Among these is the separation of operators’ accounts, a topic outlined in SPA/MF Normative Ordinance No. 615. Betting platforms will be required to maintain two accounts: a transactional account and a proprietary account. The transactional account will hold the funds deposited by users and will be used for bettors’ withdrawals. The proprietary account should only be used for operational expenses and liquidity management. Importantly, both accounts must be held at financial institutions authorized by the Central Bank of Brazil.

Why Is This Separation Important?

Liquidity is a critical factor for any betting operator. When offering betting options, an operator may experience periods of financial loss if bettors achieve positive outcomes in their wagers. Liquidity management, which is thoroughly detailed in a dedicated chapter of the Ordinance, ensures the company always has sufficient funds to pay users, even in hypothetical scenarios where all users decide to withdraw their winnings simultaneously.

This is why separating transactional and proprietary accounts is crucial. Funds deposited by consumers must not be mingled with those used to cover the company’s operational expenses, such as employee salaries. This ensures that the funds remain available for potential withdrawals. Additionally, the Ordinance specifies that operators must implement measures to “manage their exposure to liquidity risk,” as outlined in Article 8, which lists the following policies:

“I – establishing, in an objective manner, a methodology for calculating exposure limits;
II – providing processes to measure, monitor, and mitigate liquidity risk exposure across different time horizons, including intraday; and
III – including a contingency plan detailing additional funding sources, responsibilities, and procedures for managing liquidity stress situations.”

One potential additional funding source is the company’s proprietary account. In liquidity stress situations, as defined by the law, the proprietary account may be used to pay users. However, the reverse—transferring funds from the transactional account to the proprietary account—is prohibited. Additionally, each betting platform is required to maintain a financial reserve of R$ 5 million to ensure payouts to users in extreme cases. Since these accounts must be with institutions authorized by the Central Bank, the government can take action regarding these funds if guidelines are violated—a process that would be far more complex with accounts held abroad.

How Does This Impact You?

The regulations for Brazil’s regulated sports betting market will take effect on January 1, 2025. From that date forward, licensed operators must comply with these account separation rules, keeping client funds secure and ensuring greater safety for users.

For those with existing balances on betting platforms, transitioning to meet the new rules may provide an additional layer of protection for your funds. One recommended approach is to withdraw your funds from the platform before the end of the year and, if desired, redeposit them in 2025, once the new regulations are in place. This ensures your funds will be safely held in the separated transactional account, under the oversight of the Central Bank.

The process is straightforward and can be made even easier with LATAM Bank, a digital wallet specialized in gaming, offering several benefits.

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According to research by Future Market Insights, the cryptocurrency wallet market reached $1.5 billion in revenue in 2023 and is expected to grow to $3.6 billion by 2033, with an annual growth rate of 9.3%. The report also states that cryptocurrency wallets represent nearly 25% of sales in the total crypto market. Understanding the differences between a hot wallet and a cold wallet is essential for anyone who wants to store cryptocurrencies securely and find the best method suited to their profile.

What is a Hot Wallet?

A hot wallet is a digital cryptocurrency wallet that remains connected to the internet. It allows quick and easy access to cryptocurrencies and is widely used by traders and users who conduct frequent transactions. Hot wallets can be accessed via mobile devices and computers. Additionally, some hot wallets offer integration with exchanges and trading platforms, further facilitating asset transfers.

However, this ease of access comes with a cost: vulnerability to cyber-attacks. Since they are connected to the internet, hot wallets are more susceptible to hacking, phishing, and other types of scams. The security of these wallets largely depends on the protection measures used by the platform or app, such as two-factor authentication (2FA), strong passwords, and other security barriers, along with responsible user behavior.

According to a CoinGecko survey from 2023, the top 55 hot cryptocurrency wallets recorded over 81.1 million installations. Android installations accounted for most of this number, totaling 61.6 million, while 19.55 million installations were recorded on major internet browsers.

What is a Cold Wallet?

A cold wallet is a storage method that does not rely on an internet connection, providing an additional layer of security and making it less vulnerable to cyber-attacks. Cold wallets are ideal for those who plan to store assets for long periods without the need for frequent access.

