Updated information:
From November 2022, SEPA DD chargeback mitigation measures for merchants have been improved.
We now leverage information collected across our services to detect risky transactions with higher accuracy in order to reduce fraudulent transactions, chargeback rates, and dispute fees. The data we use includes the payment and transaction history of the IBAN, the merchant, and the end customer across the Stripe network. We use this data to score each transaction based on its likelihood of leading to a chargeback (this includes customer disputes, payment failures, and fraud), and then we block transactions with high risk scores. For more information, see our Privacy Policy.
Previous information:
From March 7th 2022, in order to protect merchants from chargebacks, we will be updating the way we treat IBANs with more than 3 consecutive disputes or with specific error codes.
What are the new changes?
If an IBAN had disputed payments 3 times in a row regardless of reason code or at least one dispute for specific reason codes, then we will suspend the IBAN for 90 days, and during this suspension period, future payments using such IBANs will be blocked.
The specific reason codes are:
- RC01 - Bank identifier incorrect, i.e. invalid BIC
- AC04 - Account closed
- AG02 - Invalid bank operation code
- AC01 - Incorrect account number
- BE05 - Unrecognised initiating party
- SL01 - Specific service offered by debtor agent
- RR02 - Missing debtor name or address
You can find the full list of dispute reason codes on the European Payments Council website.
What will the user see when a payment gets blocked?
When the payment gets blocked you’ll see the error message:
The payment is blocked due to a high likelihood of chargeback. You can learn more about this here and if you need assistance processing a payment please contact support for further information.
Why will a payment be blocked?
We observed that future attempts after these reason codes or attempts that had previous consecutive failures will likely to fail again. Therefore, blocking such attempts helps to improve the chargeback rate and protect from dispute fees.