What is Visa Merchant Purchase Inquiry (VMPI)?

The Visa Merchant Purchase Inquiry—commonly abbreviated to VMPI—is a new tool available from Visa. The tool fulfills two vital roles: it helps considerably speed up the Visa chargeback process, and also help reduce the number of chargebacks filed against merchants.

We discussed VMPI briefly while covering the Visa Claims Resolution initiative introduced in 2018. Now, we’ll dive into VMPI in more detail to explain its function—and value—for merchants and banks.

How Does VMPI Work?

Visa Merchant Purchase Inquiry is a plugin for the Visa Resolve Online platform. The tool makes it possible for issuing banks and merchants to have automated, real-time communication.

With the traditional chargeback process, whenever a cardholder filed a complaint, it would typically escalate to a chargeback. The merchant would then need to either accept the loss, or try and defend themselves through the representment process. In either case, the merchant would pay a nonrefundable chargeback fee. It could take weeks, or even months, before the dispute is finally settled.

After VMPI implementation, though, many initial transaction inquiries can be answered and resolved in real time. For instance, assume a customer raises a concern about a specific transaction he or she doesn’t recognize. The bank may submit a transaction inquiry through VMPI and instantly recall transaction details like shipping confirmation, cancellation number, or product name, which can be used to help determine validity. At this point, the bank reaches out to the merchant to inform them of the situation, and the merchant may respond in one of two ways:

1. Issuing a credit notice: Upon discovering an instance of legitimate fraud or merchant error, the merchant should submit a credit notice to refund the cardholder. The issue is then resolved, with no need to progress to the chargeback stage.
2. Submitting a transaction inquiry response: If the merchant believes the transaction should be upheld, they may submit a response to provide additional information to the bank. The bank will examine the additional evidence and either close the matter, or progress to the dispute stage.

The goal of implementing VMPI is to intercept and resolve as many issues as possible before they become chargebacks.

What’s the Next Step After Submitting a Response?

The merchant’s next course of action will depend on whether they submitted a credit notice, or additional transaction information to try and save the sale.

If submitting a refund, the merchant should:

1. Refund the customer’s money immediately, and note the refund in their CRM.
2. Cancel order fulfillment if goods have not yet been shipped.
3. Cancel any future rebills scheduled (if applicable).
4. Flag and blacklist the user if friendly fraud is suspected.

If submitting transaction information, the merchant should:

1. Note the VMPI resolution in their CRM.
2. Follow-up on pending action items to ensure resolution.
3. Be prepared to engage in the representment process if the issuer submits a dispute.

Of course, the value of the Visa Merchant Purchase Inquiry tool isn’t limited solely to individual Visa chargeback cases. Over time, use of the VMPI plugin generates a body of transaction and transaction inquiry data. In-depth analysis of this data enables merchants to better understand their broader chargeback situation.

Merchants can examine their inquiry response performance, noting which responses are effective, and which are deemed insufficient for which reasons by issuers. Applying these insights will make it possible to see a long-term reduction in the number of disputes filed by cardholders.

How to Enroll in VMPI

For merchants, it’s clearly in their best interests to enroll in the Visa Merchant Purchase Inquiry program. While optional, every transaction inquiry will automatically progress to a chargeback if not enrolled in VMPI.

The most effective approach is to partner with a VMPI facilitator. This service is typically provided by businesses already operating in the fraud and chargeback mitigation space. For merchants interested in partnering with a VMPI facilitator, we suggest reaching out to your current chargeback management service provider and inquiring about their VMPI functionality.