TABLE OF CONTENTS
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:
- Store checkout;
- 1st subscription payment;
- 1-click payment;
- Resing 1-click payment;
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