Why are there no chargebacks in crypto payments?

Out of all banking procedures, chargeback has got to be the worst one for merchants. Chargebacks are impossible to control, and they can happen without any prior notice. No one likes when their hard-earned money is taken from them, yet chargebacks still continue to exist. This is why chargebacks are common among fraudsters and criminals who reverse their payments by circumventing merchants and contacting banks directly. Yet, thanks to cryptocurrencies, businesses can avoid chargebacks. Basically, crypto transactions and payments are irreversible, which can protect businesses from chargeback fraud. Companies can accept irreversible crypto payments by using NOWPayments’ tools for deploying a crypto payment gateway.

Why no chargebacks in crypto payments

Key points:

  • Crypto transactions are irreversible because they are peer-to-peer.
  • When making crypto payments, customers can ask merchants for a refund directly.
  • NOWPayments helps companies to accept crypto payments safely.

What makes cryptocurrency payments irreversible?

What makes cryptocurrency payments irreversible?

The problem of double-spending had been for a long time the main issue of digital currencies. Essentially, before the launch of Bitcoin, there were numerous types of digital money. Yet, all of them had one flaw in common. It was impossible to prevent people from spending these currencies more than once. For instance, when a person had access to their digital money’s code, they could manipulate it to double or triple their holdings. Blockchain made a real revolution in the sphere of digital money by solving the problem of double-spending. Yet, the result of the Bitcoin solution was the irreversibility of the cryptocurrency’s transactions. The irreversibility became a staple of all cryptocurrencies, and now it is regarded as one of the strongest features of such digital assets.

The exact tool which makes crypto transactions irreversible and prevents users from engaging in double-spending is the utility consensus mechanism. Such a mechanism ensures that each transaction taking place on the network is verified simultaneously, thus removing the possibility of double-spending. For instance, Bitcoin’s consensus model is called proof-of-work. In the case of the PoW consensus, each transaction submitted to the networks gets validated and added to a block by miners. Once the transaction gets confirmed, it becomes irreversible and cannot be recovered by the sender.

How do you make a refund in crypto payments?

How do you make a refund in crypto payments?

The irreversibility of crypto transactions makes them impossible to recover without the approval of the recipient. Basically, when merchants receive crypto payments, they become full owners of the newly received funds. Moreover, no one on the network possesses the capacity to take away their crypto funds from them. This means that blockchains do not have any authorities that can order transactions to be canceled and reversed. This is what makes crypto transactions different from bank transfers. In the case of the latter, banks can simply reverse any transaction, and this is often abused by various criminals.

Yet, despite the fact that there is no actual way to make a chargeback happen on the blockchain, there is an alternative way to do it. There can be a million reasons why people may need a refund, for instance, they may order clothes in the wrong size from an online store. So, to make a refund, the only way for them to get their crypto back is by contacting the merchant directly. Although a risk exists that the merchant will refuse to return the money, it is likely that companies which value their reputation will gladly agree to transfer the funds they received to their customer’s address.

Types of Attacks against irreversibility of transactions

There are several types of attacks that seek to impose double spending in a blockchain environment and disrupt the irreversibility of crypto transactions.

Race attacks

Race attacks involve an actual race between two transactions which are posted on the network at the same time. The basic concept behind race attacks is to replace the prior transaction with the second one and thus return the initial funds to the wallet controlled by the sender before the first transaction gets written on the blockchain. The first transaction can be overridden if the second one has a higher fee which will make it become prioritized by the network. At the same time, race attacks are possible only if the recipient accepts unconfirmed transactions. Those merchants that use NOWPayments to accept crypto payments can be certain that they will not become victims of a race attack because NOWPayments thoroughly checks every transaction that it processes for its clients.

51% attacks

51% attacks

The 51% attack is the one that raises the most concerns in the crypto community. When a certain group of miners can control 51% or more of the hashing power of a given blockchain, they gain the ability to reorganize the network. As a result, the group can execute double-spending and reverse transactions. Nevertheless, the probability of such an attack is extremely low for the majority of blockchains since it would cost massive amounts of money.

What advantages for merchants does an irreversible payment have?

Freedom from fraud

Freedom from fraud

The biggest advantage of irreversible crypto payments for merchants is the absence of chargeback fraud. As mentioned above, chargebacks often give headaches to business owners worldwide. Chargeback fraud is extremely annoying and demoralizing. This is why crypto payments can serve as a perfect solution to the problem of chargeback fraud. Basically, by embracing crypto payments, businesses can gain more control over their financial activities. Moreover, irreversible payments mean that all money received by the business belongs only to it and cannot be taken away from it at any moment and a crypto chargeback is impossible.



Irreversible payments are possible since there is no authority that controls all blockchain transactions. As a result, all crypto transactions are fully peer-to-peer, meaning that they involve only two parties, the sender and the recipient. So, no third party can learn any personal information about these parties since they can stay completely anonymous. Businesses can safely deploy irreversible crypto payments as a way to offer their clients a more private way of making payments.



The lack of control on the blockchain, which ultimately makes crypto transactions irreversible, also positively affects the efficiency of crypto payments. Essentially, all mainstream blockchains can process their users’ transactions in a matter of minutes and even seconds. This is amazing news for businesses that always seek to facilitate their payment process. The faster speed and improved efficiency of cryptocurrency payments, compared to the institutional payment services, make crypto payments perfect for businesses that have many foreign clients. International bank transfers are notorious for their delays and slow processing, which may take days. This is why many merchants choose crypto payments instead.

Customer protection

When accepting crypto payments, businesses need to think of ways to protect their clients in the case when a need for a refund arises. For instance, it is important for merchants to state that the option of a refund exists in the first place. Additionally, they can create clear guidelines on how to request a refund of their crypto funds. That way, consumers will have an understanding that they are protected in the case when the product they receive is of poor quality, or simply they no longer wish to buy it.

How to accept crypto payments

How to accept crypto payments

As mentioned above, NOWPayments is a service that facilitates the payment process for both consumers and businesses.

For instance, eCommerce stores can utilize special plugins compatible with PrestaShop, WooCommerce, Magento 2, WHMCS, OpenCart, Zen Cart, Shopify, and Shopware. Plugins automate all payments and enable companies to get crypto payments.

Brick-and-mortar stores and other companies can issue crypto invoices or utilize a virtual Point-of-Sale terminal. Such tools enable merchants to manage all their crypto payments. They also can deploy subscription-based crypto payments.

NOWPayments is a non-custodial service which means that it conducts instant payouts to its partners. NOWPayments charges clients only for transactions it processes. The fee for one transaction starts from 0.4%.


  1. Why cryptocurrency transactions are irreversible?

    Cryptocurrency transactions are irreversible because there are no intermediaries among the two parties on the blockchain, therefore, once a transaction is verified on the network, it cannot be reversed.

  2. Can I do a chargeback on a bitcoin purchase?

    Users cannot request an automatic chargeback on their Bitcoin purchase. Yet, they can contact the seller to claim their money back. Similarly, a direct Bitcoin chargeback is also impossible.

  3. Is it possible to do a refund in crypto payments?

    Crypto payments can be refunded only after contacting the merchant directly.

  4. What is a chargeback?

    Chargeback is the process of reversing a payment and returning the full sum to the debit or credit card of the client.


Crypto transactions are irreversible, which makes them particularly beneficial for businesses. NOWPayments helps businesses to accept crypto payments.