Chargebacks generally mean the reversal of a payment or request for repayment in a transaction previously settled or remitted. This reversal is usually done by the issuing bank, payment scheme provider or other financial institution. The reasons for a chargeback may include non-authorization of the transaction amount by the cardholder, an error in transaction details, duplicated transaction, non-receipt of goods and services purchased or any number of other reasons.

In 2016, the Central Bank of Nigeria’s (“CBN”) issued Guidelines on the Operations of Electronic Payments Channels in Nigeria (“Guidelines”). The Guidelines provided for chargeback period on failed transactions, and on 29th May 2020, the CBN revised it, informing all stakeholders by its Circular No. PSM/DIR/ CON/ CWO/O7/127 that it had issued revised Guidelines to that effect (the Revised Guidelines”).

According to the Revised Guidelines, reversal of “failed on-us” Automated Teller Machine (ATM) transactions are now instant. This has been changed from the previous timeline of three (3) days. In addition, refunds on failed Point of Sale (POS)/WEB transactions must be made within forty-eight (48) hours as against a previous five (5) day timeline. These revisions became effective on 8th June 2020.

We have provided a table below with details of the key changes to the chargeback period set by the Revised Guidelines.