What is a chargeback ratio? Why card providers watch it
By SendPay Business · · 2 min read
A chargeback ratio is the share of a business's card payments that end up as chargebacks. Payment providers and card schemes watch it closely, because a high ratio suggests fraud or unhappy customers.
How to work it out
Divide the number of chargebacks in a period by the number of card payments in the same period, then multiply by 100. For example, 5 chargebacks from 1,000 payments in a month is a ratio of 0.5%.
Why it matters
Card schemes run monitoring programmes, and payment providers set their own limits, often well below 1%. A business whose ratio stays high can face extra fees, a reserve held back from its payouts, or the loss of card processing.
Ways to keep it low
- Use a clear business name that customers recognise on their statement.
- Describe products honestly and make delivery times clear.
- Make refunds easy, so customers ask you before their bank.
- Answer customer emails quickly.
- Use card checks such as 3D Secure to cut fraud.
Where SendPay fits
SendPay platforms include payment links, invoicing and subscriptions under your own brand, powered by licensed partners. SendPay tells you in writing which licences apply to your platform before you pay.
Build it
Create your own financial platform.
Pick a template, name it, brand it, preview every page before you pay. Your brand, your users, your fees.
Build my platform →Questions people ask
Can I work out my ratio online?
Our free chargeback ratio calculator shows your ratio, how close it is to your provider's limit, and what chargebacks cost you.
Chargeback ratio calculator →Read next
This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. PayPal, Patreon and Substack are named as reference points only and are not affiliated with SendPay Business.