Ratio of Chargebacks to Transactions
Percent of Revenue Lost to Chargebacks
Most Common Reason for Disputes
Win Rates and the ROI of Fighting Chargebacks
Percent of Chargebacks Prevented
Countries with the Highest Chargeback Rates
When expanding into new markets, merchants should evaluate the revenue potential of each individual country versus the anticipated risk.
This year’s report calculated the chargeback-to-transaction ratio for cardholder locationsbroken down by region.
- United States and Canada
- LAC (Latin America and the Caribbean)
- Europe
- CEEMEA (Central and Eastern Europe, Middle East, and Africa)
- AP (Asia-Pacific)
Overall, the data told a story of survival and adaptation.
In general, merchants were more cautious in 2021. Despite the fact that this year’s report included data from 165% more merchants than the previous year’s report, the number of countries involved decreased by 46.5%.
In 2020, many merchants were forced to take their businesses online — regardless of whether or not the region’s consumers were prepared for the change. As a result, many countries had chargeback ratios that were unbearably high.
In response to the increased risk, many merchants scaled back on global sales in 2021. And the initiative paid off. Nearly 96% of the countries analyzed in both 2020 and 2021 had a decrease in the average chargeback-to-transaction ratio.
As consumers became more accustomed to new sales models, technologies, societal limitations, and cardholder responsibilities, chargeback activity was more proportional to the influx in sales.
And while the decrease in risk was a welcomed relief for everyone involved, the more conservative approach did have one drawback: some countries had minimal data available for analysis.
| REGION | NUMBER OF COUNTRIES | PERCENT OF TOTAL TRANSACTIONS | PERCENT OF TOTAL CHARGEBACKS |
|---|---|---|---|
| U.S. and Canada | 2 | 92.66% | 96.9% |
| LAC | 22 | 0.14% | 0.16% |
| Europe | 20 | 5.90% | 1.49% |
| CEEMEA | 34 | 0.25% | 0.03% |
| AP | 21 | 1.06% | 1.33% |
Moreover, region-specific laws can also impact chargeback rates. The right to dispute a transaction is a federal law in the U.S. However in other countries, especially throughout the CEEMEA and AP regions, there are far fewer legally-mandated consumer protections. Since rights are less understood, chargeback rates would, understandably, be lower.
Therefore, caution should be taken when drawing inferences from the country-specific data. It may not be universally applicable or indicative of future trends.Merchants should base decisions on their own international data.
United States and Canada
The vast majority of chargebacks analyzed in this study — nearly 97% — originated in the United States or Canada.
Despite the volume of chargebacks in the U.S, merchants were able to keep risk relatively low.
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The low chargeback-to-transaction ratio in the U.S. correlated to a high rate of prevention cases in the region, which was likely the main reason risk was kept in check.
| PREVENTION SOLUTION | PERCENT OF CASES IN THE US |
|---|---|
| Verifi | 97.11% |
| Order Insight | 92.93% |
| Ethoca | 88.32% |
| RDR | 80.54% |
Ultimately, merchants’ prevention efforts paid off; the average chargeback-to-transaction ratio for the U.S. decreased 17.13% between 2020 and 2021. And despite the fact that Canada had a ratio that was higher than the norm, the overall average dropped 8.7% since 2020.
Latin America and the Caribbean
The LAC region had 6 of the 10 highest chargeback-to-transaction ratios in this year’s report.
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However, the higher-than-average ratios were actually a significant achievement compared to 2020. Of the countries that were included in both years’ reports, all but one saw a year-over-year decrease in the average chargeback-to-transaction ratio.
