How a seller can protect himself from chargeback?

Many people who have a business account for trading on the Internet have come across a situation where after a failed purchase (perhaps only in the customer's opinion) the customer wants his money back.

What should the seller do in this case? How should he prepare his business account so that disputes with the user-buyer are resolved without prejudice? And there is a way out - it's using the Visa Merchant Purchase Inquiry, or as it's also called VMPI, to prevent chargebacks. That's what we'll talk about today.

What is VMPI or Visa Merchant Purchase Inquiry?

As you already know, the buyer goes to his bank for a refund in the first place. And it is the VMPI that enables the merchant to prevent a refund and lose reputation in the eyes of the bank. This works in Europe and around the world and is valid for EUR, USD, and many other currencies.

VISA's VMPI is a highly important feature that allows merchants to block chargebacks in the system before they are launched by the consumer. A merchant that has connected with VMPI may give complete online account information, such as Maxpay account, customer, order, and product information, cardholder information, and so on. VMPI helps to eliminate unwanted money refunds and consumer disputes. For example, VMPI notifies a seller who expects to be charged from his https://maxpay.com/ account. Because of the notice, the seller has more time to disclose all relevant information regarding the purchase and thereby avoid a money refund.

Why do problematic transactions turn into chargebacks?

As you should know, customers apply for a refund directly to their bank, and not to the seller. Although often the situation requires contact with the seller.

This is motivated rather by the fact that it is more convenient for the buyer to contact the bank immediately than to resolve a dispute with the seller. As an example, we can consider "friendly fraud", which happens quite often. It is in this case that the buyer cancels the purchase through the bank without notifying the seller. This happens even if the buyer has received the goods. This is a prevalent practice around the world.

In addition, a refund to the buyer always has additional costs in the form of bank fees, which are deducted from your online account and eWallet. Moreover, the more you make refunds, the more likely the risk of getting restrictions from the bank, or even losing your eWallet and online account. Even if that doesn't happen, at the very least both you and your business will look unreliable in the eyes of the bank.

How likely is it that VMPI will prevent chargebacks?

Since VMPI is a fairly new system that was launched in 2017, you shouldn't count on covering absolutely all banks. But also, even if the seller provides comprehensive information about the purchase to the buyer's bank in time, there is no 100% guarantee that it can prevent chargebacks. The bank can give all that information to the buyer, and the buyer can still insist on a refund. So, at this point, VMPI can't yet affect the reduction of chargebacks. Sellers should rely on their strength and trade in such a way that the user can have no reason to charge back.