You approved a $50,000 supplier payment in January. The product shipped, your customer received it, and everything looked clean. Then in April, three months later, your payment processor emails: “Chargeback filed, funds reversed.”
The customer claimed they “didn’t authorize the purchase.” Your team scrambles to gather evidence,shipping confirmations, signed delivery receipts, email correspondence. You spend $2,400 in staff time documenting everything within the 10-day deadline. You submit the dispute.
Six weeks later: Denied. The bank sided with the customer.
You lost the $50,000 payment. You lost the product. You paid a $100 non-refundable dispute fee. And you absorbed $2,400 in operational costs. That single transaction cost your business $52,500,a 5x multiplier on the original amount.
This isn’t a cautionary tale. It’s happening right now to 79% of merchants, and it’s accelerating.
The $125 Billion Tax Nobody Talks About
Chargeback fraud represents a $125 billion annual problem affecting every business that accepts card payments. This isn’t money lost to sophisticated criminal organizations,it’s your own customers gaming a system built to protect them, not you.
Forbes Tech Council, Mastercard, and payment industry researchers have quantified what CFOs already feel: chargebacks are the fastest-growing drain on profitability. For every dollar lost to a chargeback, merchants actually lose between $3.75 and $4.61 when you account for non-refundable fees, operational costs, lost merchandise, and penalty programs.
Do the math. A $10,000 chargeback costs your business up to $46,100. Last year, the average chargeback reached $169.13, up from $165 in 2023. That growth trajectory isn’t slowing down.
The Explosion You Didn’t See Coming
Here’s what changed between 2023 and 2024 that should terrify every finance leader:
First-party fraud surged from 15% to 36% of all reported fraud,a 140% increase in a single year. This isn’t criminals stealing credit cards. It’s your legitimate customers disputing authorized transactions they regret.
The numbers are stark:
- 79% of merchants experienced friendly fraud in 2024, compared to just 34% in 2023
- 40-80% of all chargebacks are friendly fraud, not true criminal activity
- 35% of Americans openly admit to committing first-party fraud
- 40-50% become repeat offenders within 60 days
Industry-specific carnage tells the story even more dramatically: eCommerce saw a 222% increase in chargebacks between Q1 2023 and Q1 2024. Online travel and lodging experienced an 816% spike. Overall chargeback rates rose 19% across all industries in 2024.
This isn’t fraud prevention failing. It’s customers realizing they can weaponize consumer protection mechanisms with near-zero consequences. They dispute, claim “didn’t authorize” or “product defective,” and banks extend them the benefit of the doubt,every single time.
What Every $100 Chargeback Actually Costs
CFOs think in total cost of ownership. So let’s break down what one $100 chargeback actually extracts from your business:
| Cost Component | Amount |
| Original transaction (reversed) | $100 |
| Product/service delivered (lost) | $100 |
| Non-refundable chargeback fee | $15-$100 |
| Staff time gathering evidence (10-45 days) | $150-$400 |
| Arbitration fee (if escalated) | $500-$900 |
| Total cost per $100 chargeback | $365-$1,500 |
These are direct, quantifiable costs. They don’t include:
- Working capital drag: Funds tied up for 30-120 days during dispute resolution
- Forecasting uncertainty: Chargebacks are unpredictable budget line items that make financial planning impossible
- Resource diversion: Your finance team spends hours managing disputes instead of strategic work
- Penalty exposure: High chargeback ratios trigger card network monitoring programs with additional fees
- Reputational damage: Excessive chargebacks can result in losing your merchant account entirely
When your payment processor raises fees or threatens termination because you’ve crossed their chargeback threshold, that’s when CFOs realize this isn’t a minor fraud problem,it’s a structural flaw in the payment system itself.
Why You’re Losing the Fight Before it Starts
The chargeback dispute process is designed with a fatal asymmetry: banks prioritize cardholder relationships over merchant evidence.
