Say Goodbye to Chargebacks: The Security of Bank-to-Bank Transfers

Published 22 July 2026 · LocalPay Team

Push vs. Pull: Why It Matters

Credit card payments are pull transactions. The merchant pulls funds from the customer's card using stored credentials. This model is inherently vulnerable to disputes because the cardholder can claim they didn't authorise the transaction — triggering a chargeback that drains the merchant's account and adds a AUD $15-$50 penalty fee per incident.

BPAY and PayID are push transactions. The customer actively pushes funds from their banking app to the merchant. This requires real-time authentication within the bank's secure environment — biometric verification, two-factor authentication, or PIN confirmation. Once pushed, the payment cannot be clawed back through a dispute process because the customer authorised it within their own authenticated banking session.

The Chargeback Epidemic

Australian merchants lose an estimated AUD $500+ million annually to chargeback fraud and friendly fraud (where customers falsely dispute legitimate transactions). Beyond the direct financial loss, chargebacks damage your chargeback ratio — and when that ratio exceeds 1% of transactions, card networks can terminate your merchant account entirely.

Bank-to-Bank: The Chargeback-Free Zone

• No friendly fraud: A customer cannot call their bank and falsely dispute a PayID payment. The bank's own authentication records prove the customer initiated and authorised the transfer.
• No chargeback ratio risk: There is no chargeback monitoring program for BPAY or PayID. Your payment access cannot be revoked based on dispute ratios because disputes simply don't exist on these rails.
• Permanent settlement: Once funds settle via domestic rails, they stay settled. No 120-day clawback window, no arbitration process, no retrieval requests. Settlement is final.

For merchants in high-risk or high-ticket industries — travel, events, luxury goods, B2B services — this chargeback immunity is arguably even more valuable than the fee savings.