Yet, with such limited data available for analysis, long-term trends are challenging to accurately anticipate.
| COUNTRY | 2020 RATIO | 2021 RATIO | PERCENT CHANGE |
|---|---|---|---|
| Chili | 7.91% | 0.11% | 98.6% decrease |
| Brazil | 12.83% | 0.47% | 96.3% decrease |
| Colombia | 6.35% | 0.29% | 95.4% decrease |
| Barbados | 3.15% | 0.22% | 93% decrease |
| Uruguay | 17.02% | 1.41% | 91.7% decrease |
| El Salvador | 3.04% | 0.26% | 91.5% decrease |
| Argentina | 4.33% | 0.72% | 83.4% decrease |
| Costa Rica | 4.09% | 0.69% | 83.1% decrease |
| Guatemala | 13.52% | 2.60% | 80.8% decrease |
| Peru | 2.69% | 0.65% | 75.8% decrease |
| U.S. Virgin Islands | 3.52% | 1.03% | 70.7% decrease |
| Guadeloupe | 1.13% | 0.39% | 65.5% decrease |
| Mexico | 10.65% | 4.24% | 60.2% decrease |
| Ecuador | 5.50% | 2.40% | 56.4% decrease |
| Jamaica | 1.79% | 1.10% | 38.5% decrease |
| Anguilla | 0.78% | 0.50% | 35.9% decrease |
| Panama | 1.85% | 1.30% | 29.7% decrease |
| Puerto Rico | 4.95% | 3.91% | 21.0% decrease |
| Dominican Republic | 3.93% | 4.33% | 10.2% increase |
| Bahamas | 1.50% | 1.48% | 1.3% decrease |
| Turks and Caicos Islands | 0.98% | 3.62% | 269.4% increase |
Europe
Of all the regions included in this year’s report, Europe had the lowest average chargeback-to-transaction ratio — just 0.41%.
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Like all the other regions, countries in Europe experienced a significant year-over-year decrease in chargeback activity.
| COUNTRY | 2020 RATIO | 2021 RATIO | PERCENT CHANGE |
|---|---|---|---|
| Switzerland | 3.21% | 0.06% | 98.1% decrease |
| Germany | 8.42% | 0.21% | 97.5% decrease |
| Belgium | 8.21% | 0.21% | 97.4% decrease |
| Netherlands | 6.78% | 0.19% | 97.2% decrease |
| Italy | 1.92% | 0.06% | 96.9% decrease |
| Portugal | 7.96% | 0.27% | 96.6% decrease |
| Spain | 11.06% | 0.40% | 96.4% decrease |
| France | 6.86% | 0.26% | 96.2% decrease |
| Ireland | 5.93% | 0.23% | 96.1% decrease |
| Austria | 4.27% | 0.31% | 92.7% decrease |
| Iceland | 3.00% | 0.24% | 92.0% decrease |
| Sweden | 1.99% | 0.19% | 90.5% decrease |
| Norway | 1.30% | 0.13% | 90.0% decrease |
| Finland | 1.57% | 0.16% | 89.8% decrease |
| Denmark | 2.26% | 0.36% | 84.1% decrease |
| Malta | 5.40% | 0.76% | 85.9% decrease |
| United Kingdom | 3.25% | 0.75% | 76.9% decrease |
| Greece | 4.30% | 1.01% | 76.5% decrease |
| Andorra | 6.40% | 1.72% | 73.1% decrease |
Central and Eastern Europe, Middle East, and Africa
Of all the regions included in this year’s report, CEEMEA was the largest with 34 of 99 total countries. However, the region only accounted for 0.25% of the report’s total transaction volume — and a mere 0.03% of the report’s chargeback volume.
Because the available data for this region was extremely limited, it’s challenging to make any meaningful inferences. While the data does accurately reflect activity for the last two years, it may not be a useful metric to anticipate future risk.
