How does a card work ?

Lets take an example of face to face Transaction:-

A transaction is called as face to face when the customer with the card or only the card (can happen when card holder gave the card to his/her friend or family members or the card was stolen or lost and fraudsters found it) was physically present at retailer outlet

When a customer goes to a retailer’s outlet or any shop and purchases something using the Credit Card or Debit Card, usually the retailer swipes the card in his electronic swipe machine. The swipe machine reads the information on the magnetic stripe and transmits it to the bank of the retailer. The bank of the retailer in turn, verifies it with the bank of the customer. When the customer's bank accepts the transaction, the swipe machine gives out two slips of which one will be retained by the retailer after customer signs on it and the other receipt will be handed over to the customer. Though it looks like lengthy process, everything is done electronically and it will be completed within seconds.

What is a Chargeback?

Chargeback in simple words can be explained as a process of claiming back the money from the retailer. This process is initiated by customer's bank.