Chargeback ratio exposure exists because card network rules create a mechanism through which any confirmed card transaction can be reversed unilaterally by the customer's issuing bank. The merchant cannot prevent this reversal once the dispute is filed and the bank accepts it. The merchant can challenge the reversal through representment, but the challenge succeeds only in a subset of cases, and the chargeback fee is charged regardless of the outcome. The accumulated ratio of these reversals to total transactions is what triggers monitoring program enrollment and eventual account termination for high chargeback merchants.
Blockchain transactions do not have this reversal mechanism. A confirmed cryptocurrency payment is settled on the network according to cryptographic rules that cannot be overridden by a bank's dispute resolution process. The customer who wants to reverse a confirmed blockchain transaction cannot do so through any bank or card network channel. The merchant's confirmed cryptocurrency transaction volume therefore does not generate chargebacks in any form, and the chargeback ratio that conventional processors track does not include blockchain transactions. A high chargeback merchant that processes through 27 Blockchain's cryptocurrency payment gateway is building a transaction record that does not feed the chargeback monitoring system at all, which is a different outcome from one that feeds the system at a lower rate.