There are various types of cold wallets, the most common being hardware wallets and paper wallets. Hardware wallets are physical devices, such as USB drives or specialized devices for storing private keys. Paper wallets consist of recording private and public keys on a piece of paper, with no digital connection to the internet.

Data from Cognitive Market Research estimates the cold wallet market at $1.6 billion in 2024, with an expected annual growth rate of 9.80% through 2031. North America represents 40% of the market, while Europe accounts for 30% of industry revenue. Latin America holds a 5% share of the current total market but also has a significant projected annual growth rate of 9.2%.

Advantages and Disadvantages

The main advantage of hot wallets is convenience. They are ideal for quick, daily transactions, and being always connected, they allow immediate access to funds. Additionally, most hot wallets are user-friendly, making them a great option for newcomers to the cryptocurrency world. On the downside, the main disadvantage is security. Internet connectivity makes these wallets more vulnerable to breaches and data theft, so they are not recommended for storing large amounts of crypto assets.

For cold wallets, the primary advantage is security. Since they are not connected to the internet, they are significantly more protected from cyber-attacks. This type of wallet is ideal for the long-term storage of large amounts of cryptocurrency, providing peace of mind to investors. The main disadvantage is the lack of convenience for those needing quick access to their assets.

In cases where the user wants to conduct daily transactions, using a cold wallet may become inconvenient. Additionally, physical loss is another factor to consider, especially with paper wallets. If the paper with private keys is lost or destroyed, access to the cryptocurrencies becomes impossible. Similarly, in the case of hardware wallets, losing or damaging the device can result in loss of funds if there is no backup of the keys.

Which to Choose?

Choosing between a hot wallet and a cold wallet depends on the user’s profile and needs. If you conduct daily transactions and need quick, easy access to your assets, a hot wallet may be the best option. However, it’s always important to keep only a limited amount in hot wallets to minimize the risk of loss in case of attacks.

On the other hand, if you’re a long-term investor planning to store your cryptocurrencies securely for an extended period without needing frequent access, a cold wallet will be the safest choice. Many investors opt for a hybrid approach, using a hot wallet for daily transactions and a cold wallet for securely storing the majority of their assets.

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What are altcoins?

The term “altcoin” is short for “alternative coin” and is used to describe any cryptocurrency other than Bitcoin. The numbers are impressive. For instance, on CoinGecko, nearly 15,000 cryptocurrencies are listed, with a total market capitalization of nearly $2.5 trillion (data recorded on October 19, 2024). Data also shows Bitcoin dominance at 55.14% of the total, with a market cap of $1.34 trillion. In other words, altcoins represent nearly half of the total cryptocurrency market on the reported date, though this percentage varies over time.

It’s clear that most of these coins have little impact or long-term success. However, some altcoins have stood out and gained traction among industry enthusiasts. Each aims at different purposes, functions, and technological innovations. Some altcoins try to improve on Bitcoin’s technical aspects, such as transaction speed and costs, while others focus on entirely new functionalities.

Types of altcoins

There are various types of altcoins. One of the most popular is stablecoins, whose value is tied to a stable asset and has been discussed in an article here on StarsPay. In October 2023, a report by the Brazilian IRS recorded the growth of “stablecoin” use in Brazil. With the largest market capitalization among stablecoins, Tether had over R$271 billion traded in the country since 2019, compared to R$151 billion for Bitcoin.

Another type of altcoin includes mining-based currencies, such as Bitcoin. Participants, known as miners, validate blockchain transactions and receive coins in return, with Litecoin being a well-known example. Tokens have also become popular, both utility and governance tokens. In the case of utility tokens, the Ethereum network is a prime example, as tokens can be used across various decentralized applications, known as “dApps,” that may include games, financial platforms, and more. Governance tokens, meanwhile, allow holders to vote on project decisions, with decentralization as one of their key advantages.

