From November 2022, we further improved our SEPA DD chargeback mitigation measures for merchants.
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.
Please let us know if you have any feedback on this update through the Stripe support channels.
From March 7th 2022, in order to protect Stripe 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 at https://support.stripe.com/questions/sepa-debit-chargebacks-faq and if you need assistance processing a payment please contact us via https://support.stripe.com/contact/ 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.
Please let us know if you have any feedback on this update through the Stripe support channels.