Payment Dispute Reconciliation Automation | Chargebacks

Introduction

Payment disputes and chargebacks represent one of the most operationally intensive areas of payment processing. Each dispute triggers a cascade of financial adjustments (original transaction reversal, provisional credits, fees, and potential re-presentment) that must be tracked across multiple systems and reconciled accurately.

NAYA's AI-powered reconciliation platform automates the complex workflow of dispute management, ensuring that every chargeback is properly recorded, tracked, and reconciled through its complete lifecycle.

The Problem

Dispute reconciliation challenges payment providers, merchants, and platforms in several ways:

Multi-Stage Financial Flows: A single chargeback can generate five or more separate financial entries: the original transaction, the chargeback debit, a provisional credit, a chargeback fee, and potentially a representment credit or second chargeback. Tracking these related entries across time is complex.

Inconsistent Data Formats: Different card networks (Visa, Mastercard, Amex) and payment processors provide dispute data in different formats, with different reason codes, and on different timelines. Normalizing this data for consistent tracking requires significant effort.

Timing Mismatches: Disputes can arrive days or weeks after the original transaction, and resolution can take months. Matching dispute events to original transactions across time gaps is challenging, especially at high volume.

Fee Reconciliation: Chargeback fees vary by processor, card network, and dispute outcome. Ensuring you have correctly recorded all fees and that they match your processor statements requires careful reconciliation.

Financial Statement Impact: Disputes affect revenue recognition, reserves, and cash flow in complex ways. Without accurate dispute tracking, financial statements may be materially incorrect.

Operational Overhead: Many organizations rely on manual processes to track disputes, using spreadsheets to monitor status, deadlines, and financial impacts. This approach does not scale and introduces errors.

The NAYA Solution

NAYA provides end-to-end dispute lifecycle management integrated with your operational ledger, ensuring that every dispute is accurately tracked and reconciled.

Unified Dispute Tracking

When a chargeback notification arrives, NAYA automatically creates linked ledger entries that connect the dispute to the original transaction. This linkage is maintained throughout the dispute lifecycle, from initial notification through final resolution.

Multi-Source Normalization

The Data Hub ingests dispute data from multiple payment processors and card networks, normalizing reason codes, amounts, and dates into a consistent format. You can analyze dispute trends across all your payment sources without manual data transformation.

Automated Financial Adjustments

NAYA automatically records the financial impact of each dispute stage:

• Initial Chargeback: Reverses the original transaction and records provisional credits
• Fee Assessment: Books chargeback fees from processors
• Representment: Records funds recovery when disputes are won
• Second Chargeback/Arbitration: Tracks additional adjustments if disputes continue

AI-Powered Matching

NAYA's reconciliation engine uses machine learning to match dispute events to original transactions, even when identifiers have changed or timing gaps exist. The system learns from your data patterns to improve match accuracy over time.

How It Works

1. Integrate Dispute Sources: Connect NAYA to your payment processors and card network dispute feeds. Dispute notifications flow into the Data Hub automatically.

2. Configure Dispute Rules: Define how different dispute types should be recorded, including fee amounts, accounting treatments, and reserve calculations. NAYA applies these rules consistently to every dispute.

3. Automate Lifecycle Tracking: As disputes progress through their lifecycle (notification, response deadline, resolution), NAYA updates the ledger and triggers appropriate workflows. Deadlines are monitored automatically.

4. Reconcile Continuously: NAYA matches dispute-related entries to processor statements and bank deposits, ensuring that all financial impacts are captured and accurate.

Key Benefits

• Complete Dispute Visibility: Track every dispute from notification through resolution with full financial lineage.
• Reduce Manual Tracking: Eliminate spreadsheets and manual status updates with automated lifecycle management.
• Accurate Financial Reporting: Ensure dispute-related reserves and revenue adjustments are correctly recorded.
• Improve Win Rates: Better data organization supports more effective dispute response and representment.
• Fee Reconciliation: Verify that processor chargeback fees match your agreements and are correctly recorded.
• Trend Analysis: Analyze dispute patterns across merchants, products, and time periods to identify fraud or operational issues.

Compliance & Reporting

Dispute management carries regulatory and card network compliance requirements that NAYA helps address:

• Card Network Rules: Track response deadlines and ensure compliance with Visa, Mastercard, and Amex dispute procedures.
• Reserve Calculations: Maintain accurate dispute reserves based on historical win rates and current dispute volume.
• Audit Trails: Provide auditors with complete dispute history, including all financial adjustments and supporting documentation.
• Processor Reconciliation: Verify that dispute-related debits and credits on processor statements match your internal records.

Integration Architecture

NAYA integrates with your existing dispute management workflow:

• Processor Webhooks: Receive real-time dispute notifications from Stripe, Adyen, Braintree, and other processors.
• Fraud Tools: Connect with fraud detection systems to enrich dispute records with risk signals.
• Case Management: Export dispute data to your representment workflow or case management system.
• Accounting Systems: Sync dispute-related journal entries to your general ledger.

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