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A dispute is a situation that arises when your customer or the issuing bank questions the validity of payments. It could arise due to reasons such as unauthorized charges, failure to deliver the promised merchandise and excessive charges levied by the business.

Dispute Phases#

A dispute can belong to any of the following phases:

  • Fraud: A dispute raised by the bank when it suspects a transaction to be fraudulent based on the risk analysis.
  • Retrieval: A request initiated by the customer with their issuer bank for additional information about a transaction. This is essentially a "soft" chargeback.
  • Chargeback: A refund claim initiated by the customers with their issuer banks. In such cases, the bank starts an official inquiry.
  • Pre-Arbitration: A chargeback that you have won is challenged by the customer for the second time.
  • Arbitration : A chargeback that you have won is challenged for a third time by the customer and the card networks directly get involved. These disputes are usually very expensive.

The pre-arbitration and arbitration phases are usually long-drawn, complicated and challenging. It is advised to take remedial action during the retrievals and chargebacks phases itself to avoid further complications.

Dispute Statuses#

A dispute can have any of the following statuses:




Indicates that the dispute has been created.

Under Review

Indicates that the dispute is being reviewed by the issuing bank.


Indicates that the bank has accepted the remedial documents and you have won the chargeback.


Indicates that the bank did not accept the remedial documents and you have lost the chargeback.


Indicates the state when a fraudulent transaction is closed after you provide details of the transaction or make a refund to the customer. This is seen in fraudulent transactions only.

Disputes Process Flow#

A typical flow for a dispute is as follows:

  1. A dispute is always raised by the issuing bank. However, it can be initiated by the customer as well.

    1. Initiated by the issuing bank: The issuing bank suspects a fraudulent transaction and asks for your justification.
    2. Initiated by the customer: The customer claims that the transaction was unauthorized and raises it with the issuing bank.
  2. You will be notified about the dispute and can select from the following actions:

    1. Accept the dispute so the customer is refunded. In the case of a fraud, you must refund the amount. In other cases, Razorpay will auto-refund the amount.
    2. Contest the dispute by submitting relevant documents to prove that the transaction was fair.
  3. If you contest, the documents are sent to the customer’s bank. The bank reviews the case and provides a verdict.

  4. If you lose the dispute, the amount would be deducted from your account and is sent to the customer.

Disputes in International Payments:
For disputes raised against international payments, the amount deducted from your account will be based on the currency conversion rate of the day when the disputes were created. The currency conversion rate is dependent on the rate charged by processing banks. This conversion rate may vary from that on the day when the payments were created.

Submit Evidence#

If you are contesting a dispute, you may have to submit the following proof of evidence as required:

  • Explanation letter from you
  • Customer's recall letter
  • Order or service confirmation
  • Refund confirmation
  • Order or service cancellation
  • Delivery proof
  • Shipping proof
  • Access activity log (any server or activity logs which prove that the customer accessed or downloaded the purchased digital product)

This list is not exhaustive and the actual evidence required will depend on the customer's issuing bank.


Notifications are sent when disputes are created. These notifications are in the form of:

  • Emails
    You will receive an email notification when a dispute is created. The email contains details of the transaction, amount and cause of dispute.
  • Webhooks
    You can subscribe to Webhook events to receive alerts whenever a dispute is created or there is a change in status.