Pando is like couples therapy for consumers and merchants

By Michael Carney , written on November 19, 2012

From The News Desk

Along the continuum of annoying customer service interactions, dealing with erroneous charges on your credit card statement is somewhere between potty training a puppy and cleaning out gutters -- not life threatening, but to be avoided whenever possible. The scenario is one that banks, credit card companies, and merchants are eager to avoid as well. For all involved the process is unnecessarily time consuming and potentially costly. And yet, no alternate solution has been available. is a free-to-use system that acts as a mediator between consumers and merchants, while attempting to keep from involving the banks and credit card companies. The newly launched service collects basic information from the consumer about the erroneous charges to her account, and then contacts the merchant on her behalf to try to get the money refunded. Only if this process fails does it initiate a traditional chargeback with the bank or card company -- without any further involvement from the consumer.

The basic service of is free to both consumers and merchants. The company is using the mediation service as a customer acquisition tool to identify merchants with “chargeback problems” and to sell them premium services and tools, such as exit surveys, to “reduce their churn rate and make their customers happier,” in the company’s words.

“The goal with is to divert unhappy customers away from the traditional chargeback system and into direct contact with their merchant,” wrote co-founder James Peter in discussion about his company on the Hacker News (HN) messageboard.

The HN thread briefly rose to the No. 2 spot on the messageboard this weekend, earning 44 points and generating 46 comments to date from the crowd of mostly startup entrepreneurs and engineers, demonstrating a lot of interest in this problem. The commenters offered praise for the idea, but quickly zeroed in on the two most obvious challenges facing the startup: obscurity and skepticism.

As far as obscurity goes, consumers know that it’s irritating to have incorrect charges on their bank statements. But many have no idea how to solve them and aren’t fully aware of the traditional chargeback process the company is trying to circumvent. Not an insurmountable problem, but it makes the task more challenging, and will likely require an education component as part of the company’s solution that does not currently exist.

The issue of skepticism may be more difficult to solve. Consumers and merchants are likely to be skeptical of any service interjecting itself into their payments transaction. Sensitive information is exchanged and in many cases, time is of the essence. The idea of adding another “middleman” into the process is unappealing on the surface, unless the value proposition is clearly worthwhile.

Also, as it’s currently presented,’s website does a poor job of explaining its role in the process, what steps are taken, and who gets charged for the service along the way. (To reiterate, the answer is no one.) As a result, many HN commenters quickly jumped to wrong conclusions that the company was either generally “sketchy” -- it may be, but for the sake of argument, let's assume its not -- or that it was charging merchants a mob extortion-style “protection fee” to prevent chargebacks. This, it most certainly is not.

The closest analog service on the market seems to be BillGuard, which offers the consumer (paid) persistent monitoring of her credit card. Peter described as more of an a la carte service to be used only in the event of a chargeback. For many, persistent monitoring is likely overkill, both from a cost and a necessity perspective. On demand resolution service, on the other hand, should find a welcome home in the toolbelt of savvy consumers.

The good news for the startup is that both merchants and consumers want a solution. One sub-thread between merchants on the HN feed clearly articulated the merchant point of view:

“I came here ready to seriously hate on you, but now I love what you are doing. :) ...It's really frustrating [when consumers call the credit card company, before calling us], because we gladly refund money if people aren't happy with our product.”

“I [work in an industry with high chargeback rates] too, and I wish people would realize that we practically trip over ourselves to issue refunds whenever they are requested, because we want to avoid chargebacks at all costs.”

If the goal for consumers is to get their money back, and the goal for merchants is to avoid the formal bank chargeback process, then offers a winning option for both parties. As its founder Peter wrote, “[Our service] is backed by sending unresolved disputes through the banks, but if we get to that stage I consider the chargeback failed on our behalf."