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Education

The multiple benefits of Visa

Merchant Purchase Inquiry

Once the dispute becomes a chargeback, it becomes far
more complicated and expensive for all parties involved.
This is why Visa introduced Visa Merchant Purchase
Inquiry (VMPI), which allows issuers to obtain pertinent
information about transactions under dispute before
escalating them.

What is VMPI?
VMPI is a platform that provides a direct connection
between the merchant's transaction records and their
issuing bank. Whenever a customer calls their bank to file
a dispute, they are automatically asked to provide certain
information about the transaction, the product or service
they purchased, and all other relevant details through
Visa Resolution Online (VROL).

With this added information, the issuer can speak
By Suresh Dakshina intelligently to the customer about their purchase, and
Chargeback Gurus the merchants can let the issuer know the transaction
qualifies for a refund, if applicable, before the dispute
very day, ecommerce merchants are getting hit escalates and becomes a costly chargeback. This process
with large numbers of chargebacks, and the allows for greater chargeback prevention.
rate increases every year. Card networks and
E issuing banks are trying to reduce disputes, but VMPI was launched in Hong Kong and New Zealand in
striking the balance between addressing consumer needs 2017. Visa found use of VMPI reduced chargeback rates
and protecting merchants is complicated. Merchants, issu- by 14 percent, leading to them introduce VMPI as a pilot
ers, and acquirers all lose time and money when tackling program in the United States the following year.
a high volume of disputes – and the cost of disputes keeps
going up. As the overseers of the dispute process, what How do you measure the effectiveness of VMPI?
tools are the big card networks providing for merchants The efficacy of VMPI can be measured by determining
to streamline dispute management? how many disputes occurred before the adoption of VMPI,
and how many disputes occurred afterward. To activate
Visa is taking the lead on this, developing programs to VMPI, you can work directly with Visa, but the integration
get to the bottom of disputes and see how to reduce or and onboarding process can be greatly streamlined by
eliminate invalid disputes. Between 15 to 25 percent of working with a VMPI facilitator.
disputes occur because cardholders are not aware of a
purchase that they or family members made, or they A facilitator can offer extensive VMPI analytics that let the
attempt to defraud merchants by telling their banks that merchant know what kind of inquiries are coming in and
they never authorized purchases they're unhappy with. what kind of action is being taken by the issuing bank.
Issuing banks taking these phone calls don't know what The merchant will be notified through VMPI whether the
the truth is, and they often take whatever the cardholders dispute is accepted or rejected.
say at face value.
The advantage is that when have real time warning of a
The issuing bank knows what a given transaction is, dispute before your acquirer notifies you, you can take
but it doesn't know specifically what was purchased, steps to prevent a chargeback from happening, avoid
whether the product or service was delivered, if it was double refunds and be better prepared to deal with
returned, or whether it qualifies for a refund. Since these fraudsters. If merchants sell high-value commodities and
factors are unknown to the issuer, it will take what the receive notice of fraud, they can stop shipments and save
customer claims into account and escalate the dispute to money by issuing refund sand blocking cardholders from
the acquiring bank. making future purchases.

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