Return & Refund Policy

Essential Elements of a Payment Gateway’s Return & Refund Policy

Your policy should primarily address the commercial relationship between your company and the businesses that use your gateway.

Your policy must clearly state what your service covers and how fees are handled.

Service Guarantee: Detail the performance and availability expectations for your payment gateway.
Fees and Billing: Explain your billing cycle, when fees are charged (per transaction, monthly subscription, etc.), and what circumstances might lead to a refund or credit of those fees (e.g., billing error).
Termination: Outline the refund process for any prepaid services or remaining balance if either party terminates the contract.

This is the most critical aspect for a payment gateway. You must clearly define your role and your client’s responsibility in the chargeback process:

Chargeback Fees: Specify the fee you charge your client for processing a chargeback, regardless of the outcome.
Fund Flow: Explain when and how funds are reversed from your client’s account to the customer (cardholder) when a chargeback is lost or an undisputed refund is issued.
Policy Link: Clearly state that your client’s customers are governed by the client’s (the merchant’s) own return and refund policy, and that your company only acts as the financial intermediary to process the return/refund initiated by the merchant.

If you fail to meet a contractual obligation (a Service Level Agreement or SLA), your policy should define the remedy for your client:

Downtime Credit: Detail how you issue a credit or refund on service fees if your gateway experiences significant, unscheduled downtime that violates your SLA with the merchant.
Calculation: Explain how any such credit is calculated (e.g., a percentage of the monthly service fee based on the duration of the outage).

Since you are dealing with business contracts, you must specify the legal framework:

Governing Law: Clearly state the jurisdiction whose laws govern the agreement (e.g., the laws of Pakistan).
Dispute Resolution: Detail the process for resolving disagreements with your client (e.g., initial negotiation, followed by arbitration or court proceedings).