What service does the Back-end Processor provide related to chargebacks?

The back-end processor plays a crucial role in managing chargebacks within the electronic payment processing system. The primary function attributed to the back-end processor in this context is its responsibility for handling all chargeback and retrieval processing. This means that it oversees the entire process when a cardholder disputes a transaction, ensuring that the claim is accurately recorded, investigated, and resolved according to the rules set forth by card networks and issuing banks.

By managing chargebacks, the back-end processor helps maintain transaction integrity, serves as a mediator between the merchant and the issuing bank, and ensures compliance with regulations. This processing involves reviewing supporting documentation from both sides and ultimately determining the validity of the chargeback request. Properly handling these situations is essential for protecting merchant interests while also addressing consumer rights.

In contrast, the other options do not accurately describe the specific role of the back-end processor related to chargebacks. For instance, processing and resolving all customer inquiries is a broader customer service function that may involve multiple entities beyond just the back-end processor. Offering collection services for unpaid charges involves aspects beyond just handling disputes, focusing instead on debt recovery. Additionally, limiting the number of chargebacks processed could relate more to risk management strategies rather than being a direct function of the back-end processor itself