Visa VMPI: Facts vs. Fiction | Scott Adams, FraudPVP

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October 01, 2019

A few years ago, if you were in the card-not-present payments and fraud industry, one of the most hyped new products on the horizon was Visa Merchant Purchase Inquiry (VMPI) by Visa. VMPI gave merchants a way to communicate with customers to prevent chargebacks. Everyone was excited about it at first, but then, soon enough it was forgotten.

What some people do not realize is that VMPI was not canceled, and the rumors that it did not test well or did not work were not true. In fact, it tested very well, but it was met with some operational challenges which made it slow to gain traction. Like many products that start with hurdles, VMPI came out of the gate with some misconceptions that led to misunderstandings about the service.

It is time to set the record straight on the truth about VMPI.

First, let's answer the big question: what is Visa VMPI? Visa Merchant Purchase Inquiry is a service created by Visa to help combat friendly fraud and cut down the number of unauthorized transaction claims that could be solved through communication between merchant and consumer. VMPI is an API that lets the issuer request more information about a transaction from the merchant in real time. For example, if a consumer calls their "credit card company" (a.k.a. their issuer), the representative can press a button to view whatever information the merchant wants to share with the consumer about the transaction in question. This, in many cases, prevents the chargeback before it is even filed and therefore does not count against the merchant's chargeback rate. The merchant often keeps their money, saves the sale, and retains a happy customer.

So now that we know what VMPI is, let's explore some myths about how VMPI works, as well as the realities about this service.

FICTION: VMPI is not live, or it was cancelled.

FACT: VMPI had a slow start due to Visa changing the delivery model, but it is very much alive and doing well. More and more merchants are signing on every day, and issuers around the world are using it.

FICTION: VMPI is used by only a few issuers.

FACT: VMPI is live in all Visa issuers. It is actively used to prevent unauthorized claims and other friendly fraud by top issuers in the US like Wells Fargo, Bank of America, Chase, and Citibank, and by top issuers internationally like BBVA, SBI, ANZ, HSBC Mexico, Banco do Brasil, Banco Santander, and many more. We often run analyses on prospective merchants' chargebacks and find that the issuers processing the disputes are active with VMPI in 70% to 95% of their chargebacks.

FICTION: VMPI can be used only by large merchants.

FACT: This one is based on a small kernel of truth. Originally, VMPI was to be a direct Visa-to-merchant service and Visa had limited staff for this, which limited the availability of the service to larger merchants. But now, Visa has adjusted the delivery model and is allowing Merchant Facilitators, such as FraudPVP, to onboard merchants and provide VMPI services. This allows all sizes of merchants to participate, which is better for the entire payments and fraud ecosystem.

FICTION: VMPI does not work.

FACT: VMPI works very well. This myth probably arose because VMPI's success depends on how it is implemented and what the merchant situation is. VMPI works great if used as Visa designed it, which means always replying to inquiries with detailed transaction information. VMPI also works best when the merchant's fraud is mostly friendly fraud or fraud from transactions that the consumer does not recognize or forgot about. In our merchant base, we are preventing 30% to 80% of customer inquiries from turning in to chargebacks. I would say that is an incredible success.

FICTION: VMPI is really difficult to integrate.

FACT: Difficulty depends on the method you choose. The direct-with-Visa integration is not an easy one, but now that Visa allows Merchant Facilitators to work with merchants, the difficulty is lessened.

FICTION: VMPI only prevents chargeback claims for "unauthorized" reason codes.

FACT: This is one of the main types of chargebacks prevented, but VMPI can also respond to inquiries with "Previously Refunded" in those cases where the merchant refunds the charge before the inquiry comes in. Often, if a merchant processes a refund, it takes days to get to the issuer's call center, so the customer does not necessarily know it is coming (or does not want to wait), leading to the customer seeking a chargeback. With VMPI, Merchant Facilitators can share the "inflight refund" information earlier with the issuer, and when they can see the refund is coming, the issuers often will not do a chargeback. Thus, VMPI can combat these types of disputes, as well.

FICTION: VMPI is only useful if the merchant is in a chargeback or fraud monitoring program.

FACT: FACT: Visa VMPI is useful for any merchant because it prevents unneeded disputes and allows the merchant to receive valuable data in the timeliest manner. One little-known fact about VMPI is that the merchant can get real time fraud, chargeback, cancel-recurring, and exception notifications. The moment the issuer submits the transaction update, Visa is notified and VMPI sends out the data to merchants who participate. This data is invaluable because it can stop shipments faster, de-authorize digital content, prevent additional charges, and take many other fraud and money-saving actions quicker than waiting to receive the information from your acquirer (or never receiving it at all).

VMPI can also help merchants track chargeback rates and fraud rates in real time without waiting until the first of the month to see if they are on a monitoring program or not. With VMPI, knowledge truly is power. There really is no drawback to any merchant using this service.

Scott Adams -- FraudPVPI hope that this post rectifies misunderstandings many merchants have about VMPI. I have been working with this product for more than a year now and look forward to watching it evolve as more merchants receive access. Please feel free to contact me with any questions or comments.

Scott Adams is the CEO of FraudPVP. FraudPVP's live Visa Merchant Purchase Inquiry (VMPI) service helps merchants of all sizes prevents chargebacks before they happen with little to no tech or integration required. The system goes live in days, not weeks, and leads to a high rate of inquiry deflections and saved sales (50%+ of inquiries are deflected with FraudPVP's VMPI service, and 25%+ of sales are saved). To learn more about FraudPVP's VMPI service and the other ways that FraudPVP can help reduce fraud and maximize ROI, please visit: https://fraudpvp.com/