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When you start a business and do all the steps to receive/transfer money, you may think that's the end. However, you need to ensure chargeback protection.

How to Avoid Chargebacks?

When you start an online business, open an IBAN account, and do all the necessary steps to receive and transfer money, you may think that this is the end of the story. However, you need to be aware of fraudsters and ensure proper chargeback protection, for example, via utilizing Ethoca.

Let’s discover how it works and why it can be indispensable.

Why There Is a Need for Chargeback Protection

If the customer asks the bank to return the money in USD, EUR, or another currency for purchase, i.e. to get a chargeback, the following process starts.


The customer writes to the bank and asks for a refund.


The issuing bank checks whether it can debit money from the acquiring bank according to the rules of the payment system. The issuing bank writes off money from the acquiring bank and issues a chargeback. The acquiring bank deducts money from the company and sends it a request – it agrees with the chargeback or disputes it.

The company answers 

If the company does not agree with the chargeback, it sends proof to the acquiring bank, which forwards it to the issuing bank. If the company agrees, it does nothing or writes to the acquiring bank about it.

The issuing bank studies the position of the company: analyzes the evidence, shows it to the customer, finds out their reaction, and makes a decision.

Still, many fraudsters operate in Europe, and merchants are in need of chargeback protection due to fraudulent chargebacks that transfer money inappropriately.

Ethoca and Chargeback Protection

Today, there is a variety of tools for safety. For example, Maxpay uses Ethoca for chargeback protection that works as follows:

  1. The client informs the bank about the chargeback that they would like to make.
  2. If the bank is a part of the Ethoca network, it sends this data to the system.
  3. Ethoca promptly notifies the merchant about the situation.
  4. The business owner responds as soon as they can and solves the issue.

Apart from Ethoca, Maxpay recommends the general ways for chargeback protection. Clearly describe what exactly your company sells, under what conditions, what is included in the order, its characteristics, and delivery terms. Common reasons why clients request a return:

  • Inaccuracies in terms, cost, and delivery. For example, the order says that the delivery is free, but in reality, it turns out that you have to pay the courier, and even in cash.
  • The client did not notice how they agreed with the terms of the purchase. There are sites where the checkbox is already ticked, so the client does not pay attention to the fact that they need to read something else and decide whether everything is suitable or not.
  • The client was automatically signed up for a regular payment. For example, a customer orders a set of products for dinner and is sure that this is a single order, but it turns out to be a subscription, and the money is debited every week until the customer cancels it.

Of course, you need to open an IBAN account for your business and be accurate, but together with Ethoca, you will be definitely protected from fraudsters.

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