Even when you submit perfect documentation, your odds are dismal:
- Merchants win only 8.1% of disputes they fight (some optimistic estimates put it at 45% in best-case scenarios)
- You have 10-35 days to respond with evidence tailored to specific reason codes
- You need delivery confirmation, transaction records, customer correspondence, AVS/CVV matches,and even that often isn’t enough
- If you escalate to arbitration, you pay $500-900 regardless of outcome
Traditional fraud prevention tools,AVS matching, CVV verification, 3D Secure,reduce but don’t eliminate chargebacks. They’re designed to catch stolen credit card numbers, not authorized purchasers who change their minds and realize they can dispute with impunity.
Friendly fraud bypasses all of these controls. When a legitimate customer uses their real card, passes all authentication checks, receives the product, and then disputes it weeks later claiming they “don’t recognize the charge,” no fraud tool on earth stops it.
Your finance team files disputes because it feels wrong to surrender without fighting. But with 8-45% win rates and weeks of operational overhead per case, you’re on a treadmill that only enriches the dispute management industry.
Payment Rails With Zero Chargebacks (It’s Not a Policy,It’s Math)
What if chargebacks weren’t just reduced, but mathematically impossible?
That’s not a sales pitch. It’s how blockchain-based payment rails work at a protocol level. Let me explain.
Traditional payment systems,credit cards, ACH, wire transfers,operate on centralized ledgers controlled by banks and card networks. When a customer disputes a transaction, these intermediaries have unilateral authority to reverse it. The merchant’s consent isn’t required. You wake up to a notification that funds you thought were yours are gone.
Stablecoin payments operate on blockchain infrastructure where transactions achieve deterministic finality in seconds to minutes. Once a payment is cryptographically confirmed and added to the blockchain, it becomes immutable,unchangeable by any party.
There’s no central authority,no bank, no card network,that can unilaterally reverse the payment. This isn’t a business policy that could change. It’s a technical impossibility built into the protocol itself.
Think of traditional payments as checks: the bank can still claw them back for 60-120 days. Stablecoin payments are like handing someone cash,once it changes hands, it’s final. No takebacks. No third-party intermediaries. No chargeback window.
But What About Buyer Protection?
The immediate objection: doesn’t this leave buyers vulnerable to fraud?
No. It shifts power dynamics. Here’s how:
Voluntary refunds still exist,merchants can (and should) return funds for legitimate disputes. The key difference: merchants control when money leaves, not third-party banks acting unilaterally.
Smart contracts enable escrow arrangements and conditional payments. You can structure “payment released upon delivery confirmation” logic directly into the transaction. The buyer and merchant agree to conditions upfront. No bank adjudicates disputes weeks later using opaque processes.
What stablecoins eliminate isn’t refunds,it’s unilateral, merchant-hostile chargebacks where customers weaponize consumer protection to steal products and services.
Not “Crypto”,This Is Tokenized USD for Enterprises
Before you close this tab thinking “my auditors will never approve crypto,” understand what enterprise stablecoins actually are.
USDC (issued by Circle) and USDT (issued by Tether) aren’t speculative assets like Bitcoin. They’re dollar-denominated digital cash backed 1:1 by US cash reserves and Treasury bills, audited monthly by Big Four accounting firms.
You’re not betting on price appreciation or “decentralization.” You’re using tokenized dollars that move on blockchain rails instead of correspondent banking networks.
This isn’t the “wild west” of crypto. It’s federally regulated payment infrastructure with institutional custody, reserve transparency, and compliance standards your auditors recognize.
Beyond Zero Chargebacks: The Compounding Treasury Benefits
Eliminating chargebacks solves your #1 pain point. But stablecoin payment rails deliver compounding benefits across your entire treasury operation:
Speed: Seconds vs. Days
Traditional international wires take 3-5 business days to settle. Stablecoins settle in seconds to minutes, 24/7, including weekends and holidays.
One documented case study: a B2B payments company shifted to stablecoins via TransFi and achieved a 98% reduction in settlement time,from 2-5 days down to under 60 seconds. That’s not efficiency gains. That’s eliminating the concept of “in transit” funds entirely.
Cost: 50-80% Reduction
Traditional payment costs for international wires run 2-4% in fees plus FX markups. Contractor payments often cost $20-50 per wire.
Stablecoin payments? 0.5% or flat fees under $5. The same TransFi case study documented 40% cost savings after adoption.
At scale, this isn’t marginal,it’s transformative. A company processing $10M annually in international payments saves $200K-$400K per year on fees alone.
