Startup Check-In

New Chargeback Rules No Sweat For Chargehound

April 15, the day that Visa’s new chargeback rules go into effect, has stirred up a lot of anxiety for merchants – but for the startup Chargehound, it’ll be just another day.

Merchants who respond to chargebacks manually are pulling their hair out as they picture 30 percent shorter deadlines and more stringent rules around what qualifies as evidence. But ones who handle disputes automatically, as Chargehound’s customers do, aren’t sweating the change at all.

Pallavi Kuppa-Apte, head of sales and marketing at Chargehound, said there are two main functions that Chargehound provides that will make the transition a non-issue for customers.

First, other merchants will be feeling the pressure to respond to disputes as quickly as possible. One chargeback response can eat up around 30 minutes when done manually, she said. It takes full-time employees to get it done.

Meanwhile, said Kuppa-Apte, Chargehound can submit responses instantly and automatically – up to 10,000 of them per minute. The startup is already doing this. Dispute windows shrinking from 45 days to 30 will not impact this functionality at all, and when that window is further shortened to 20 days next year, Chargehound will be just as cucumber-cool about it. Instant is instant, no matter the deadline.

Second, while others worry about the evidence they’re submitting and the types of disputes they’re fighting, Kuppa-Apte said Chargehound’s responses are based on templates that are unique to each business, which get sent out to the bank.

So while other merchants will have to change workflows, which means retraining staff and therefore inviting downtime, merchants working with Chargehound can sit down at the computer for five minutes to modify the template, adding evidence or changing the types of disputes to which they respond.

The workflow doesn’t take any longer, no retraining is necessary and there is no downtime during the transition.

Far from feeling anxious about the liability shift, Kuppa-Apte said Chargehound is almost excited about it, because it creates more ways for the startup to deliver value to customers. She said merchants should be automating this whole process, anyway – there’s no reason, in 2018, to worry about hiring three times more people to meet manual deadlines. Visa’s new rules are just another reason for merchants to finally take that step, she said.

When something like this becomes top of mind, said Kuppa-Apte, many parties – such as banks and card networks – will be thinking about how to change it in a way that’s best for themselves, but that’s not always best for the merchant. By automating, merchants ensure that deadlines, staffing costs and adjusted workflows are not issues; all can be achieved within minutes.

“This is a growing problem that’s just becoming more and more urgent,” Kuppa-Apte said. “Automate it now. Enter the 21st century. Our perspective on the rule changes is different, because our customers don’t have to spend any effort on it – it’s just another payments drama they can put on mute.”



The PYMNTS Cross-Border Merchant Friction Index analyzes the key friction points experienced by consumers browsing, shopping and paying for purchases on international eCommerce sites. PYMNTS examined the checkout processes of 266 B2B and B2C eCommerce sites across 12 industries and operating from locations across Europe and the United States to provide a comprehensive overview of their checkout offerings.