Merchants who are integrated with Visa Merchant Purchase Inquiry (VMPI) can prevent invalid disputes and take meaningful actions to retain customer relationships and to avoid revenue loss. Merchants have two options to integrate with VMPI: go through a VMPI facilitator or integrate directly to Visa.
What is VMPI?
VMPI was started after Visa saw over 2.6 million chargebacks initiated in 2015 because cardholders did not recognize the transactions, which was an increase of over 13% from the prior year. The cost of working disputes, along with the dispute fee, can end up being more expensive than the transaction. So, Visa created a way for merchants and issuers to prevent invalid disputes from occurring.
With the VMPI integration, merchants can provide detailed company, customer, order, and product information to card issuers on-demand. This connects merchants 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.
Why Integrate to VMPI?
Three statistics illustrate the current state of the dispute landscape:
- In 2017, $31 billion was lost to chargeback costs.
- Merchants were saddled with $19 of that $31 billion.
- 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 addresses 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.
VMPI Integration Options
Merchants can opt to connect to VMPI by directly integrating to Visa and do the integration work themselves. But, the lack of development resources, time restraints, or other factors can make the integration process too challenging for merchants to do it themselves.
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. By going through a VMPI facilitator, merchants are able to easily and quickly become integrated without any integration work on the merchants' end.
Chargeback is a Visa approved VMPI facilitator. This means through Real-time Resolution (our VMPI integration solution) Chargeback has already done all the heavy lifting by building the integration to VMPI. To get started, merchants will just need to provide their CAID (Cardholder Acceptance Identification Number) and BIN (Bank Identification Number). After that information is provided, you will be connected to VMPI. By using Chargeback's integration, merchants can start preventing disputes and protecting revenue right away, without any integration effort.
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.
Do More than Just Stop Disputes
There are a couple of types of issue notification that can be received through VMPI. Here are the different kinds of notifications and what actions merchants should take:
Inquiry Notification: An inquiry notification is a request for more information about the transaction. If your company is at or above the dispute rate limits, you can consider proactively refunding inquiries. If proactively refunding, you can change the enhanced descriptor to state, "this transaction will be refunded."
Dispute Initiated Notification: This notification is when the customer disputes a transaction, and the issuer finalizes it. A dispute initiated notification contains the same information you would receive from your payment processor for your merchant account, but will often be received days in advance. These funds will be deducted from an upcoming settlement, and you should take whatever action you normally would when a customer files a dispute.
Until chargebacks can be blocked on previously refunded transactions, do not refund disputes. If the customer's goods or services have not been delivered or can quickly be canceled, notify the customer and let them know their initiation of a dispute resulted in a cancellation of their order/service.
Visa Fraud Notification: Fraud notifications come when a transaction is confirmed as fraudulent by the customer. If you receive this notification, stop accepting this card for payment and reach out to the customer to confirm they wish to maintain their account or relationship with you.
Visa Stop Payment Notification: You will receive this notification when issuers block future transactions by your company for a specific customer account. Customers can ask their issuer to prevent recurring transactions or subscription payments from continuing. This effectively stops your ability to process a payment on that card account. If delivery or access to the goods or services can be canceled, any shipments can be rerouted, or fulfillment can be stopped, you may want to do so immediately.
Exception File Listing Notification: When you receive an exception file, it means at some point the customer's card was used fraudulently. This notification does not say the transaction was fraudulent, but the card has been compromised. If you receive this notification, cancel all upcoming payments and reach out to the customer and ask if they'd like to update their billing information.