Chargeback, a liability problem, not an identity one

Solidus ships nothing that addresses chargebacks, and unlike most pages in this section, there is no useful identity angle to offer. Chargeback is not-built.

This page defines the term and then says why we are the wrong vendor for it, which is more useful than a stretched argument.

What it is

A cardholder disputes a transaction with their issuer, and the issuer reverses it, pulling the funds back from the merchant, usually with a fee attached. The merchant can contest with evidence, through a process governed by card-scheme rules rather than by any general law of contract.

The scheme rules are the product here. They define the reason codes, the evidence standards, the deadlines, and, decisively, who bears the loss.

Why identity verification does not solve it

Chargebacks fall into roughly three buckets, and identity is only relevant to the smallest:

• True fraud, a stolen card used by someone else. Identity is relevant here, and it is largely handled upstream by authentication and, in some flows, by a liability shift. By the time a chargeback exists, the identity question was already answered wrongly at authorisation.
• First-party fraud, the genuine cardholder disputes a transaction they made. Verifying identity proves nothing, because the disputed party's identity was never in question. This is the largest and fastest-growing bucket in most merchants' data.
• Service and delivery disputes: the goods never arrived, or were not as described. Not an identity question at all.

So the honest arithmetic is that identity addresses a minority of a minority, and even there it acts before the chargeback rather than during it.

The structural reason we cannot compete here

What a merchant buys in this space is a shift in who bears the loss. That is what 3-D Secure offers and why merchants adopt it despite the friction.

A credential that does not move liability does not compete with one that does, and ours does not, because liability shift is conferred by scheme rules, not by cryptographic strength. That conclusion was reached on payment authorization and it does not soften here.

We are not in the card schemes, hold no payment-industry certification, and cannot confer liability protection on anyone.