What is a Chargeback Deposit?
A Chargeback Deposit is a fixed amount of funds temporarily frozen by a bank or card issuer to mitigate potential financial risks that may arise during virtual card transactions.
These risks primarily include:
Merchant deduction failures due to insufficient card balance;
Failure to reserve funds for handling fees, cross-border fees, and authorization fees;
Initiating payments before card top-ups have successfully cleared;
Malicious chargebacks or fraudulent transactions (brushing);
Failure to cancel auto-renewals in a timely manner upon the expiration of subscription services;
Delayed deduction orders still being generated after a card is suspended or canceled.
Chargeback Deposit Rules
1. Fund Attributes and Clearing Mechanism
[Non-Spendable]: The chargeback deposit is not part of the card's available balance and cannot be used for daily consumption or cash withdrawals.
[Risk-Based Card Cancellation & Deduction]: If a card incurs chargeback behaviors (such as merchant deduction failures, subscription renewal failures, or authorized transactions continuing after suspension or cancellation) and the card's available balance is insufficient, the system will automatically execute a forced card cancellation. The chargeback deposit will be directly deducted to offset the relevant arrears and default fees.
2. Refund Mechanism After Card Cancellation
After a card is canceled, the deposit will not be unlocked immediately. Instead, it enters the bank's risk observation period (i.e., the refund cycle). The specific refund rules are as follows:
Basic Refund Cycle: A standard observation period of one month begins from the date of card cancellation.
No New Bills (Smooth Refund): If the card does not generate any new delayed settlement bills or chargeback fees within the one-month observation period, the remaining deposit will automatically unfreeze on the day following the end of the observation period and be refunded to your platform funding account.
New Bills Generated (Cycle Extension): Considering potential settlement delays by overseas merchants, if the card generates new bills or delayed deductions during the observation period, the observation period will be extended for another month from the date the new bill is generated. This extension will continue until a full month passes without any new bills being generated.
Chargeback Deposit Earnings
The chargeback deposit yields a fixed annualized rate of 5%, which will be transferred to your funding account along with the refunded deposit.
Earnings Calculation Formula:Deposit×Fixed Annualized Yield×(Actual Investment Days÷365)
Chargeback Prevention Guidelines
Please refer to the Card Consumption, Chargeback Prevention, and Anti-Freeze/Cancellation Guide.