Visa Claims Resolution Fees and Explanations

The system has some pros and cons, and VCR may result in some new fees if you incur a chargeback. Back in late 2018 or early 2019, you may have seen a notice on your processing statement about upcoming VCR charges.

For example, some businesses saw this explanation:

Visa recently announced they are delaying the time-based dispute response and acceptance fees associated with Visa Claims Resolution (VCR). Where applicable, these fees will now go into effect on October 1, 2018 and will appear on your October billing statement received in early November.

In this article, we’ll explore what VCR is, and how much it will cost you.

Looking for more general information on chargebacks? Check out our article what happens when you get a chargeback.

What is Visa Claims Resolution?

Visa Claims Resolution (VCR) is the name of Visa’s chargeback management system. VCR includes Visa Response Online (VROL), an online dashboard to manage chargebacks, which works with the Visa Merchant Purchase Inquiry (VMPI) tool. The card brand offers a manual about VCR.

Visa introduced VCR with a goal to help cut down on the number of ‘avoidable’ chargebacks businesses receive and to speed up the dispute time for unavoidable chargebacks. The dispute window was shortened (going from 45 days to 30 for businesses to respond to chargebacks) and reason codes were consolidated. Additionally, businesses are now only allowed to dispute certain chargebacks if they have compelling evidence.

Acquirers (processors) and issuers (banks) use the VCR system. You as a business won’t access it directly. However, to fully utilize the system, you may need to integrate your website or CRM. For example, the VMPI tool will need access to that information in order to cut down on chargebacks from purchases a customer doesn’t recognize.

You may see VCR fees on your statement if you receive Visa chargebacks. Some of these fees are set by Visa, while others come from your processor. We’ll discuss this in more detail in the section on VCR fees later in this article.

Visa Response Online (VROL)

Visa Response Online (VROL) is Visa’s official system for accepting information about chargebacks. Processors and banks both use this system to communicate about disputes. In fact, Visa requires that they use it for responding to retrieval requests, providing supporting documents for chargeback rebuttals, and appealing initial chargeback results. Everything that has to do with a chargeback goes through VROL.

That includes the Visa Merchant Purchase Inquiry tool designed to help cut down on avoidable chargebacks.

Visa Merchant Purchase Inquiry (VMPI)

A key component of the dispute system, Visa Merchant Purchase Inquiry (VMPI) is designed to help stop chargebacks before they get to that point. Known as retrieval requests, this pre-chargeback phase is when a cardholder initiates a dispute and the bank seeks more information before proceeding with a formal chargeback. In some cases, a cardholder simply doesn’t recognize the charge on their statement, and information received through the retrieval request jogs their memory. In other cases, the cardholder may wish to proceed with a chargeback.

The VMPI system applies to card-not-present transactions.

VMPI is optional, but Visa highly recommends it. However, not using it doesn’t waive a business’ right to fight chargebacks.

VMPI for Retrieval Requests

With VMPI, a cardholder that wants to dispute a transaction contacts their bank, which initiates a transaction inquiry through the Visa Response Online (VROL) system. From there, the system looks for relevant information about the transaction and provides that information to the customer’s bank.

First Data’s website illustrates how banks use VMPI to help cut down on chargebacks from unrecognized purchases. (Red numbers added for clarity.)

Since the business in this example participates in VMPI, the bank’s customer service representative was able to provide more details about the transaction to the customer while they were on the phone, leading to the customer recognizing the charge and not proceeding with a chargeback.

The system can look for previous disputes (indicating a habitual chargeback-filer) as well as information about the business in case it’s a simple scenario where the cardholder didn’t recognize the business name on their credit card statement. The VMPI system checks multiple data fields, so it will need access to your CRM or gateway. These checks happen in real-time, with Visa requiring a 2-second or less response time from your systems.

You’ll need to enroll in the program in order to take advantage of VMPI. Participation is voluntary, but if you’re not enrolled, you won’t have the option of responding to the initial dispute requests and heading it off early. Instead, the disputes will proceed along the normal chargeback path.

Integrating with VMPI

If you choose to participate in VMPI, you can set up a direct integration with Visa or go through a VMPI facilitator such as a processor or chargeback management company. Integrating yourself entails filling out a questionnaire, providing business details, acquirer details, and proving your systems are capable of responding in 2 seconds or less to Visa inquiries. If you don’t have the time or expertise to conduct an in-depth custom integration but wish to use VMPI, you’ll want to look into facilitators.

Visa Claims Resolution Fees

There’s good news and bad news here. The good news is that VCR fees (should) only apply if you receive a chargeback.

The bad news is that it’s difficult to know how much the fees will actually be and which come from Visa vs. from your processor. We requested a fee schedule from Visa, but the company has not yet provided one. Publicly available fee schedules and schedules we’ve obtained from processors show different fees.

We’ll maintain a list of the fees that we do have access to, but be aware that these costs can change. Before we get to that, let’s go over what we were able to confirm with Visa.

According to Visa

What Visa confirmed to CardFellow is that it charges processors a subscription fee for participation in VROL and fees for ongoing activity, such as submitting or responding to disputes.

That means that Visa does charge processors fees for using the VCR system, so a processor claiming that VCR fees come from Visa can be accurate. However, I say “can” be accurate because there’s currently no easy way to confirm if the processor is passing the Visa fee to you at cost, or if they’re padding it.

In the past, processors have been sued for padding Visa assessments while claiming it was a fee that Visa charged. Since Visa does not publish the fees they charge to processors, it’s possible for that kind of padding to happen on VCR fees as well.

It’s also worth noting that a FAQ page on Visa’s website specifies that merchants will be required to respond to all chargebacks by either accepting it as a valid chargeback, or declining it in order to fight the chargeback. The longer it takes to reply to the dispute notification, the more it will cost you no matter what you reply.

Here’s what we know about VCR fees that processors charge. These fees are subject to change.

First Data (now Fiserv) VCR Fees

First Data will pass on some VCR fees. From the information we’ve obtained so far, the fees will apply to documentation submitted by fax or email. As you can see from the explanations, these types of fees can be avoided if you provide information electronically instead.