Perhaps the most well-known example of altcoins among the general public is meme coins. As the name suggests, these coins are inspired by internet memes or jokes, gaining support through viral campaigns and promotion by celebrities and influencers. The leading example by far is Dogecoin, known by its ticker DOGE. According to CoinMarketCap data on October 24, 2024, DOGE ranks as the eighth-largest cryptocurrency, with a market capitalization of over $20.5 billion.

Advantages and Disadvantages of Altcoins

As we’ve seen, altcoins are highly diverse, ranging from serious projects that have gained traction in the global financial market to digital currencies created as a joke with little relevance. Among the advantages of alternative coins are technological innovations that aim to make processes faster, easier, and cheaper. In the case of Ethereum and its smart contracts, for example, the creation of decentralized applications has opened up a new and promising area of digital exploration. According to data from Reports and Insights, the dApps sector reached $31.2 billion in 2023 and is expected to grow at 22.2% annually through 2032, reaching $139.6 billion.

On the other hand, it is essential to be cautious when dealing with altcoins. Smaller projects tend to be even more volatile, with sharp value swings in short periods. As such, the promise of large profits overnight can quickly turn into significant losses. Another downside is security; as many projects are relatively new and less tested, some altcoins may have security flaws or become hacker targets. According to blockchain analytics company Chainalysis, over $1.7 billion in cryptocurrencies were stolen in 2023.

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Want to get in touch with StarsPay’s team of specialists? Check out our contact page.

In addition to a team of specialists who will help your business with security, agility, and the best rates, one of StarsPay’s highlights is its support service, offering elite-level service. We understand the importance of good customer service, which is why our support agents are available 24 hours a day, 7 days a week, ready to answer your questions and resolve any issues that may arise.

It is very easy to contact StarsPay support, which offers bilingual service in both Portuguese and English. There are two ways: send an email to starspay@http:\/\/34.45.239.84 or visit our contact page There, you just need to fill out a form with your details and message, and you will receive a response from our customer service team as soon as possible.

Other Benefits

A highly qualified team and efficient support are just some of the benefits you will enjoy as a StarsPay customer. We work to assist your business by providing fraud prevention for local transactions, measures for the important zero chargeback, and the best exchange rates. We also ensure strict compliance with KYC regulations, protecting your operations and your customers.

With fast and simple integration and no need for a local entity, you can connect with your consumers in their local currency across various locations in Latin America. Using our smart API, you can offer the main payment options while receiving funds in your local currency, directly into your bank account, quickly and securely.

Contact the StarsPay sales team now at starspay@http:\/\/34.45.239.84 and find out how we can make a difference for your business.

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Want to resolve the main complaints from consumers and increase your conversion rates? Get in touch with StarsPay.

However, there’s an aspect of the user experience that cannot be overlooked and has a direct impact on business results: the payment page. This is the moment when the customer’s initial choice is converted into a purchase. Offering the consumer a secure, simple, and fast experience is essential in this process. After all, attracting a customer to your page, getting them to select a product, but losing the sale at this final stage is disastrous for any company.

Reasons for abandonment

Customer abandonment after adding items to their online “shopping cart” is more common than it seems. A study by the Baymard Institute, which gathered data from 49 different studies conducted between 2012 and 2023 on eCommerce cart abandonment, found that the average abandonment rate is 70.19%, more than two-thirds of the total. The study highlights that a large portion of cases results from natural buyer behaviors. “Many users are simply browsing products, comparing prices, saving items for later, exploring gift options, etc.,” the study says.

Among online shoppers in the United States, 48% abandoned a cart simply because they did not intend to purchase at that moment, even before starting the payment process. On the other hand, examining other reasons cited by consumers for abandoning a purchase provides valuable insights for companies that want to reduce sales losses at this stage. The institute also provided qualitative data on abandonments, excluding those who had no intention of buying in the first place.

The main reason cited by users, mentioned 48% of the time, was high extra costs, such as delivery, taxes, and fees. In other words, the customer is willing to pay the price initially displayed for the product, but is surprised at the final stage by a higher-than-expected cost. A solution for companies would be to offer more transparency in the process, making it clear from the start any fees and additional charges that may be involved in the purchase. The option “I couldn’t see/calculate the total cost of the order upfront” reinforces this need, chosen by 21% of respondents.