Liquidity: Instant, Not Frozen
Every wire transfer in progress is working capital you can’t deploy. Money sits in correspondent banking limbo for days,not at the recipient, not in your account, just… gone temporarily.
Stablecoins provide instant liquidity: funds are either in your wallet or theirs, with zero “in transit” state. This reduces working capital requirements and improves cash forecasting accuracy.
Transparency: Immutable Audit Trail
Every stablecoin transaction is recorded on a public blockchain with cryptographic verification. Your auditors can independently verify every payment without requesting documentation from banks. Transactions are immutable, they can’t be altered retroactively.
This creates audit-ready compliance by design. Monthly reports with blockchain-verified transaction IDs integrate directly with ERPs like NetSuite, SAP, and QuickBooks.
Stablecoins processed $14 trillion in transaction volume in 2024,surpassing Visa’s global payment volume.
The Market Is Moving While You Read This
Stablecoin adoption isn’t theoretical. It’s happening at institutional scale:
- $14 trillion processed in 2024, exceeding Visa’s global volume
- 15% of CFOs plan to accept stablecoin payments within two years
- Major payment infrastructure providers,Stripe, PayPal, Shopify,have integrated stablecoin rails
- Deloitte’s 2025 CFO survey found 45% of North American CFOs cite enhanced fraud protection as a primary stablecoin benefit
Implementation timelines are measured in weeks, not quarters. Most enterprise integrations take 2-4 weeks, with basic setups completed in one week.
The Real Risk Isn’t Adopting Stablecoins,It’s Not Evaluating Them
CFOs are trained to assess downside risk. So let’s address it directly.
What if the stablecoin breaks its peg?
Major stablecoins (USDC, USDT) haven’t de-pegged in over three years despite market volatility. Monthly reserve audits and 1:1 backing provide structural stability. And because settlement happens same-day, your exposure window is minimal,you’re not holding stablecoins long-term as an investment.
Will our auditors accept this?
Under emerging accounting standards (MiCAR in the EU, potential US GAAP treatment), dollar-backed stablecoins can be classified as cash equivalents. They’re more transparent than traditional bank accounts,your auditors can verify reserves independently via blockchain explorers and public attestation reports.
Do we need to hire blockchain engineers?
No. Vendors like Torsion handle the technical integration, custody, and compliance infrastructure so your treasury team never touches crypto directly. You work with familiar payment APIs and accounting interfaces. The blockchain complexity is abstracted away.
What about regulatory scrutiny?
The GENIUS Act (July 2025) established federal regulatory clarity. Stablecoin issuers now operate under the same BSA/AML frameworks as traditional financial institutions. This reduces regulatory risk compared to the pre-2025 environment.
A System That Works For You, Not Against You
The traditional payment system treats merchants as revenue sources for dispute management and intermediary fees. You lose chargebacks 92% of the time, pay non-refundable fees regardless of outcome, and absorb 3-5x cost multipliers on every disputed transaction.
That’s not a bug. That’s the business model.
Stablecoin payment rails flip the power dynamic. Transactions finalize in your favor by default. Refunds happen when you choose, not when a bank adjudicates weeks later. Costs drop 50-80%. Settlement happens in seconds, not days. And your working capital isn’t held hostage by correspondent banking networks.
The chargeback problem isn’t unsolvable. You’ve just been using payment infrastructure designed in the 1970s for a digital economy operating in 2025.
The solution exists. It’s federally regulated. It’s processing $14 trillion annually. And 15% of your CFO peers are implementing it within the next 24 months.
The question isn’t whether stablecoins work for enterprise payments,the data is conclusive. The question is whether you’ll adopt them before your competitors do.
Ready to Eliminate Chargebacks From Your P&L?
Torsion handles the technical integration, regulatory compliance, and accounting treatment so your treasury team never touches crypto infrastructure directly. We specialize in bridging the gap between innovative payment rails and enterprise finance requirements,the same way we’ve helped companies implement AI without becoming machine learning experts.
Book a 15-minute consultation to see how stablecoin payment infrastructure could eliminate chargebacks and reduce payment costs by 50-80% for your specific use case. No sales pitch, just a technical assessment of whether this solves your problem.
