It seems like most payment processors favor the buyer when settling disputes. I sell custom made software and I know that users can issue a chargeback to avoid paying. Are chargebacks something I should be concerned about? If so, are there any payment processors that don't allow chargebacks, or at least favor the seller when resolving disputes?

  • Do you have a web site and the payment system needs to be implemented using a API or do you simply want a payment method without the ability to charge back? Jan 29 '19 at 13:49
  • I'd expect it will only be possible if you do not allow credit card purchases somehow (i.e., wire transfer, ACH, etc). Good luck getting most people to agree to that. I suppose your only recourse if someone succeeded would be to invalidate any license key you may have had with your software, but coming up with something that cannot be cracked easily is very difficult.
    – topshot
    Jan 29 '19 at 13:49
  • I've reworded the question in an attempt to revive it. It is admittedly a different but related question, but this way it is more relevant to this site.
    – TTT
    Jan 29 '19 at 16:30
  • @TTT Isn't it still off-topic as "Questions about small business that have no bearing on personal finance"? I guess if it's for a sole proprietorship then it's a little ambiguous, but it still feels like it's on the business rather than personal finance side of the line. Jan 30 '19 at 6:31
  • @GaneshSittampalam - that's a slippery slope that if we go down, we'd have to disqualify many excellent small business questions on this site. I felt this question was written by a software developer that is contemplating or recently started a small side business and has consumer protection concerns. Admittedly it certainly isn't a slam dunk though.
    – TTT
    Jan 30 '19 at 12:14

If you have a good product, I wouldn't worry about it. You just have to accept some amount of chargebacks as the cost of doing business. Using a provider that offers buyer protection is likely to increase your overall sales, and this should more than compensate for the small percentage of users that unethically use the chargeback mechanism to avoid paying for your product. I've used PayPal to process many thousands of transactions for access to software, and I can count on one hand the number of chargebacks that have occurred. I've also issued refunds upon request, but that is probably less than 20 times total.

Why are you so concerned about chargebacks? Surely there are other specific reasons, but off hand the only reason I can think of is if you believe your customers won't be satisfied with the product. If that's the case I'd focus on changing the product rather than the payment processor. If your product is good, I wouldn't stress out about it.

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