It’s important to note that since each customer can cite more than one reason, the total percentage exceeds 100%. The second reason concerns the practicality of the process, with “the site wanted me to create an account” being cited in 26% of cases, adding an extra step that the customer may not be willing to take. Especially if account creation requires providing a lot of personal data and is followed by a flood of unsolicited emails and contacts. Chosen in 22% of cases, the option “payment process was too long/complicated” also shows how much users value convenience.

In third place, there’s a concern with security, described as “I don’t trust giving my credit card information.” This figure reflects a necessary concern among customers regarding data privacy, in a context where fraud has become increasingly common. At the same time, this information highlights the importance of offering a variety of payment methods for users. Pix in Brazil and SPEI in Mexico are examples of local alternatives that have become essential for serving consumers in these countries. The option “there weren’t enough payment methods” even appears on the list, cited by 13% of the survey participants.

Also in the top 10 are reasons such as “delivery was too slow,” “the site had errors/crashed,” “my card was declined,” and “the return policy wasn’t satisfactory.” This last one also involves chargeback, a highly important issue for the industry. While customers are concerned about the ability to return a product that doesn’t satisfy them, for retailers, the process also carries a risk of fraud. For both parties, understanding the chargeback process helps avoid further frustration.

Payment conversion rate

A key metric for analyzing the success of your payment page is the payment conversion rate. It is calculated by dividing the number of completed purchases by the number of people who initiated the payment process. By multiplying the final number by 100, you get the percentage of people who completed the purchase. A low number may indicate that there are issues in this process, for one or more of the reasons discussed above.

Increasing the conversion rate directly impacts a company’s revenue. At the same time, optimizing a payment page may involve simple, less costly changes compared to investments in marketing, for example. Below are some possible options to increase the conversion rate:

• Allow purchases without the need to create an account
• Offer multiple payment options
• Have a clear layout, with transparency about costs, fees, and delivery times
• Optimize the page for mobile devices
• Minimize distractions and avoid extensive forms that may deter consumers

These are just a few examples of how to improve a payment page and, consequently, conversion rates. While it’s impossible to prevent all customers from abandoning the purchase process for various reasons, even a 1% improvement in conversion can lead to significant growth for a company.

Support from StarsPay

StarsPay specializes in payment processing across four areas: iGaming, Games, eCommerce, and Exchanges. If online shopping cart abandonment is something that’s hindering your business, we offer the opportunity to increase your conversion rates by addressing some of the issues highlighted in the Baymard Institute study. We operate in five countries (Brazil, Mexico, Colombia, Chile, and Peru), with specialists who can help you provide essential payment methods for each population.

Additionally, we work to achieve zero chargebacks for our clients, offering the best exchange rates, bilingual support 24/7, and a fraud prevention system for local transactions. All of this ensures that your customers can go through the process in a simple, fast, and secure manner—three aspects that the numbers prove are crucial for completing the sale as efficiently as possible.

Contact the StarsPay commercial team now at starspay@http:\/\/34.45.239.84 and find out how we can make a difference for your business.

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Do you work with cryptocurrency exchanges and want to optimize your payment area? Get in touch with StarsPay.

As with anything involving large financial sums, it’s always important to emphasize the need for security measures to avoid falling victim to online fraud. StarsPay works with cryptocurrency exchanges, providing financial services to these companies, supporting transactions in multiple currencies, and standing out for its strong security processes.

Below are the top five cryptocurrencies by market capitalization, according to CoinMarketCap data accessed on October 14, 2024.

Bitcoin (BTC)

The first and most well-known cryptocurrency in the world, Bitcoin has a market cap of over R$7.3 trillion. The currency was created in 2009 by an individual or group of people under the pseudonym Satoshi Nakamoto. It operates on a decentralized network called blockchain, which publicly and securely records all transactions. Bitcoin’s goal is to be a form of digital money without the need for intermediaries, such as banks or governments. Due to its anonymous nature, it’s impossible to know precisely how many people hold Bitcoin in their digital wallets and/or exchanges, but an estimate from the website BiTBO puts this number at over 100 million people.

