Arbitration

Arbitration in the context of credit card transactions is a formal dispute resolution process used by credit card issuing companies to determine the definitive responsibility for a chargeback between the involved parties, typically the card issuer and the acquirer (the entity processing payment transactions on behalf of a merchant). This process is invoked when there is a disagreement that cannot be resolved through the standard chargeback procedures. During arbitration, both parties present evidence supporting their claims regarding the chargeback to an impartial third party, usually appointed by the payment network or card association. The arbitrator's decision is binding and determines which party is financially liable for the chargeback. This process helps ensure a fair resolution and maintains the integrity of the transaction process within the credit card industry.