Payment Dispute Rate

Date created: Oct 12, 2022  •   Last updated: Oct 12, 2022

What is Payment Dispute Rate?

Payment Dispute Rate is the percentage of total successful payments that are disputed charges, both in the same period of time. Disputed payments, or chargebacks, are initiated by the cardholder's bank, and typically include a processing fee.

Payment Dispute Rate Formula

ƒ Sum(Disputed Charges Count) / Sum(Charges Count)

How to calculate Payment Dispute Rate

In one day, you process 100 payments. Out of these, 2 payments are disputed on the same day and 2 more on the next day. Your Payment Dispute Rate for that day is 2%. Whereas, your Payment Dispute Rate for the period of two days would be 4% instead.

Start tracking your data

Use Klipfolio PowerMetrics, our free analytics tool, to monitor your data. Choose one of the following available services to start tracking your instantly.

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How to visualize Payment Dispute Rate?

Use a line chart to observe how your Payment Dispute Rate trends over time. If you see this number steadily increasing, this is a red flag to communicate better with your customers regarding disputed charges.

Payment Dispute Rate visualization example

Payment Dispute Rate

Line Chart

Here's an example of how to visualize your Payment Dispute Rate data in a line chart over time.
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Payment Dispute Rate

Chart

Measuring Payment Dispute Rate

More about Payment Dispute Rate

Payment Dispute Rate is an interesting way to look at disputed charges. Essentially, you are tracking the ratio of successful payments to disputes. A dispute occurs when the customer challenges a payment with their card issuer. If you do not respond to or provide sufficient evidence against a disputed charge, the disputed amount is deducted from your account. You should aim to keep your Payment Dispute Rate to a minimum. Ideally, this number should decrease over time.

Recommended resources related to Payment Dispute Rate

Read all about how to measure disputes in this guide from Stripe.