Travel Payment 101:
Chargeback Services

Let’s start with the basics: what are chargebacks?

Put simply, chargebacks occur when a customer requests the reversal of a credit card transaction. In this case, both the credit card issuer and the merchant bank review the claim, a process that could take weeks. Businesses suffer not only from delayed revenue from the transaction, but also an interruption in cash flow and losses associated with chargeback management costs.

The reasons a customer might reverse a credit card transaction can be either legitimate or fraudulent. But it can be difficult to differentiate motivations, as consumers’ attitudes toward chargebacks have become increasingly permissive. More than half of cardholders admitted to filing a chargeback without trying to contact the merchant first, and 52% of customers skip contacting merchants about issues altogether and file chargebacks directly. Eighty-four percent of customers feel chargebacks are more convenient than contacting merchants directly, and 72% don't know the difference between chargebacks and refunds.

While stemming the tide of consumer sentiment toward chargebacks may be an ongoing battle, merchants can take proactive steps to minimize fraudulent chargebacks, which are substantial and exceptionally costly.

According to the 2024 Chargeback Field Report, friendly fraud – when a customer knowingly disputes a legitimate credit card charge transaction – is now the second most common fraud attack source that merchants contend with, accounting for 79.03% of all chargebacks. Global eCommerce losses resulting from fraud have reached $48 billion annually, more than doubling from the $20 billion reported in 2021.

In 2025, merchants will lose $4.61 for every $1 lost to fraud – a 37% increase compared to five years earlier – due to added costs such as lost revenue from sales, cost of merchandise, chargeback fees, administrative fees, and the overhead of shipping and fulfillment. The average chargeback amount has increased from $165 in 2023 to $169.13 in 2024, though this is lower than earlier projections. As a result, Mastercard reports that money lost to chargebacks cost merchants an estimated $117.47 billion in 2023.

Why is chargeback fraud so prevalent? Partly because the payment dispute process can be opaque and difficult to discern between bad actors and good, but also because merchants have historically struggled with dispute resolution, winning on average only 45% of chargebacks they dispute.

But although chargebacks are a time-consuming distraction, treating them as an unavoidable business expense is a costly mistake; chargeback fraud and costs can be reduced with the power of Payment Orchestration.

As few industries face more complex fraud and chargeback challenges than travel, airlines and other travel merchants need highly sophisticated and adaptable tools that keep pace with high transaction volumes, cross-border payments, and rapidly shifting fraud tactics. That’s where Payment Orchestration can have a massive positive impact.

Payment Orchestration is a comprehensive, holistic approach to payments that helps merchants quickly identify suspicious activity and centralize their payment flows to allow fraud prevention and chargeback mitigation tools to work efficiently. Payment Orchestration also enables merchants to use another potent weapon in the fight against fraud and chargebacks: alternative payment methods (APMs).

Our Payment Orchestration Platform offers a powerful set of features to help merchants manage and reduce chargebacks effectively:

As Payment Orchestration experts with a dedicated chargeback solution, we arm our customers with the best defense against friendly fraud: the ability to identify and respond to illegitimate disputes and reverse chargebacks to recover lost revenue.

From checkout to chargebacks, Payment Orchestration gives merchants greater visibility and control across their entire payment ecosystem, helping them make smarter decisions and reduce risk. If chargebacks are cutting into your margins, Payment Orchestration offers a way to reduce losses, improve performance, and turn payments into a strategic advantage.