Ethereum (ETH)

Launched in 2015 by Vitalik Buterin, Ethereum currently has a market capitalization of over R$1.7 trillion and operates differently from Bitcoin. Rather than being primarily used as a digital currency, Ethereum was designed as a platform for creating smart contracts and decentralized applications (dApps). Its network allows developers to create new tokens and run complex projects based on blockchain technology. As such, the ETH network is the foundation upon which many alternative digital currencies (the so-called “alts”) were built. According to data from Bitwise, the ETH ecosystem saw a significant jump in daily users in early 2024.

Tether (USDT)

The third-largest market cap belongs to Tether, known by its symbol USDT, currently representing almost R$670 billion. It also differs from Bitcoin and Ethereum because it is a stablecoin, meaning its value is tied to a stable asset—in this case, the US dollar (USD). USDT is widely used in exchanges as a reference currency for trading against other cryptocurrencies. In this way, it’s possible to avoid the volatility of the crypto space while keeping funds in digital currencies, making it more convenient for new trades.

BNB (Binance Coin)

BNB is the native token of Binance, one of the world’s largest cryptocurrency exchanges, with a current market capitalization of R$480 billion. The coin was launched in 2017 as an ERC-20 token on the Ethereum network but later migrated to Binance’s own blockchain, known as Binance Smart Chain (BSC). The primary uses of the cryptocurrency are within the exchange’s ecosystem, such as paying discounted transaction fees on the platform and participating in token sales. In 2024, Binance celebrated reaching 200 million users on its platform.

Solana (SOL)

Solana is a high-performance blockchain platform focused on scalability, with a current market cap of R$411 billion in its native token, SOL. Launched in 2020, Solana is a network aimed at smart contracts and dApps, similar to Ethereum, but with a greater focus on efficiency, standing out for its speed and low transaction costs. In June 2024, the company announced an investment of over R$5 million in Brazil to support content creators and educators in the crypto space.

The future of the crypto market

Now that you know more about the leading cryptocurrencies used worldwide, it’s easier to understand the versatility involved in the digital currency market. Different blockchains and platforms have distinct areas of focus. They can bring more speed, security, and convenience to processes that were once complex, such as cross-border payments, and enable the creation of new technologies that integrate into the digital financial world to make life easier for users.

Additionally, the market capitalizations mentioned provide a broader understanding of the size of this universe, which is not expected to slow down anytime soon. New technologies and investments are made daily, helping to spread the concept that digital currencies go beyond mere speculation—they can generate real benefits for people.

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Are you involved in iGaming? Contact the StarsPay commercial team and learn about all the benefits we offer.

The regulated fixed-odds betting market will officially begin in the country on December 1, 2025. However, from October 1, only companies that received pre-authorization from the Ministry of Finance can continue operating in Brazil. The list of approved operators includes 96 companies and a total of 210 brands (each company could register up to three brands under the license).

For operators not listed in the government’s announcement, the deadline for keeping their websites online was until October 10, solely to allow Brazilian customers to withdraw their deposited funds. After this period, the National Telecommunications Agency (Anatel) began the process of blocking over two thousand sites considered irregular.

Following legal recommendations, StarsPay had also announced that it would cease its services for companies that did not obtain government approval. By December, SPA/MF is expected to complete the analysis of requests made so far, determining which sites will be licensed to operate legally starting in 2025. Companies that continue to provide services to Brazilian players illegally will face severe penalties, with fines reaching up to R$ 2 billion.

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The term can be translated as “stable currencies” and refers to a type of cryptocurrency designed to maintain a stable value over time, making it easier to use for transactions. While some people use cryptocurrencies as an investment, trying to exploit price variations on exchanges for gains, others prefer to use the technology of digital currencies for their speed, convenience, and security without having to worry about high volatility.

How do stablecoins work?

To achieve price stability, stablecoins are pegged to a stable asset, which can be commodities like gold or fiat currencies such as the dollar or euro, for example. The main example is Tether, known in the cryptocurrency world by the symbol USDT. Currently, it is the third-largest cryptocurrency by market value, with around $120 billion, trailing only Bitcoin and Ethereum (ETH).