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Even with limited data, it was evident that risk decreased for participating merchants in a year-over-year analysis.
| COUNTRY | 2020 RATIO | 2021 RATIO | PERCENT CHANGE |
|---|---|---|---|
| Czechia | 5.90% | 0.01% | 99.8% decrease |
| Egypt | 8.70% | 0.09% | 99% decrease |
| Turkey | 7.30% | 0.11% | 98.5% decrease |
| Croatia | 4.66% | 0.08% | 98.3% decrease |
| Cyprus | 11.04% | 0.19% | 98.3% decrease |
| Romania | 3.95% | 0.35% | 96.6% decrease |
| Israel | 7.56% | 0.26% | 96.6% decrease |
| Jordan | 13.46% | 0.49% | 96.4% decrease |
| United Arab Emirates | 2.52% | 0.11% | 95.6% decrease |
| Kenya | 5.72% | 0.35% | 93.9% decrease |
| Poland | 0.64% | 0.04% | 93.8% decrease |
| Albania | 3.28% | 0.27% | 91.8% decrease |
| South Africa | 5.43% | 0.47% | 91.3% decrease |
| Nigeria | 2.73% | 0.24% | 91.2% decrease |
| Hungary | 2.47% | 0.24% | 91.1% decrease |
| Saudi Arabia | 1.51% | 0.14% | 90.7% decrease |
| Lebanon | 6.97% | 0.75% | 89.2% decrease |
| Serbia | 3.96% | 0.43% | 89.1% decrease |
| Réunion | 1.60% | 0.20% | 87.5% decrease |
| Qatar | 2.91% | 0.49% | 83.2% decrease |
| Ukraine | 1.23% | 0.24% | 80.5% decrease |
| Oman | 3.13% | 0.65% | 79.2% decrease |
| Morocco | 2.93% | 0.63% | 78.5% decrease |
| Bulgaria | 0.74% | 0.19% | 74.3% decrease |
| Pakistan | 6.25% | 1.65% | 73.6% decrease |
| Russian Federation | 0.56% | 0.15% | 73.2% decrease |
| Uganda | 1.33% | 0.37% | 72.2% decrease |
| Georgia | 1.96% | 0.58% | 70.4% decrease |
| Algeria | 3.46% | 1.44% | 58.4% decrease |
| Afghanistan | 1.73% | 1.10% | 36.4% decrease |
| Slovenia | 1.05% | 0.74% | 29.5% decrease |
| Uzbekistan | 1.35% | 2.11% | 56.3% increase |
Asia-Pacific
The Asia-Pacific region had only 2 of the top 10 highest chargeback-to-transaction ratios — a relatively low count compared to LAC with 6. However, the AP region had the highest average chargeback-to-transaction ratio of all regions (1.92% compared to LAC’s 1.8%).
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Like other regions, the available data for AP was extremely limited. Therefore, it is challenging to make meaningful inferences. However, the data does indicate that merchants experienced a decrease in risk when selling in most of these countries.
| COUNTRY | 2020 RATIO | 2021 RATIO | PERCENT CHANGE |
|---|---|---|---|
| Indonesia | 8.56% | 0.16% | 98.1% decrease |
| Philippines | 4.57% | 0.19% | 95.8% decrease |
| India | 6.79% | 0.40% | 94.1% decrease |
| Hong Kong | 5.67% | 0.35% | 93.8% decrease |
| Guam | 4.52% | 0.36% | 92.0% decrease |
| Singapore | 3.44% | 0.31% | 91.0% decrease |
| Thailand | 7.98% | 0.82% | 89.7% decrease |
| Japan | 2.78% | 0.35% | 87.4% decrease |
| Sri Lanka | 8.97% | 1.46% | 83.7% decrease |
| Malaysia | 3.43% | 0.68% | 80.2% decrease |
| Cambodia | 3.77% | 0.78% | 79.3% decrease |
| Brunei | 2.44% | 0.66% | 73.0% decrease |
| Australia | 7.15% | 2.30% | 67.8% decrease |
| Taiwan | 3.82% | 1.25% | 67.3% decrease |
| New Zealand | 4.15% | 1.50% | 63.9% decrease |
| China | 3.82% | 1.48% | 61.3% decrease |
| Macao | 4.18% | 2.67% | 36.1% decrease |
| American Samoa | 0.86% | 0.95% | 10.5% increase |
| Mongolia | 1.00% | 1.20% | 20.0% increase |
