They all operate under the guidelines of RBI, NPCI and payment gateways.
The problem arises because small startup companies don’t have crores of rupees to put into their own servers, BBPS pre-funding amounts, etc.
Even if they do have funds, they have to keep some money as a backup.
Transactions are settled after 2–3 days, and because of that, refunds are also delayed.
The biggest problem occurs when these companies initiate a refund — sometimes the payment has already been settled by the payment gateway, and sometimes there’s a delay in the refund process from the payment gateway itself.
By that time, customers often initiate chargebacks, and then banks and card networks put the funds on hold.
Even if your refund has already been received by the bank and is about to be credited in 1–2 days, if you initiate a chargeback in between, the bank puts the amount on hold again.
That’s why chargebacks should always be done at least 2 weeks later — I mean, at least for cases where you know it's not a fraud, you should wait 2 weeks before applying for a chargeback.