In the case of USDT, the digital currency is pegged to the US dollar. This means that for every stablecoin in circulation, there is a corresponding reserve in fiat currency. As a result, the value of 1 Tether remains close to $1, offering several advantages for those who want to use cryptocurrencies in digital transactions. Another similar stablecoin is USD Coin, symbol USDC, which also uses the US dollar as backing and has the sixth-largest market value, with $34.8 billion.

What are stablecoins used for?

Imagine a merchant who wants to buy and sell using cryptocurrencies but only deals with Bitcoin. From one day to the next, they could experience significant price changes in their products and contracts with suppliers. A product sold today but delivered in three days could have a completely different final value. Besides managing their business, this merchant would need to constantly monitor Bitcoin prices to find the best moment for transfers.

It’s easy to see why this situation would be a nightmare in terms of organization, planning, and cash flow. However, many people want to enjoy the inherent advantages of digital currencies without performing all this “juggling.” In this case, stablecoins serve as a valid alternative. Since they maintain a nearly stable value relative to a known asset, they allow transactions to be made with stability. With stablecoins, cross-border transfers, can be made without using traditional banking systems.

In addition to being a faster method, they avoid losses from constantly paying exchange rate fees and can later be converted into fiat currencies or other cryptocurrencies. Another important function is in unstable economies, where inflation may erode citizens’ purchasing power. Using USDT or USDC, users can keep their savings pegged to the value of the dollar and protect themselves from this variation. Moreover, stablecoins play a crucial role in the decentralized finance (DeFi) ecosystem, where they are used in platforms for loans, liquidity, and other innovative financial services.

Conclusion

The technology behind cryptocurrencies is here to stay, and its adoption has surged worldwide over the past 15 years. At the same time, not everyone is willing to deal with the high volatility present in major digital currencies. In this context, stablecoins represent something many people seek when it comes to their finances: stability. They bring new opportunities and facilitate transactions, especially international ones, becoming part of the future of the crypto market. It is worth noting that, although blockchain technology is secure, it is also up to users to take the necessary precautions against online fraud.

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Do you work in the world of cryptocurrencies and want assistance from experts? Click here and contact StarsPay.

The growth of exchanges has facilitated the buying and selling of cryptocurrencies, which have proliferated during this period. Additionally, public education about how digital currencies work has helped establish this technology as a viable alternative to traditional payment methods. In sectors and establishments where cryptocurrencies are accepted, including several in eCommerce, users enjoy various advantages when choosing this method. Check out some of these advantages below:

Speed

In Brazil, for example, Pix stands out as a safe and instant financial transfer method, moving billions of reais, similar to what happens with SPEI in Mexico. However, in other countries and situations like international banking operations, speed is an advantage for cryptocurrencies. Instead of waiting for days, a transaction can be completed in seconds or minutes, depending on the network used, even if it involves two or more different countries.

Decentralization

This is one of the key aspects that governs the world of cryptocurrencies and, consequently, generates many of the other advantages of using digital currencies. Through blockchain technology, the functioning of “cryptos” does not depend on a central entity, as is the case with traditional methods. Transactions do not go through a single regulatory institution, giving users more autonomy. This can be especially important in countries with authoritarian regimes or strict financial regulations, where there is greater control over access to the banking system, allowing for more economic freedom.

Transaction Costs

Another area where cryptocurrencies stand out is transaction costs. Again, this depends on the currency and network chosen and needs to be analyzed on a case-by-case basis. However, in general, the fees charged for cryptocurrency transfers are lower than traditional banking fees, especially in situations where a banking intermediary is required. The difference is even more significant in transactions involving different currencies, where traditional methods also tend to incur exchange fees.

Security

In traditional banking methods, like credit cards and Pix itself, there are plenty of fraud methods, through which scammers can obtain sensitive data and cause significant financial harm. In the world of cryptocurrencies, as with any area involving money, users must also take precautions. Avoiding sharing confidential information and being cautious of viruses and phishing attempts are some of the points that require attention.

