Pre-arbitration and arbitration
explained.

Where pre-arbitration fits

1. Cardholder disputes, issuer files a chargeback.
2. Merchant submits representment.
3. If the issuer still disagrees, the case can move to pre-arbitration: a last exchange between issuer and acquirer before the network gets involved.
4. If pre-arbitration is declined, the case can go to arbitration (Adyen calls it scheme arbitration), where the network rules based on what each side submitted earlier.

How it differs by network

• Visa (per Adyen): fraud and authorization disputes follow an "allocation" flow, while consumer disputes and processing errors follow a "collaboration" flow, where the issuer can open pre-arbitration if it rejects your evidence. Adyen's guide gives the issuer about 30 to 32 days from your evidence upload to send pre-arbitration, and gives a bank 30 days to review pre-arbitration documents and accept or decline. Visa's Compelling Evidence FAQ notes that CE 3.0 evidence can also be delivered in the pre-arbitration response through your acquirer.
• Mastercard (per Adyen): pre-arbitration can be filed within 45 days of the Information Supplied date and applies to all reason codes except 4808, 4870 and 4871.
• PayPal: its dispute lifecycle lists pre-arbitration as the merchant's first appeal of a decision and arbitration as the second.
• Stripe: does not support the arbitration phase, so Stripe disputes end at the issuer's decision.

What arbitration costs

Adyen says that if the scheme rules in favor of the issuer, you can incur a fee of up to USD 600, added to the second chargeback, and lists a USD 600 filing fee for Visa. Your processor may add its own handling fee. Accepting a pre-arbitration case means the dispute is lost and becomes a second chargeback, with no further defense.

A worked example

A merchant wins representment on a $180 "not as described" case. The issuer files pre-arbitration with a new photo from the cardholder showing a defect. The merchant can accept and lose $180, or decline and risk arbitration, where losing would add a fee of up to $600 on top of the $180. Unless the merchant has new, specific evidence that the photo is wrong (for example, a different serial number from the one shipped), accepting is usually the rational choice.

When escalating makes sense

• The amount is large relative to the arbitration fee.
• You have evidence that directly answers the new information, not a restatement of your first response.
• The issuer's argument has a clear rules problem, such as a reason code that does not fit the facts.

Common mistakes

• Escalating on principle for small amounts.
• Resending the original packet without addressing the issuer's new points.
• Missing the much shorter pre-arbitration deadlines.

How Verdikx helps

Verdikx is a fraud, chargeback and dispute platform for e-commerce and SaaS merchants, made by Verdikx LLC. Pre-arbitration and arbitration notices forwarded by email are recognized and added to your case queue with the deadline from the notice, and Adyen (beta) pre-arbitration outcomes update the case status automatically. Each case keeps the full history: the original packet, your submitted response and every status change, so you can judge quickly whether you have anything new. Verdikx does not file arbitration cases with card networks; those go through your acquirer or processor. Verdikx does not guarantee outcomes.