Payment dispute frameworks were built for a simpler world. Decades of change in how people buy, sell, and pay have left those frameworks struggling to keep up — and every participant in the ecosystem is absorbing the consequences.
Payment disputes and chargebacks were not designed for the world they now operate in. When the frameworks underpinning them were established, a card payment meant one thing: a consumer purchasing a physical good from a merchant at a point of sale. The dispute process that sat alongside it was built accordingly — methodical, document-based, and designed for occasional use by a back-office team with time to assess each case on its merits.
That picture bears little resemblance to how commerce works today. Cards are used to pay rent, settle instalment loans, book trades, pay school tuition, subscribe to digital services, and transact across marketplaces where the relationship between buyer and seller is mediated by multiple platforms and intermediaries. New use cases are emerging daily. Each of these contexts brings its own legal frameworks, its own consumer expectations, and its own complications — none of which were contemplated when the dispute rules were written.
A framework stretched across unfamiliar territory
The challenge is not that dispute processes are broken. For the use cases they were designed for — a consumer disputing a goods purchase, a fraudulent transaction on a lost card — the underlying logic still holds (apart from where the consumer is pretending a transaction was unauthorised). The challenge is that the same rules are now being applied to an enormous range of scenarios they were never built to handle, with little guidance on where they apply cleanly and where they don't. Simply sending a chargeback "just in case" to the merchant to resolve, creates enormous strain on businesses and compressing margins.
Consider a consumer disputing an airfare because a dietary preference wasn't accommodated, or contesting a professional service because the outcome didn't meet their expectations, or challenging a payment made through an intermediary platform where accountability is genuinely ambiguous, or paying online or in-app for a meal at the table. These cases land in a dispute process designed for simpler fact patterns, assessed by bank staff applying rules that offer limited guidance, with outcomes that can vary significantly depending on who is reviewing the case.
The same rules are now applied to an enormous range of scenarios they were never built to handle — with little guidance on where they apply cleanly and where they don't.
Australian Consumer Law, Fair Trading obligations, and tribunal processes exist alongside the card dispute framework, intersecting with it in ways that are rarely clearly defined. A consumer who has a legitimate avenue of redress through one channel may also have access to the card dispute process — and may pursue both simultaneously or choose whichever appears more convenient and may have unintended consequences for a consumer.
Complexity that will only grow
The trajectory of commerce suggests this complexity is going to deepen, not resolve. Agentic commerce — where purchases are initiated and executed by AI systems acting on a consumer's behalf — is emerging as a new frontier. The liability frameworks governing those transactions still point to merchants, even where a purchase was prompted, interpreted, or completed by a third party. BNPL allows consumers to pay in instalments across various payment methods, including cards — but that doesn't mean the instalment should be disputed like a standard card transaction. Marketplace models have separated the entity accepting payment from the entity delivering goods or services. Each of these developments creates new edge cases for a dispute framework that already has more edge cases than it can comfortably manage.
None of this is an argument against consumer protections — quite the opposite. Accessible and well-functioning dispute processes matter. They were the mechanism through which cardholders recovered funds in the liquidations of Bonza and Bluesfest. They are a channel through which financial institutions can detect patterns of fraud and protect consumers from harm. Their value depends on them working well — which requires that the rules governing them reflect the reality of how commerce actually operates.
Why switching payment rails isn't the answer
There is a view, sometimes heard in industry circles, that the migration from card payments toward account-to-account rails — PayID and PayTo in the Australian context — will eventually make this problem smaller. It won't. Consumer expectations don't change with the payment method. Australian Consumer Law applies regardless of how a transaction was settled. And the experience globally of rolling out account-to-account payments at scale has consistently surfaced the same dynamic: consumers expect protections, and where those protections are absent or unclear, uptake stalls and trust erodes. The dispute problem is not a card problem. It is a commerce problem.
Why clarity matters for everyone
When the rules don't clearly define what a dispute process is for — and what it is not for — every participant ends up absorbing the ambiguity in different ways. Banks make judgement calls. Merchants contest outcomes they can't reliably predict. The costs of that ambiguity are real, even if they are rarely attributed to it directly.
The Payment Disputes Institute was established because this gap deserves serious and sustained attention. Not from the perspective of any single participant, but from a view of the ecosystem as a whole — examining how the rules are applied in practice, where they fall short, and what better might look like. Over the coming months we will be publishing research and analysis across specific scenarios, operational realities, and the policy questions that arise from them.
This is the first of those pieces.