How Stripe and PayPal Handle Chargebacks for African Freelancers

 

Freelancing internationally comes with a unique set of challenges, and one of the most stressful is chargebacks. These occur when a client disputes a payment and asks their bank or payment platform to reverse it. For African freelancers, chargebacks can be confusing and financially impactful, especially when using platforms like Stripe and PayPal.

Understanding how chargebacks work, how they are processed, and what you can do to protect yourself is essential for running a smooth freelance business. In this article, we’ll explore:

• What a chargeback is

• How Stripe and PayPal handle them

• The implications for African freelancers

• Strategies to minimize risk and protect your income

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What is a Chargeback?

A chargeback happens when a client disputes a transaction. Common reasons include:

• The client claims they didn’t authorize the payment

• The client claims the service wasn’t delivered or was unsatisfactory

• Fraudulent activity on the client’s card or account

When a chargeback is initiated, the payment processor (Stripe, PayPal, etc.) temporarily withdraws the disputed amount from your account until the dispute is resolved.

For African freelancers, this can be particularly challenging because:

• Accessing funds may already be slower due to cross-border issues

• Platforms often hold funds in reserve during dispute resolution

• You may have limited ability to present evidence in your local context

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Chargebacks on PayPal

PayPal is one of the most common platforms for African freelancers, and it has a well-defined but strict chargeback policy:

How it works

1. The client disputes the transaction with their bank or PayPal.

2. PayPal temporarily withdraws the payment from your account.

3. You receive a notification and can provide evidence to defend your case.

4. PayPal investigates and decides whether to return the money to the client or reinstate it to your account.

What counts as valid evidence

• Signed contracts or agreements

• Emails and chat messages showing communication

• Delivery receipts, work samples, or project files

• Screenshots of project progress or milestones

Implications for African freelancers

• PayPal may charge a chargeback fee, which can range from $20 to $30 per dispute.

• Your account may be flagged for high-risk activity if multiple disputes occur.

• International chargebacks may take weeks to resolve, affecting cash flow.

Tips for minimizing chargebacks on PayPal

• Maintain clear contracts and communication with clients

• Deliver work in verifiable formats

• Use invoices with payment references

• Respond quickly to PayPal requests for evidence

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Chargebacks on Stripe

Stripe is another popular platform for freelancers who accept credit card payments. Its process is slightly different:

How it works

1. A client disputes a payment through their card issuer.

2. Stripe temporarily deducts the payment from your account.

3. Stripe notifies you and allows you to submit evidence to fight the chargeback.

4. Stripe reviews the evidence and communicates with the card issuer.

5. The final decision determines whether the funds return to your account or stay with the client.

What counts as valid evidence

• Signed agreements or terms of service

• Delivery confirmations (e.g., download receipts, tracking numbers)

• Proof of communication and approvals

• Product or service records

Implications for African freelancers

• Stripe charges a dispute fee (around $15 or $20), which may not be refunded even if you win.

• Multiple chargebacks can increase fees or risk account termination.

• Dispute resolution can take 30–90 days, delaying access to funds.

Tips for minimizing chargebacks on Stripe

• Clearly define services and deliverables in contracts

• Track project progress with time-stamped records

• Confirm client satisfaction before requesting payment

• Keep receipts, logs, and any relevant correspondence

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Challenges Specific to African Freelancers

African freelancers face unique challenges with chargebacks:

1. Limited banking access

• Some African banks take longer to process refunds or communicate with international platforms.

2. Currency conversion

• Chargebacks in USD, EUR, or GBP may involve additional fees when converting back to local currency.

3. Communication delays

• Time zone differences can delay submission of evidence to the platform.

4. Documentation hurdles

• Some African freelancers may not have formal contracts or invoices, which platforms require to dispute chargebacks.

5. Platform restrictions

• Accounts with repeated chargebacks may face restrictions, especially if local regulatory requirements are stricter or less familiar to the platform.

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Best Practices to Avoid Chargebacks

While you cannot completely prevent disputes, these strategies can minimize risks and protect your earnings:

1. Maintain clear contracts

• Outline scope of work, payment terms, deliverables, and refund policies.

• Signed agreements help defend against chargebacks.

2. Communicate regularly

• Keep clients updated on progress.

• Get approvals at each milestone to show that work meets expectations.

3. Use verifiable delivery methods

• Deliver digital work through platforms that log downloads.

• Use emails or cloud services that timestamp deliveries.

4. Invoice professionally

• Include payment references, clear descriptions of services, and total amounts.

5. Respond promptly

• Platforms like PayPal and Stripe often set strict deadlines for dispute responses. Timely evidence submission increases your chances of winning.

6. Consider partial payments or escrow

• For larger projects, request partial upfront payments or use an escrow service to secure funds before starting work.

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Handling a Chargeback if It Happens

Even with precautions, chargebacks can occur. Here’s how to handle them:

1. Stay calm – Avoid panic or arguing with the client directly.

2. Gather evidence – Contracts, messages, delivery receipts, and approvals.

3. Submit to the platform – Use PayPal or Stripe’s resolution center.

4. Track the process – Chargebacks can take weeks, so monitor updates.

5. Adjust policies if needed – If a dispute reveals a gap in your terms or delivery process, fix it for future projects.

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Conclusion

Chargebacks are a reality of international freelancing, but understanding how PayPal and Stripe handle them equips African freelancers to protect their income and respond effectively. Key points include:

• Chargebacks temporarily remove funds from your account.

• Both platforms allow evidence submission to dispute claims.

• Fees, delays, and platform risks can reduce cash flow.

• Preventive measures like clear contracts, milestone approvals, and professional invoices minimize disputes.

• Being proactive and organized strengthens your ability to win disputes and maintain client trust.

By following these practices, African freelancers can navigate chargebacks confidently, safeguard their earnings, and maintain smooth financial operations.

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