The technology, on the other hand, is highly secure and employs encryption to protect data. Since transactions occur on the blockchain, they are immutable, meaning they cannot be forged. Additionally, the system is decentralized. This means that a hacker attack could not obtain the information of a vast number of clients all at once, as can happen with traditional methods, where a central point exists.

Privacy

One aspect that also attracts people to using cryptocurrencies is the privacy that the method allows. Users are identified only through addresses, and there is no need to share personal information, as would be the case with a traditional bank. In a context where protecting one’s own data is increasingly important, the use of digital currencies can help users safeguard their financial privacy.

Global Reach

To make cryptocurrency transactions, a person only needs access to the internet and a smartphone, for instance. Thus, this model of transaction has the potential to reach more people than the traditional banking system, which, despite its global scale, still does not reach the entire population. This allows for the inclusion of more people in a global transaction network, facilitating the transfer of funds between different countries and bringing more convenience to the process.

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Want to know how to reduce chargebacks in your business? Get in touch with StarsPay.

We’ve already discussed the main causes of chargebacks and the numbers involved, but do you know how this process works in practice? It can happen in up to three cycles, involving the card-issuing bank, the acquiring bank (which processes the card transactions), the merchant, and the customer.

First cycle

• The credit cardholder initiates a dispute. The time frame for filing a request usually ranges from 45 to 180 days, depending on the card.
• The card issuer contacts the payment processor, who informs the merchant about the dispute. At this point, the consumer receives a temporary credit for the transaction amount.
• The merchant can accept the chargeback. In this case, they will lose the transaction amount, the temporary credit will be confirmed in the customer’s account, and the process will end.
• If the merchant disagrees with the dispute, they can submit evidence proving that the service/product was delivered satisfactorily. This can include photos, delivery receipts, invoices, and communications with the customer. At this stage, the merchant also receives a temporary credit in their account for the disputed transaction amount.
• After reviewing the customer’s request and the merchant’s evidence, the card issuer decides whether the chargeback is valid. If the decision is in favor of the merchant, the temporary credit in their account becomes permanent, and the customer will be charged for the transaction on their bill. If the decision favors the customer, the credit in the customer’s account becomes permanent, while the temporary credit to the retailer is reversed.

Second cycle

The second chargeback cycle occurs when there is a new dispute over the same transaction. This can happen due to new information provided by the customer or a change in the reason for the dispute, for example. The process is similar:

• The card issuer informs the acquiring bank about the new chargeback.
• Again, the merchant has the option to accept or challenge the request. If they challenge it, they have another opportunity to provide more evidence to support their case.
• The card issuer makes a new decision. If it favors the merchant, the charge is confirmed for the customer. If the decision favors the customer, the retailer must pay the chargeback amount and the process fees, while the buyer’s temporary credit becomes permanent.

Third cycle or arbitration

Arbitration is the final stage of a chargeback process. At this point, the evidence from both parties is presented to a card association, which will make the final decision to resolve the dispute. The association is an organization that banks are part of, agreeing, among other things, to follow the rules in arbitration processes.

However, it’s important to note that it’s rare for a chargeback case to reach this point. This is because the fees charged by associations to analyze each case are high, as well as the time and effort involved. Therefore, merchants and banks typically only escalate to this final stage if the transaction in question is of significant value. After the association’s decision, the losing party is responsible for paying the fees.

Conclusion

Understanding the chargeback process better makes it clear that the best protection for a merchant is to be equipped with as much evidence as possible. This way, if a dispute arises, they’ll have a better chance of proving that the service or product was delivered satisfactorily. Beyond the financial loss, receiving too many chargeback requests can harm a retailer’s reputation with credit card companies.

From the customer’s perspective, there are, of course, those who exploit the process maliciously, seeking to gain an advantage, such as a refund for a product that was correctly delivered. However, it’s important to emphasize that the chargeback mechanism increases consumer trust in online purchases, as they know they have an extra layer of protection in case of issues. Researching a seller’s reliability and taking simple online security measures is also essential.

Get in touch with the StarsPay sales team now via email at starspay@http:\/\/34.45.239.84 and find out how we can make a difference for your business.

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