What are the two types of Chargebacks?

The correct answer identifies the two types of chargebacks as Procedural and Substantive, highlighting their distinct characteristics in the context of transaction disputes.

Procedural chargebacks pertain to issues involving the process by which a transaction is disputed. They often arise when there's a failure to follow the proper protocol for handling transactions or customer complaints. This type includes scenarios where the customer may not have authorized the charge, or where they did not receive their merchandise as defined by the terms of service.

On the other hand, substantive chargebacks relate to the content or quality of the transaction itself. This could include instances where the product or service provided did not meet the customer's expectations or was misrepresented. Substantive chargebacks usually stem from a disagreement about the legitimacy or quality of the charge, rather than a procedural issue.

The distinction between these two types is crucial for understanding chargeback management and the implications for merchants and service providers in the payment processing ecosystem. By categorizing chargebacks this way, businesses can develop targeted strategies for handling disputes, reducing their impact on revenue and customer satisfaction.