How do chargebacks work on international payments received in India?

A chargeback is the most common way money you have already received from a foreign client can be taken back. It mostly affects exporters who accept cards, such as an online tutor selling course packages, a SaaS company billing subscriptions, or a photographer selling prints and licences abroad. This guide explains how the process works, what the card network rules and RBI rules say, what providers charge, and what you can do.

What is a chargeback on an international payment?

A chargeback on an international payment, which Visa calls a dispute, is a reversal that starts when the cardholder questions a transaction with their own bank (the issuer), and the issuer sends it back through the card network to the merchant's bank or processor (the acquirer).¹ For an Indian exporter, the acquirer side is usually your payment gateway or cross-border payment aggregator, which then contacts you for evidence.¹

• Who handles it: Visa says disputes are handled between the issuer and the acquirer.¹
• Your role: Visa says a merchant's responsibilities are set out in its merchant agreement, so your contract with the provider decides when money is debited from you and how you respond.¹
• Who decides: the issuer decides under the network's rules.¹

A chargeback can reverse money that has already reached your account.¹

Who do chargebacks on international payments apply to?

Chargebacks on international payments apply mainly to exporters who accept foreign cards, and to some bank debit methods that let the payer pull money.¹⁸

Some bank payment methods can be reversed, depending on how the money was pulled or pushed.⁸⁹ If chargebacks are a concern for your business, ask each provider which of its collection methods can be reversed and for how long.

Why do foreign clients raise chargebacks?

Foreign clients raise chargebacks for fraud, authorisation problems, processing errors or service disputes, which Visa groups as Fraud (category 10), Authorization (category 11), Processing Errors (category 12) and Consumer Disputes (category 13).¹

For example, a client who sees an unfamiliar descriptor for a design retainer may dispute it as fraud.¹

How should an exporter respond to a chargeback?

An exporter responds to a chargeback by giving the provider evidence that answers the specific dispute reason, before the deadline the provider gives.¹

1. Read the reason. Visa says the reason code decides what evidence is relevant.¹
2. For "not received" disputes, show the service was delivered or made available as agreed: delivery emails, file-sharing logs, signed-off milestones or login records.¹
3. For fraud disputes, show the cardholder was the client: prior undisputed payments, matching device or IP data, and authentication records. Visa's Compelling Evidence 3.0 looks at earlier undisputed transactions on the same card, processed within the 365 days before the disputed one and generally more than 120 calendar days before it.¹
4. For "not as described" disputes, send the signed scope, the brief and the client's acceptance.¹
5. Refund instead when the claim is fair. Visa suggests refunding legitimate requests quickly to avoid a formal dispute.¹

Visa also notes that a fully authenticated 3-D Secure transaction (ECI 5) can qualify for protection from fraud-related disputes.¹ Ask your provider whether your checkout uses it.

What time limits apply to chargebacks under the Visa Rules?

Under the Visa Core Rules dated 18 April 2026, an issuer can raise a condition 10.4 card-absent fraud dispute within 120 calendar days from the transaction processing date.²

Mastercard and other networks publish their own rules, and your provider applies whichever network the card belongs to.¹ Ask your provider for the dispute timelines that apply to your account.

What happens to export paperwork after a chargeback?

After a chargeback, the export value you invoiced may not be fully realised, which brings in the FEMA and GST rules.¹⁰¹¹

• Realisation: the FEMA (Export and Import of Goods and Services) Regulations, 2026 require the full export value to be realised within nine months from the invoice date.¹⁰
• Reduction in value: your AD bank can allow a reduction in the export value, on your declaration alone for invoices up to ₹10 lakh.¹⁰
• GST under LUT: if you exported under a Letter of Undertaking and payment is not received within one year of the invoice date, or the period allowed under FEMA including any RBI-permitted extension if that is later, rule 96A of the CGST Rules makes the IGST payable with interest.¹¹

Tell your AD bank promptly and keep the dispute outcome with your invoice. See reduction in export invoice value and export proceeds not realised.

What does RBI require of payment aggregators on chargebacks?

The RBI Master Direction on Regulation of Payment Aggregator, dated 15 September 2025, requires every payment aggregator to have a dispute resolution mechanism that covers chargebacks and disputes raised against its merchants, with timelines for refunds.³

• Merchant agreement: the agreement between the aggregator and the merchant must set out how refunds and failed transactions are handled.³
• Refund route: refunds go to the original payment method unless the payer asks otherwise.³
• Chargeback rights: customers' chargeback rights are not affected by how the aggregator routes refunds through its escrow account.³

These rules sit with the aggregator, so read your own agreement for the detail.³

How do payment platforms compare on chargeback fees?

Payment platforms charge different dispute fees, and a chargeback costs you the disputed amount if you lose, plus any dispute fee, while the original processing fee is usually not returned.⁴⁵⁶⁷ Platforms below are in order of estimated cost on published fees for a USD 5,000 receipt, with providers that do not publish full pricing after, A to Z.

PayPal's user agreement adds that for export payment services it can deduct a reserve and remit a chargeback to the overseas buyer from it, releasing the reserve or its balance 180 days after receipt of the export proceeds.⁶ Other providers' reserve terms are in their own agreements.

What are the common mistakes with chargebacks on international payments?

The common mistakes with chargebacks are the preventable causes Visa lists: missing transaction details, unclear refund policies, delivery delays, and customers not recognising the business name on their statement.¹

• Unclear descriptor: a client who does not recognise the business name may dispute the charge as fraud.¹
• Unclear refund policy: a written refund policy gives the client a route other than a dispute.¹
• Delivery delays: late delivery can lead to "not received" disputes.¹
• Missing transaction details: thin records make evidence harder to assemble.¹
• Not telling the AD bank: a reversal can leave the export value unrealised under regulation 5.¹⁰

For scams that look like chargebacks, see export payment fraud. For anything that turns on your contract or tax position, check with a chartered accountant or lawyer.