services on a Software-as-a-Service (“SaaS”) basis. Finery Markets acts solely as a software vendor and does not operate a trading platform, does not intermediate, match, execute, clear, or settle transactions, and does not engage in any activities that would require regulatory authorisation under applicable laws.

Finery Markets’ software is non-custodial and is provided exclusively to licensed institutional entities that act as independent operators of their own environments. All counterparties are solely responsible for establishing and maintaining their own bilateral trading and settlement relationships. Finery Markets is not a party to any such arrangements and assumes no responsibility for the conduct, verification, or compliance obligations of any users of the software.

Nothing on this website shall be construed as a financial promotion, investment advice, or an offer to engage in regulated activities. Access to and use of the software is strictly limited to clients who have entered into a software licensing agreement with Finery Markets. Persons located in jurisdictions where such access is restricted should not rely on this website or any of its contents.

Additional notice to UK visitors: This website and associated communications are not intended to constitute a financial promotion under The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) and related guidance. Access to services provided by Finery Markets is limited to regulated entities, professional clients and eligible counterparties as set out by the Financial Conduct Authority. UK users are not permitted to use this website for the services of Finery Markets if they don't fall within these categories.