Cardholder initiated transactions (CIT)

    Cardholder initiated transactions (CIT) are paments initiated and authorised by a cardholder by entering card details or using stored credential and payment details - transactions where a cardholder takes an active part.

    Examples of such transactions: 

Merchant initiated transactions (MIT)

    Merchant initiated transactions (MIT) are payments undertaken by businesses with a mandate from a cardholder. 

    Examples of such transactions: 

  • Recurrent subscription payment;
  • Payment initiated on "delivered goods" trigger, meaning you charge your customer after the customer receives the goods or service. 

To classify a payment as a MIT, you must have prior consent (mandate) from the cardholders to the merchant to store payment credentials for future use without their active engagement.

CIT/MIT and chargebacks

    Now let us take a look at CIT and MIT thru a chargeback perspective.

    What if a customer raised a dispute for CIT as fraudulent?

     - In such cases, the responsibility primarily lies on the card-issuer bank because a cardholder initiated the transaction. Hence it has undergone bank issuer's security checks and so. If the transaction was fraudulent, the card was stolen/compromised - this risk is on the bak. 

    What if a customer raised a dispute for MIT as fraudulent? 

    - As the merchant initiates this type of transaction, the responsibility mainly lies on a merchant. In case of a dispute of a fraudulent transaction, whether it is recurrent or not - the merchant will be held responsible.  

In case of disputes for undelivered good/services, or when a customer received goods/services which fell short from advertised/promised - it does not matter CIT or MIT payment. The responsibility lies with the merchant