Many merchants are already taking steps to prevent invalid disputes by using Visa Merchant Purchase Inquiry (VMPI). In this post, we’ll go over what you need to know about VMPI and how you can get integrated.
What is VMPI?
Visa started developing VMPI after "[They] saw over 2.6 million chargebacks initiated [in 2015] because cardholders did not recognize the transactions, an increase of over 13% from the prior year. In addition, 20% of all chargebacks were tied to purchases of digital goods, which includes electronic downloads of movies, music, and phone application purchases. As the number of transactions related to digital goods continues to increase, so does the potential for an increased number of disputes. And this can be expensive, as the cost of working a dispute can be far greater than the purchase itself. Merchants and issuers need a more proactive way to prevent a dispute from occurring if a cardholder does not recognize the transaction. While digital goods merchants are certainly important due to the volume, use cases exist for ALL merchants looking to reduce dispute volume, including brick and mortar merchants, travel and entertainment, and online merchants."
With the VMPI integration, merchants can provide detailed company, customer, order, and product information to card issuers on-demand. This connects you to millions of cardholders working with thousands of different financial institutions. Ultimately, VMPI empowers representatives at your customer's financial institution to stop invalid disputes from being filed against you.
How Does VMPI Work?
First, the cardholder contacts their issuing bank about a specific suspicious transaction. Then, the issuer locates and confirms the purchase in question. At this point, transactions from merchants enrolled in VMPI offer agents and customers the opportunity to view additional details. Through the VMPI integration, a response is generated that contains merchant, product, and line-item details within seconds.
The response details are rendered in the issuer's system so both customer service representatives and customers themselves can quickly review and discuss. The customer service representative at the issuing bank can use transaction details to decide if the dispute is invalid and prevent it from being filed. In cases of friendly fraud, the additional data helps jog the cardholder's memory about the purchase. And in cases where the cardholder is trying to intentionally misuse their chargeback rights, the extra layer of confirmation acts as a critical deterrent from proceeding with the dispute.
How to Integrate to VMPI
Here is what merchants need to know about integrating to VMPI:
Can all Merchants Integrate?
When VMPI was initially released, it was only possible for merchants to connect directly through Visa. This caused problems because there were limited staff and availability, which narrowed VMPI's scope to only large merchants. Because of this issue, Visa introduced VMPI facilitators that allow all sized merchants to be able to connect to VMPI.
DIY vs. VMPI Facilitators
By going through a VMPI facilitator, merchants are able to easily and quickly become integrated without any integration work on the merchants’ end.
The other option for merchants is to integrate directly with Visa and do the integration work themselves. But a lack of development resources, time restraints, or other factors can make the integration process too challenging for merchants to do it themselves.
VMPI Integration Requirements
VMPI requires 141 data points to be communicated in a two second period. These data points that need to be collected and can come from a variety of platforms. Merchants that want to facilitate this process themselves will need to connect their platforms to VMPI. Visa will then perform testing to make sure the merchant's connections meet the two-second standard.
If a merchant connects through a VMPI facilitator, it can be as easy as providing your CAID and BIN.
Why Integrate to VMPI?
Three statistics illustrate the current state of the dispute landscape. The first is that in 2017, $31 billion was lost to chargeback costs. The second that merchants were saddled with $19 of that $31 billion. Lastly, in 76% of cases of suspected fraud, customers bypass the merchant and go directly to their card issuer, which leaves merchants with little opportunity to intervene. VMPI address this situation by improving the dispute process for merchants through real-time communication.
When connecting to VMPI, merchants will receive issuer notifications. Issuer notifications (through VMPI) allow merchants to receive a request for more information, as well as notifications when a transaction has been reported as fraud, disputes are finalized, and when the cards have been blocked from further purchases with a stop payment request. These notifications allow the merchant to resolve a problem or refund a transaction and take other preventative steps.
For a full explanation of how the Real-time Resolution (RTR) integration with VMPI works, check out this on-demand demo:
If you are interested in learning more about the benefits of VMPI or how to get set up with a VMPI facilitator, you can click here. Chargeback is a VMPI facilitator that can connect merchant to VMPI with no hassle on their end. By using Chargeback's integration, merchants can start preventing disputes and protecting revenue right away, without any integration effort.